Is it time to 10X your governance and compliance strategy?

from Ambition Issue 59 (July/August 2023)

by Northern Ireland Chamber of Commerce and Industry

A Good Problem

The volatile, uncertain, complex, and ambiguous (VUCA) environments that organisations operate within today necessitate a more holistic and embedded approach to corporate governance and compliance.

Globally, issues such as Covid-19, the war in Ukraine, stock market sanctions, and the changing fortunes of cryptocurrency have been significantly impactful on organisations, as have domestic issues such as revolving-door politics and steep inflationary indicators.

Financial and legal services businesses in particular are mindful of increasing regulation demands; the need to mitigate risk; ensuring that technologies facilitate compliance reporting and client communication; and that effective cyber security mechanisms are in place. Therefore, governance and compliance (GC) activities can no longer be siloed within the company secretarial team, nor indeed should they be the responsibility of a lone company secretary in smaller companies.

According to the Institute of Chartered Secretaries and Administrators (ICSA) Next Generation Report (2018), GC is everyone’s responsibility within the organisation, whether the lens is on procedures and controls, communication, stakeholder engagement, social purpose, climate finance, diversity, or employee equity. Statute and regulation will provide the necessary structural framework for legal compliance, however, political action, company constitutions and internal strategic decision-making are becoming increasingly focused on corporate social responsibility (CSR) and the environmental, social and governance (ESG) reporting framework.

The 10X rule has long been associated with performance management and personal goal setting and can resonate strongly with organisational leaders who are not content with the current status of their GC strategy. There are many indicators that will suggest that there are issues that could be addressed by implementing the 10X ethos. Deficiencies include board packs exceeding many hundreds of pages, board meetings that are a full day in duration, cyber security breaches, poor storage of data, the use of personal emails for communicating with board members, and casual acceptance of minor compliance breaches, amongst others.

Further, training for executives, board pack authors, the company secretary, and importantly the board itself should be an ongoing, iterative process, however, this is often not the case. The aim of 10X is to set goals which are ten times beyond what would normally occur to continually push the organisation to achieve highly and to address inhibitors which are stagnating real progress on governance and compliance.

The argument is that by freeing the futile energy that is expended on burdensome and repetitive tasks and harnessing it towards transformational and aspirational organisational GC goal setting will lead to best practice rather than mere conformance. Whilst a 10X approach may seem too much, too soon, the ethos of continuous improvement cannot be underestimated especially where stakeholder expectations and values are concerned.

Discerning stakeholders, both internal and external to the organisation, are increasingly aligning themselves with businesses that are transparent about their governance, compliance, CSR, and ESG reporting. It is reported that business leaders who engage in reporting on an ambitious scale are more risk aware and can scan their environment to identify emerging trends on social and environmental issues. Aligning the organisation’s vision, values, and purpose towards reporting structures that are exceptional and which safeguard stakeholder interests can create substantial value-add.

Despite budgetary tension, increased investment in technologies across legal, financial, and regulatory reporting is required to future proof the company, and importantly, commitment to ongoing training is required to ensure that individuals are aware of the broad reach of governance and compliance issues within businesses today.

ICSA (2018) reported that 42% of businesses were allotting insufﬁcient time and resources to deal with the volume of regulation, and 21% were already experiencing a lack of specialist expertise to understand risk and opportunities. To this end, organisations must seek out excellence in training which is focused on the myriad of highly complex governance and compliance issues which face organisations today.

Specialist training in governance and compliance is offered by Ulster University by way of the MSc Management and Corporate Governance programme. This is the only course on the island of Ireland and one of the few in the UK which combines the much sought after GradCG (formally GradICSA) qualiﬁcation from the Chartered Governance Institute alongside a valuable Master’s qualiﬁcation.

The two-year part-time course provides ﬂexibility for those already in employment and is aimed at those who are working in company secretary or governance departments, or for those at board level who have corporate governance and compliance responsibilities.

Financial regulations require that governance professionals and company secretaries are appropriately qualified for their role – the combined professional accreditation and university qualification on the MSc Management and Corporate Governance meets this requirement. Both are recognised globally, and graduates are equipped with a wide range of work-ready skills including corporate governance, compliance, risk management, boardroom decision-making, strategy, law, behavioural dynamics, effective team performance, and corporate financial management.

If you would like to discuss how this programme can add value to your business, please contact Ulster University Business School’s Business Engagement Team at: engage@ulster.ac.uk

• Multi award winning, including Great Taste, Irish Quality Food Awards and Blas na hÉireann Gold awards

• Family run business

• Farm to fork

• All hens are free range

• High welfare standards

• British Lion accredited