Wednesday, January 19, 2022


Governance is a sophisticated process that if well executed, will lead the business to reach the next level of business maturity.

Due to the overwhelming growth of information and dynamic business environment, there is a shift of governance to focus on enterprise change and improve organizational maturity. Good corporate governance highlights that the board of directors is ultimately responsible and accountable for developing and sustaining the culture for an enterprise to prosper. 

Corporate governance controlling and enforcement takes a new meaning such as agility, intelligence, and creativity in the dynamic era of digitalization. The corporate board leaders need to evaluate whether today's governance is over-control, not resilient enough to embrace the change, and how to improve governance effectiveness and maturity.

Agile governance: Governance is complementary to management disciplines, to improve business effectiveness – doing the right things. Given many organizations don't view governance as "decision-making optimization," their governance efforts usually devolve into time-consuming, costly, overbearing bureaucratic constructs. In order to adapt to rapid changes, governance practices need to be sufficiently informed and able to keep pace with what is going on. Thus, it’s important to optimize traditional governance by setting agility tones such as improvement, iteration for dealing with the dynamic, complex, but adaptive business system smoothly.

So the purpose of agile governance is not to eliminate complexity, but to optimize complexity, achieve resilience, and reach a state of interdependence that has desirable characteristics such as self-organizing and self-regulating. Agile governance improves decision coherence across the organizational hierarchy, expanding to one further level of detail of agile governance practices;  requirements management becomes non-linear due to agile practices; more flexible resource management is needed to cater for agile; synchronizing business initiative management and change management, balance of creativity and standard to improve overall organizational maturity.

Information-savvy governance: Uncertainty and risk are inherent in every venture, information exponentiality and change are the new normal. Sound governance is part of eliminating risk and doing the right thing. Information-savvy governance is about prediction and prevention. With the critical output from GRC intelligence, businesses are resilient to known risks which are predicted, improve business resilience and speed. The data-oriented metrics-wise engagement is leading the organization to become much more proactive and intelligent and enhance governance discipline and practices. The information-based smart governance process needs to have dynamic aspects to it. It is rigorous; but not overly rigid; it can handle ad-hoc and exceptional matters smoothly and it knows enough to be able to handle business complexity effectively.

Governance is all about conformance and performance. It means to conform to laws/regulations etc, and performing well to achieve business goals; performance related data or information enable the company to manage and improve, enhance governance approach to steer the organization in the right direction. The best practice of governance enforces information-based decision-making, takes a value-creation approach which is embedded in the myriad day-to-day decisions and behaviors taking place at all levels of the entire organization. As governance is about guiding and regulating those decisions and behaviors to serve the fundamental purpose for which the organization was created in the first place.

Interdisciplinary & innovative governance: Organizations across the vertical sectors have different focal point, and they are at the different stage of business growth cycle. Thus, there are different types of governance needed depending on where the piece of work sits on a spectrum. The desire for proactive change and radical innovation will make governance issues more “loose control,” and cross-disciplinary. Practicing proactive, interdisciplinary GRC means keeping abreast of standards and auditing to all regulations that may affect the company, set a common process to deliver real-time accountability and transparency, provide a platform for determining sound corporate attitude, behavior and structured decision-making for improving business maturity.

Every organization has a set of governance rules, processes, and practices. With the increasing pace of changes, some of them are perhaps outdated and stifle innovation. Thus, governance on the board level involves updating rules, optimizing processes, or developing/scaling new governance practices, etc, for encouraging progress changes, enabling flexibility; setting remuneration policies and processes that reflect the desire for the organization to be innovative. Governance is to frame business management. The corporate rules and principles established based on interdisciplinary governance practices can be followed to improve the functioning and transparency of the company, its business strategy, and management performance. It should orchestrate change, do it with trust and flexibility.

Nowadays, businesses have to deal with the unprecedented level of uncertainty and change, hence, GRC becomes more critical than ever, it is a sophisticated process that if well executed, will lead the business to reach the next level of business maturity.


Post a Comment