Best-practice Corporate governance can benefit boards in a multitude of ways with the support of a solid compliance culture. Examples of good governance practices are provided below.
- Positivity is encouraged. In a letter to the editor, chartered secretary Monique Legair states how clear policies and processes, along with a compliance culture, support improved results. Every board member must participate in that culture, ensure clear communication with management and the rest of the organisation, and respond promptly to evidence that a member is not participating.
- Getting capital at a lower price. A company’s cost of capital can be reduced by implementing good governance practices in today’s volatile economy. A company with strong corporate governance is likely to borrow funds at a lower rate than one with weak corporate governance. If a company has a solid governance framework, its debt or equity investors may be more willing to work with it.
- Enhancing decision-making at the highest levels. A recent report by the Corporate Governance Institute shows an association between an organisation’s governance and its ability to make timely decisions and thus improve performance. Additionally, poor governance has been correlated with a number of performance failures. There is no doubt that good governance ensures access to information and good communication between stakeholders, leading to better outcomes. Furthermore, good governance allows actions to be prioritised efficiently and effectively. The ability to weather tough economic storms and continue to support the sustainability of the organisation is invaluable.
- Controlling internal processes. Corporate governance involves ensuring that the board has an effective and adequate control environment in place, with the level of assurance associated with each important component of governance. A board committee or the board is better placed to act when non-compliance is signalled by the controls.
- Providing better strategic planning capabilities. Boards are able to formulate more successful strategies through quick access to information and strong communication with management. Resources and capital can be allocated more efficiently. As a result of a strong governance framework, the board will further be able to do the following: understand the regulatory environment governing the business; exploit technology from the perspective of production, distribution, and communications; and identify and manage the reasonable interests of all stakeholders in the business. An effective strategic plan must include all of these elements.
- Recruiting talent for the film industry. The inclusion of talented non-executive directors with complementary skills enhances the ability of the organisation to assess its overall sustainability, including its level of compliance with relevant legislation. To maintain sustainability, an organisation must recruit new talent that can adapt to the ever-changing market conditions. An environment that provides this level of support is equally important for a non-executive candidate.
The solution provided by the Intelligent Governance Cloud is comprehensive
Achieve best-in-class governance with Governance Cloud , the only integrated board management software. Board software automates the various tasks and activities of the board. The scope of governance responsibilities gradually expands as organisations become more complex and regulations become more stringent. Boards of directors can select the products they need to perform at their best and work within their budgets with the Governance Cloud to meet the demands in the boardroom and beyond.
The challenge of maintaining a high level of corporate governance is clear, as it requires constant review of changing regulations and standards. Diligent’s Governance Cloud is a set of cloud-based governance tools that enables leading bodies of organisations to mitigate risks and govern collaboratively at a higher level.