King IV – a Corporate Governance update
Organisations are finding it necessary to contend with increasingly dynamic and demanding external and internal environments by making good corporate governance accessible and fit for application through the adoption of governance practices suitable to the organisation and able to sustain value creation. Governance and management systems are being designed to reinforce and govern a holistic and inter-related set of arrangements that can be understood and implemented in an integrated manner using organisational structures, processes, practices and ethical, conscious behaviour.
Governance and Management
Corporate governance is the system by which a governing body exercises ethical and effective leadership to establish:
- an ethical culture
- sustainable performance and value-creation
- adequate and effective control by the governing body
- trust in the organisation, its reputation, and legitimacy.
Putting corporate governance into practice requires a holistic and integrated set of arrangements that can be evaluated and directed to create the value stakeholders expect. The ITGN’s Governance and Management system has all the features needed to implement King IV.
Organisations often use a wide variety of resources and governance mechanisms to achieve their purpose, strategic goals and to fulfill the broader needs of stakeholders. Leveraging resources requires the establishment of accountability, assignment of responsibility and transparency and fairness in the way work gets done. The implementation of corporate governance starts with an examination of the roles and responsibilities within the processes used by the organisation for decision-making, specifically those that impact the achievement of strategic goals. This will reveal who is accountable and who is responsible for the practices and governance mechanisms that achieve the governance outcomes. A governance and management system institutionalises the organisational structures, processes and ethical, conscious behaviour.
Technology and Information Governance
While governing bodies are expected to be pro-active in ensuring that information assets are leveraged for growth there are few tools actually available that provide governing bodies with sufficient oversight. A governance and management system provides an integrated solution that brings the governors and the managers together and provides a holistic approach for them to effectively govern and manage the current and future use of technology and information.
A governance and management system provides the means to institutionalise the enablers of good corporate governance. People, process, technology, and information come together in an integrated governance and management system to enable the creation of value and support the achievement of the business’ and organisation’s strategic goals.
An organisation’s capability to govern and manage is developed within a governance and management system and enhanced through the use of a suitable mix of enablers:
- Principles, policies, and frameworks
- Processes, practices, and activities
- Organisational structures, roles, and responsibilities
- Skills and competencies
- Culture and behaviour
- Service delivery components
- Information management.
Orchestration and choreographing the practices
Corporate governance is not accessible or actionable if the application of the underlying practices cannot be influenced. To successfully achieve the organisation’s purpose, strategic goals and deliver value to the stakeholders the governing body and executive managers require the ability to evaluate and direct both the regular and ad hoc activities performed each day by internal and external parties. Leadership and organisational structures are of little benefit if they cannot influence the organisation’s processes and practices, direct the alignment and prioritisation of value delivery, govern risk management, optimise resource usage and track performance.
A governance and management system provides the functionality required to orchestrate those responsible and choreograph the implemented practices in the manner the governing body and management have chosen to direct operations, effectively manage risk, consume resource and comply with regulatory obligations. Being fit for purpose is paramount. Every governance and management system is to be uniquely crafted in accordance with size, available resources, and complexity of strategic objectives and operations so that it is suitable to the organisation and able to sustain value creation.
Maintaining a Framework for Governance
Regardless of any technical and organisational arrangements deployed by management, these arrangements will be fundamentally undermined if operated outside an effective risk management and governance regime.
It is essential that the implemented corporate governance framework is able to ensure procedures, personnel, physical, technical and organisational arrangements, and controls:
- remain effective throughout the lifetime of service delivery and value creation
- are responsive to changes in the services and value delivery propositions, and
- change in accordance with threat and technology developments.
A documented governance and management system ensures corporate governance is understood and communicates which practices are required to support service delivery, performance standards, value creation, regulatory compliance, and internal controls. Records of assigned responsibilities, current status, analysis, evaluation, and completion demonstrate compliance with the selected principles, policies, frameworks, standards and legal and regulatory requirements applicable to the practices assigned.
The governance and management system incorporates the priority, status, sequence, and timing of actions, enables the monitoring of capability, progress and outcomes achieved, and coordinates continuous improvement.
Resource: IT Governance