Holistic approach to governance

thestar.com.my: Business News: "Holistic approach to governance"

By MICHAEL J. SEGON

MANY people view corporate governance as a means by which organisations can ensure their activities do not put at risk a key feature of business, that of reputation.

Much of the literature addressing corporate governance focuses on the duties and responsibilities of company directors, members of company boards and those of the senior executives of organisations.

This literature also tends to be around the appropriate financial structures and reporting mechanisms that need to be in place to ensure good decision-making and to minimise the occurrence of damaging behaviour such as fraud and corruption.

There can be no doubt as to the need for organisations, and in particular the senior executives and directors of organisations, to take these duties and responsibilities seriously. However, solely financial or accounting based approaches to governance are a limited and incomplete approach.

Organisations need to recognise that the financial and legalistic framework of corporate governance is in fact underpinned by ethics and morality."

COMMENT:
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Reputation Risk is an intangible reality for any substantial business. Mr. Segon has suggested that the civility of the organization is a key indicator of it's exposure to future reputational risk. In fact, the aggregate of peoples day to day management and decision making is what dictates the barometer of daily risk. We agree that the roots of any successful governance strategy begins with the operational layer of managers who make the split second decisions during the course of a business day. This is where the companies reputation is won or lost on every transaction and every proposal put in front of a customer.