Corporate governance is a key function that supports the health of the organisation, the society it serves, and the economy and environment of which it is a part. The earth is more fragile than ever before – ecologically, socially, economically, politically, and spiritually. The system is fraught with interlinked tensions, discontent, dis-ease, risk, and unravelling values.
By and large employees are not engaged. Customers have lost trust. Stakeholders are disenchanted. Societal pressure is mounting. Focus on management and leadership is making way for a new and greater focus on corporate governance. “Whereas the 20th century might be viewed as the age of management, the early 21st century is predicted to be more focused on governance”. (McRitchie1)
Journeying through the jungle of corporate governance is complex, even chaotic. Boards are expected to navigate numerous demands and challenges – sustainability, employment equity, information protection, corporate social responsibility and increased compliance, continuous learning and innovation. Boards are expected to do this surely and without hesitation.
In South Africa, a new world-class guideline for corporate governance and sustainability has been released – King IV™2. With it comes far-reaching implications for all organisations – large and small, NGOs , SOEs, Municipalities, Pension funds and listed and private companies. Other guideline resources are emerging around the World. We can and must also go beyond local guidelines and draw on the best practices and findings emerging from other countries.
Organisations need to make serious strategic choices.