Monthly Archives: April 2015
There is no doubt that the demand on directors’ time has increased and that the requirements and responsibilities of the board are at an all-time high. Therefore, improvements in processes, resources and support have a tremendous impact on how the board works. There have been several key changes in the boardroom that have helped improve the efficiency with which the board not only satisfies requirements but also increases its effectiveness. Access to compensation experts, governance programmes, on-site development opportunities and an increasing use of recruiting, accounting and other services firms are a few examples.
Directors and C-suite executives have never been as powerful as they are in today’s global market. The scope and wealth of the world’s 100 largest listed companies – with an estimated combined market capitalisation of more than $15 trillion – rivals that of many countries’ GDP. Whether, how and to what extent these leaders decide to make good use of this power is a key challenge for us all
There’s not a day that goes by without a cyber-related incident in the news. Although retailers, financial institutions and health care companies have been the main targets on cybercrimininals’ radar, no organisation is immune to a cyber attack or failure of technology. The costs associated with such incidents continue to rise. According to the Ponemon Institute’s 2014 Cost of Data Breach Study, the average cost of a large data breach was $3.5 million in 2014, 15 per cent more than in 2013.
It appears corporate governance is somewhat like a garbage can where problems and solutions are all mixed up. In fact, there are sometimes solutions looking for problems. And this has to do with the ever expanding range of things the directors have to answer for. With the plethora of company and board issues, the agenda for corporate governance is getting just too crowded. There is a serious congestion and it serves only to distract the board. We run the danger of having corporate governance often merely chasing its own tail.
In recent years, ‘say on pay’ has acquired an increased importance in governing the relationship between management and shareholders. The opportunity for shareholders to express their view in matters such as the definition of remuneration policies, at one time the sole domain of the board of directors, has paved the way for a resurgent activism by institutional investors.
Sir Adrian Cadbury has defined corporate governance as “the system by which companies are directed and controlled”. This is most probably the briefest definition of corporate governance, yet it is so accurate. The beauty of it is that it acknowledges that there is no one size fits all and hence allows for different systems for different companies or different regions. When it comes to the Middle East and North African (MENA) region, Oman was the first country to introduce a code of corporate governance back in 2002. So much has happened since then.
One of 2014’s biggest corporate governance stories was the seemingly inexorable rise in board-shareholder engagement with real-time, two-way interaction between public company board members and institutional investor representatives. This article examines that story and assesses the underlying drivers that suggest growth will continue over the next decade.
Over the past few years there has been much discussion in the media and by analysts about Japan’s growth strategy, including questions about whether the ‘third arrow’, also known as structural reform, is making enough progress. The short answer is that the third arrow is making dramatic progress in the area where it matters most in Japan: corporate governance.
These new dedicated control functions are, in many aspects, similar to the internal audit function. After having introduced the well-known ‘three lines of defence’ approach, this article presents to directors a method to challenge the possible overlap between the compliance monitoring and internal audit functions
As I eye my social media feeds, I see a stream of articles that provides a continuous repacking of enforcement actions, discussion about whom compliance should report to and much about ‘tone from the top’. Speaking of which, on the top or perhaps bottom of my anti-bribery reading list is a 42-page analysis of the recent Alstom Foreign Corrupt Practices Act (FCPA) settlement. Which is longer, I wonder, the analysis of the settlement or the settlement?
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