Corporate Governance in the Digital Age
Aligning People, Purpose, Process, and Performance to reach your business goals
Corporate governance is the system by which an organization oversees itself. It is the entire framework of rules and regulations, standards and practices, processes and protocols that direct and control the way a business operates, in the largest sense. Good corporate governance is a well-defined structure of checks and balances that ensure a company stays aligned with its mission, achieves its objectives, and fulfills its duties to all stakeholders.
Although it sets the tone for the management of a business, corporate governance is distinct from day-to-day operations. Conducted by the board of directors and encompassing every sphere of management, as well as both internal and external considerations, at its best corporate governance provides a strong, cohesive foundation for meeting an enterprise’s greatest goals—individual and collective, financial and social—and a roadmap for growth.
The principles behind good corporate governance are often broken down into four overarching categories:
People. Every side of a business is built on people. From founder, board, and employees, to suppliers, shareholders, and consumers.
Purpose. Businesses exist to fulfill a mission. Good corporate governance specifically serves that purpose and supports the achievement of those goals.
Process is the way a company’s purpose is pursued and achieved, as well as analyzed, assessed, and refined based on performance.
Performance reveals whether an organization’s corporate governance is working. Reviewing results, determining successes, reflecting on areas for improvement, and applying findings.
The four guideposts above encompass every other principle of corporate governance, including:
- Board of directors must be committed to accountability, transparency, fairness, and diversity.
- Board members must have relevant skills and experience to understand, oversee, review, and, when necessary, challenge management practices.
- Ensure integrity and ethical behavior. The board should clearly define and enforce a code of conduct among board members and executives.
- Equity. All shareholders must be treated fairly and equally.
- Transparency. Policies, procedures, and all relevant information must be disclosed and accessible to stakeholders.
- Corporation must consider and balance the interests of all stakeholders, meeting all contractual, legal, social, and market-driven obligations to all stakeholders, internal and external, including non-shareholder stakeholders.
The benefits of strong, positive corporate governance are far-reaching—and lead toward greater financial performance:
- Compels owners and managers to achieve objectives that are in the best interests of the entire organization and its shareholders.
- Builds brand identity, reputation, and legacy.
- Attracts investors, builds confidence and trust; therefore improves ability to raise capital, spurring economic growth.
- Increases morale in the corporate culture.
- Helps a company attract and retain top talent.
- Enables an organization to identify problems and address them quickly, averting crises, and thereby improving sustainability.
- Enhances competitive advantage—makes a company more agile, able to evolve in an era of rapid change.
These fundamentals of corporate governance are evergreen, and rely heavily on distinctly human elements—intellect, experience, skill sets, ethics, and more. There is no complete software solution—nor would one be desirable.
However, in today’s digital climate, technology can provide valuable tools and vital support for effective corporate governance. Up-to-date, secure technology can help you:
- Automate key business processes for greater efficiency.
- Centralize the management of legal activities, etc.
- Improve security and decrease risk.
- Ensure transparency by providing broad visibility of management activities.
- Increase efficiency in decision-making through availability/accessibility of up-to-the-minute data.
- Identify and manage security threats, whether legal, financial, organizational, or environmental.
- Enhance agility: keep IT and all departments nimble to adapt to the constant evolution, acceleration, and increasing complexity of today’s business world.
At Lukasa, we partner to help you define corporate governance for your organization and implement the most effective technology for its unique needs. Our veteran team of experts can leverage both the experienced leadership within your company and supportive modern digital solutions to enhance your corporate governance and propel your enterprise to the next level.
About Lukasa - lukasa.com
Lukasa is a business and technology modernization firm focused on process analysis and improvement, system and data unification, cloud migration, tailor-made software and implementation—maximizing efficiency and growth.