Thursday, April 14, 2022

Initiategovernancepractices

Governance is neither linear nor single dimensional nowadays, it should be understood via multidimensional lens and get enforced holistically.


Governance is about steering the organization in the right direction. Corporate governance discipline can fulfill its purpose as a high-level business enabler by providing a structured communication bridge between shareholders/investors and top business leaders such as corporate directors. 

How to enforce the organizational governance discipline depends on the nature, scale, and complexity of the organization, as well as understanding its risks and conduct.


The goal of sound governance is to improve the management effectiveness and eliminate risks: When the organization lacks effective governance discipline to guide through, people are running in the dark, fumbling around to make decisions blindly, or walk around the problems helplessly. It causes small thinking, conflicts, arrogant attitude and poor behaviors. GRC can be used to raise visibility and awareness for many things that are captured at the different levels of the organizational hierarchy, and bring them in front of the leadership team to oversee strategy management.

Corporate governance indicates a relationship with the corporate boards, management and stakeholders. It’s critical to enhance GRC disciplines at daily business activities for harnessing communication, coordination, and control. 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.

In the simplest terms, governance is who you are and how you do it: Governance is about enforcing decision effectiveness, getting people, culture, accountability, and performance right. Ineffective decision-making becomes one of the biggest root causes to fail businesses due to dynamic business reality with "VUCA" characteristics. Decision effectiveness relies on an agreed common approach, not a predetermined set of "one size fits all" planning and processes.

Governance clarifies who you are and how you do it. You need a sound process with governance mechanisms embedded in it to frame the decision scenario, leverage quality information, weigh options appropriately with the right people and actually make effective decisions consistently. In fact, governance as a decision optimizer is the act of guiding, influencing and regulating the decisions and behaviors of the entire workforce, management included, to improve decision maturity and drive sustainable value-creation to the shareholders.

Effective leaders build governance standards and a set of GRC practices:
The principles as a compass will guide all levels of the organization to operate cohesively and provide a guideline of harmonizing decision-making across a distributed organization. An effective governance model illustrates the governance processes with the mechanisms of escalation and resolution used to strengthen the weakest links of strategy management, and make seamless functional and skill alignment.

Without strong governance, management perhaps gets lost or even totally out of control. Effective corporate governance could be part of the strategic planning cycle, enforcing decision consistency across the organizational hierarchy. Implementing and leading effective GRC programs definitely requires more than just experience and subject knowledge. At a strategic level, the goal of strong information governance is to well balance the long term focus with some quick wins. Broad scope and long term focus are great planning tools and overall targets. But you have to break down strategic goals into smaller tactical goals and objectives that are achievable in a reasonable time within the current business environment. In fact, management and governance are complementary activities to improve organizational performance and maturity.

Governance is neither linear nor single dimensional nowadays, it should be understood via multidimensional lens and get enforced holistically. Corporate governance should directly link to the performance of both public and private organizations. It needs to be remembered that governance as a discipline is a living breathing entity that continually requires stroking and attention, otherwise, it will stagnate and lose its ability. The more diverse, the more regulated, the more geographically dispersed an organization is or becomes, the more important an integrated or federated governance discipline should be. Integrated governance leads to effective management by enforcing accountability, shared ownership, empathetic communication, consistent decision-making and risk intelligence






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