Monday, May 23, 2022


Governance is to frame business management for improving its effectiveness and maturity.

With "VUCA" new normal, in some circumstances, the line between management and governance is blurred, there are varying degrees of understanding of the scope of corporate governance, and cross disciplinary governance practices. GRC means keeping abreast of standards and auditing to all regulations that may affect the company. 

Good governance practices improve the overall organizational effectiveness and maturity. GRC practices at daily business activities harness communication, coordination, and control, improving the overall management discipline. The flavor of GRC practices depends on the nature of the business and the level of the organizational maturity.

Creates an effective decision-making system to improve business coherence:
Governance is about enforcing decision effectiveness, guiding and regulating decisions and behaviors to serve the fundamental purpose for which the organization was created in the first place. The best practice of governance enforces information-based decision-making, and getting the people, culture, accountability, and performance right. It can assure the corporation’s operation under the correct directions and behaviors correctly by improving decision coherence across the organizational hierarchy.

Governance is about who you are, how you make the right decisions and do things in the right way. It sets a common process to deliver real-time accountability and transparency, Governance mechanisms can be embedded in the myriad day-to-day decisions and behaviors taking place at all levels of the entire organization. Strong governance provides a platform for structured decision-making to improve business maturity. It enhances the investment decision cycle and improves the effectiveness of a balanced investment portfolio. It makes conceptual sense to the top leadership team for clarifying financial returns, return timeline and risk.

Create an excellent performance system for long-term business growth:
There's a correlation between corporate governance and business performance. The solid governance methods, techniques, structures, etc, is based on the design of management systems to enforce business process transparency, optimize workforce planning, resource alignment, and performance management system effectiveness. Business resources including technological, financial, reputational, market structure and institutional assets, etc, are limited. By implementing effective GRC programs, corporations can build an excellent performance system, and deliver immediate benefits to the entire organization

There's a clear connection between bad governance and poor performance. There should be a governance mechanism embedded in all crucial business processes, including the delegation and assignment of responsibilities for carrying out the successful execution of assignments to achieve high performance results. Usually the governance structure can’t impact performance directly; it must be through the governance behavior. Strong governance discipline with good governance structure and behavior create an excellent performance system to make consistent deliveries.

Create an agile change management system to increase organizational maturity:
Change is not for its own sake; Change Management is an overarching management discipline which needs to weave many key business factors into a change competency. When companies become bigger and bigger, they try to control processes with practices and administrative procedures that make it difficult to disguise the real goal of the company. Governance is the complementary discipline to ensure change management effectiveness by making governance issues more “loose control,” and cross-disciplinary. Corporate governance activities include setting principle guidelines, grounding rules and policies, to harness change management disciplines for achieving collaborative business results.

One point of struggles is governance taking away liberties that are essential to people doing their works in a creative way or make change flexibly. Lack of accountability is often one of the root causes of change inertia. In fact, accepting responsibility is when we prove our values and build our trust. If there's a problem with trust, motivations are not aligned across organizational boundaries, change would be decelerated. Solid governance discipline builds trustful relationships, harness connectivity (communication, coordination, and control), raise visibility of their core processes, enforce change with trust and flexibility. and improve organizational agility and maturity.

Governance is to frame business management for improving its effectiveness and maturity. 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, and climb towards the upper level of business maturity successfully.


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