Corporate governance isn’t just about putting restrictions on what you can do; it is the guiding force behind business progression.
Digital era is volatile, complex, uncertain and ambiguous, corporate governance is not just about governing operations and tactical efforts, more about setting the right directions, overseeing strategies, and monitoring performance.
Governance value is tricky because it’s subjective in the eye of the beholder as it could mean different things to different people. Governance as an effective approach to complement management practices should be an enabling vehicle to realize multifaceted corporate value. The strong governance principles and practices steer organizations toward the journey of value-adding and high performance. Gauging business success has a multitude of focus such as overall business capacity and capability to achieve strategic goals with on-time, on-value deliveries; the fiscal health of organization, and customer satisfaction.
It’s important to know that there is a strong compliance element to corporate governance: Governance is all about conformance and performance. Compliance is the management discipline of designing and implementing effective steps to ensure that the organization actually complies with the laws and regulations relating to achieving business goals. Governance defines the controls that are required to manage the risks, compliance is ensuring the governance requirements are met. The effective compliance tool monitors change, alerts the organization to risk conditions, and enables business accountability and effectiveness.
Traditional compliance management is largely as a means to preserve value, rather than to create value. Organizations must seek a process for integration of policy-setting and processes to make compliance more proactive. The risk appetite and compliance requirements are outlined within the confines of the business objectives, and they help to achieve good governance. In fact, compliance is a subset of “governance”; a well-governed organization goes beyond that compliance which is necessary and appropriate, to a state of compliance that creates competitive business advantage.
It’s important to use architecture as the process manager – defining and managing the “how” of the governance process: In a complex world, in a complex organizational system, in a complex business domain, it’s impossible to change rightly or have a good governance model without having a holistic view or clarified business logic. Thus, business architecture is an important tool to enforce enterprise governance, harness the integrative cycle of business strategy management and emerging properties (trends, opportunities) to create the business synergy. High mature capability can only be developed and sustained via strong governance discipline.
Business architecture and governance need to go hand-in-hand. Though architecture should only be part of the governance equation. The business roadmaps are one of many inputs into a mature business portfolio management process which is part of governance. By applying enterprise architecture as a knowledge management, facilitation and process management tool, are you able to point out the opportunity for shared or reusable components of business process, information or technologies, optimizing governance smoothly.
Corporate governance isn’t just about putting restrictions on what you can do; it is the guiding force behind compliance, risk management, ensuring compliance with policies, and controls to reduce risk. In a high mature organization, governance must be viewed and assessed at the enterprise level, developing innovative governance practices and achieving governance holism.
