Corporate governance: Costly compliance or strategic lever?
At first glance, corporate governance may be perceived as merely a matter of compliance. While compliance is necessary, corporate governance can be fine-tuned into a strategic lever for sustainable success, allowing a business to navigate a myriad of business complexities, manage risks, and position the organisation to take advantage of future opportunities.
Goldours agrees that weak governance is a significant risk, and its impact can be considerable on the business, leading to poor stakeholder confidence, erosion of value, and damage to reputational risk.
However, good governance has significant benefits that extend beyond reducing risk.
Its benefits are both quantitative and qualitative, ranging from attracting investors and lowering capital costs to enhancing reputation and trust, driving sustainable growth and performance, improving risk management and resilience, facilitating effective decision-making, and ensuring legal and regulatory compliance.
Global consulting firm Mercer agrees and explains that organisations need to reframe corporate governance as an accelerator, not a brake.
When they do so, corporate governance becomes a powerful tool for gaining a competitive advantage, as they can move faster, act smarter, and capitalise on opportunities.
However, to achieve this, one needs a strategic framework that aligns with the organisation’s vision, mission, values, and objectives.
Mercer advocates a three-step process for the design process: Assess, design, and implement.
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However, let’s not forget that compliance can also serve as a strategic lever for achieving high performance.
It should be good news for the nearly 74% of organisations that view compliance as a burden, something to “get through” rather than an opportunity to improve, according to the Finnish e-learning platform and training provider Techclass.
They believe that compliance often encodes best practices that align with smart business operations and operational excellence.
Techclass says that leaders are increasingly embracing this perspective. According to recent surveys, 73% of executives believe that meeting compliance standards enhances how stakeholders perceive their company, among other benefits.
It believes that compliance is integral to the company’s mission and success.
For more insights, go here.
