Monday, August 9, 2021

Strong Governance Practices

Sound governance is to improve management effectiveness, eliminate risks and harness people centricity.

Good corporate governance enables a good decision-making system and a good controlling system to assure the corporation’s operation under the correct directions and behaviors correctly. The more complex contemporary organizations across the vertical sectors become, the broader scope of corporate governance turns out to be. 

Compared to traditional governance approaches which focus on compliance; running a high performance organization needs to ensure that innovation can be catalyzed under the proper governance disciplines, the business growth cycle and balance cycle can be enhanced via the best and next GRC practices.

Harness connectivity: If “command & control” management complemented with traditional governance encourages silos, compliance, and process-driven operation. The solid governance disciplines are not for encouraging silos or stifling business speed. To reinvent traditional management, it’s important to embed the GRC mechanism in the key business processes, and enforce good governance standards, GRC practices at daily business activities for harnessing communication, coordination, and control. Corporate governance indicates a relationship with the corporate boards, management and stakeholders. If all these parties would perform to the vision and mission of the organization, it would lubricate business processes and increase the organizational performance significantly.

Governance and risk management are important; focus on proactive planning and process optimization for collaboration, accountability, integration, people-centricity, including engagement and motivation because a focus on command and control has the tendency to damage an enterprise's capacity to grow the business. Governance processes and practices should be handled and prioritized in such a manner that they're inherent in the way without negatively impacting the working flexibility to deliver cohesive business solutions, and to ensure clear and concise information to key decision makers for solving problems effectively. By implementing effective GRC programs, corporations can deliver immediate benefits to the entire organization.

Raise visibility: Corporate governance is where resources are allocated to turning the strategy into a reality, from “as is” into “to be” state of the company; as well as how to improve decision effectiveness and consistency at the different layers of the organizational hierarchy. Organizations have limited resources and talent, solid governance disciplines can raise visibility of the process alignment, resource assignment, and overall business transparency. In practice, business management needs to make an objective assessment of their resource availability and allocation by asking: how many resources will you need and to what extent are these resources available to build desired capabilities, seek to determine whether the deficiency derives from any particular dimension - different resource types, etc.

If there's a problem with trust then governance will suffer, because motivations are not aligned across organizational boundaries. An effective, transparent process will help to distinguish between situations where governance is truly required versus those situations where governance is being used as an excuse for not doing the job of management! It’s important to instill governance philosophy in organizational culture, as extrinsic reflection of culture is your business brand. With strong GRC guidelines, authorities, disciplines, roles and responsibilities and clearly defined processes are in place to improve organizational transparency and ensure business effectiveness.

Unleash potential:
In many organizations, there are often disruptive processes or technologies that need some relaxation of the old governance models during the changeover. They are struggling because there is a lot of rushing around trying to fix problems instead of preventing risks, or governance taking away liberties that are essential to people doing their jobs in creative ways. For every corporation which should work effectively and run innovatively, you need strong GRC disciplines that help executives and management perform a risk analysis and improve decision effectiveness. Not only to cover the risk management, but also to create a risk intelligent environment in which change can excel within the constraints of the hierarchy of the organization.

Innovation cannot be separated from a specific business purpose and in a broad context. Governance is critical for meaningful innovation. But the governance aspect and innovation don't immediately come together depending on the context in which innovation is used. Organizations feeling stifled by governance may not have matured beyond operational risk and control. It is critical in adopting a social-technical-ecological perspective of governance models, encouraging change and unlocking business performance by “loose control” with a blended combination of governance practices and styles. A good governance standard and a set of GRC practices helps to nurture a creative culture with the very characteristics such as strong vision and leadership, improve reliable service/solution deliveries, cost optimization, availability of talents, scalability of operations, or culture cohesiveness, etc.

Eventually, as the company grows, so will the need for standard policies and procedures. High mature capability can only be developed and sustained via strong governance discipline. Policy-making is part of GRC discipline. It is critical to look at culture, staff training, processes, and technology first, make improvements if necessary, then determine whether new platforms and tools would be a good addition to the mix. Sound governance is to improve management effectiveness, eliminate risks and harness people centricity.


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