Tuesday, November 15, 2022


Sound governance as a management enhancement mechanism is part of eliminating risk and doing the right thing.

Organizations across the vertical sectors have different focal points, and they are at the different stages of the business development, growth cycle. Thus, there are different types of governance needed depending on where the piece of work sits on a spectrum. 

For all corporations which should work effectively and run smoothly, there's a correlation between corporate governance and business performance. The more complex contemporary organizations across the vertical sectors become, the broader scope and deep penetration of corporate governance turns out to be.

Governance discipline will allow not only to protect the existing value but also to create multifaceted value for its shareholders: For every corporation which should work and be effective and efficient, you need good governance to build up trust by bonding people around clear and benevolent intentions. With today's "VUCA'' digital new normal, governance is a sophisticated process that if well executed at the demand level, will lead to better problem- solving and value-creation.

Governance concern is that businesses will lose sight of their prime purpose. Governance involves updating rules, optimizing processes, or developing, scaling up new governance practices, etc, for generating value to varying stakeholders. The business ecosystem is dynamic, it presents a very real risk that governance as a discipline will begin to lose focus of its prime purpose if it does not address strategically important emerging issues and help their organization fulfill its purposes ultimately`.

Governance can be used to drive business change and corporate value the most:
It’s important to set the right priority and concentrate on important matters, encouraging constructive changes, enhancing accountability, and enabling flexibility. If there's a problem with trust, then governance will suffer. An organization that values hierarchy and status quo over trust, collaboration and the freedom to innovate will be a poor fit for change agile. Effective governance enforces trustful relationship building as it sets the right policies and processes to lubricate communication and harness changes.

Many organizations are at the crossroads of the business transformation to make sure information and interaction flow in every direction. Some governance causes mediocre management. The desire for proactive change and innovation will make governance issues more “loose control,” and cross-disciplinary. So the business leaders need to clarify and verify to ensure governance disciplines are strong to steer business in the right direction. Consideration of your current governance maturity: where you are today and how promptly you can change, coupled with a good definition of roles/responsibilities wrapped around governance processes to improve business agility.

Corporate governance discipline can fulfill its purpose as a high-level strategy enabler:
There are different dimensions of corporate governance focal points such as strategy, accountability, policy, and monitoring. Through solid governance discipline, the alignment process can become a harmonized process, the accountability hierarchy chains can be strengthened to enforce management effectiveness. The corporate leaders need to ponder: How does the organization ensure policy coherence across the portfolio? To what extent and how does the corporate planning align corporate priorities, sector business plans, and resource allocations?

Nowadays, strategy management is an iterative continuum. Effective governance should oversee the business components such as planning, processes, resources, cultures, systems, to ensure the organization as a whole is more effective and efficient than the sum of its parts. It’s important to understand accountabilities of the environment - regulatory, shareholder, etc; develop business policies offering further constraint/guidance to implementation of strategy, monitor performance consistency.

Uncertainty and risk are inherent in every venture, information abundance and rapid change are the new normal. The management and governance are complimentary interdependent disciplines to close gaps for improving business effectiveness and agility. Sound governance as a management enhancement mechanism is part of eliminating risk and doing the right thing. Governance is also a learning tool that needs to be well understood and reinvented for improving business management commitment and maturity.


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