All business, whether big or small have a governance framework. Usually businesses don’t call their processes, systems and internal controls as a governance framework, but this is exactly what it is. When it comes to corporate governance and governance frameworks, one size will never fit all and an organisation should consider designing policies, procedures and setting internal controls which are relevant and fit for them. The importance of having an effective risk governance framework was highlighted in the OECD’s Risk Management and Corporate Governance report which you can find by clicking here.
In the region we see different types of businesses, entities and organisational structures; these also span different industries and even jurisdictions such as onshore, offshore or in free zones. The beauty of diversity is that it makes your organisation unique and hard for your competitors to replicate. An organisation will spend time and money to build its brand, reputation, assets, and services to create competitive commercial advantage and increase market share. Having the correct corporate governance tools will safeguard sustainable growth and healthy profits whilst protecting your business’s reputation and brand. We have seen numerous examples of businesses having the best corporate governance manuals and handbooks or even policies but still failing to following good governance practices. Why is this? The answer is simple, processes, systems, policies and procedures are useless unless followed by all employees and embedded in the corporate culture. An individual, a group or even a Board can choose to circumvent processes and systems to exploit weaknesses in internal controls and this can result in fraud or financial loss, worse still, such breaches could result in reputational risk and even impact on the market share of the organisation through a lack of trust.
In sophisticated groups and organisations you will see a holding company and numerous subsidiaries, each of which carry on operations and business to maximise profit, whilst being sustainable and maintaining market share and competitive advantage. In this region, it is normal to see Boards and Committees at the holding company level and on occasion, depending on the size of the subsidiary, you will also see a Board and Committee structure that mirrors the parent company.
If you are looking to formalise your organisation’s working practices, systems and internal controls or if you are looking to refresh your governance framework, look no further, our team of thought leaders and specialists can advise. Your organisation may require assistance to help embed or rollout a new governance framework and change to processes and systems.
With experience in working with different types of entities, both in the region and internationally, we can advise and provide suggested options to ensure your organisation follows best practice governance, which is aligned with your Board’s risk appetite and tolerances.