Thursday, July 21, 2022


Governance principles need to be assessed, evaluated, and modified to address the constantly changing environment and “VUCA” reality.

Corporate governance is about enforcing business effectiveness, getting people, culture, accountability, and performance right. The more complex contemporary organizations become, the broader scope of corporate governance turns out to be. It provides monitoring, measuring, and enforcement mechanisms to corporate management. 

Corporate governance activities include setting principle guidelines, grounding rules and policies, and monitoring business results. What are the perspectives for the future of governance? What are the principles to enhance GRC disciplines and practices?

Keep things simple, make complicated things less complicated: In today's business dynamic, governance shouldn’t add a heavy layer of control and enforcement which causes discomfort or management bureaucracy. There are varying factors that decide governance effectiveness, there is a relationship between simplicity and clarity. Eliminating complication more clearly reveals the intentions of governance enforcement.

Although you can't automate human judgment or decision making, you can certainly automate a lot of the mechanical activities in GRC to improve its efficiency. With simplicity, what you are adding is clarity & purpose. Strong GRC processes and practices are critical to update policies, have the minimum required complexity to enforce clarity, support flexibility, implement appropriate corrective actions, and monitor performance, regulatory change periodically.

Keep holistic governance solution:
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. The best practice of governance takes a value-creation, holistic approach. As you shouldn't finger point without laws (policies, standards, procedures), and you shouldn't have laws without someone having the final say on interpretation.

Corporate governance has a direct link to each business and its crucial processes. Not only from the financial results, but also from the involvement and signs being displayed about what guidance, values, and principles governing the company's commercial activities. Holistic governance discipline enhances corporate principles and rules that need to be followed to improve the functioning and transparency of the company, its business strategy, processes and management performance, and improve risk management in a structural way.

The shift of governance is to focus on enterprise change:
Governance involves updating rules, optimizing processes, or developing/scaling new governance practices, etc, for encouraging progress changes, enabling flexibility, improving agility. More organizations will make a bold step—reengineer or reinvent the old fashioned governance control, focus on encouraging meaningful changes and nurturing innovation in a structural way.

The desire for proactive change and radical innovation will make governance issues more “loose control,” and cross-disciplinary. In an organization with agility, the effectiveness of GRC is to encourage, actually orchestrate change, and enforce accountability. It makes sense to have governance processes that are more information-based, lightweight, continuous, focus more on results and adapt to changes rather than static plans, with the goal to run a high performance business.

Governance principles need to be assessed, evaluated, and modified to address the constantly changing environment and “VUCA” reality. By enforcing GRC principles and practices, the process effectiveness and efficiency achieved through standardization and optimization directly impact strategy management success, and improve the overall organizational agility and maturity.


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