A business is only as good as its reputation. And now, more than ever, we are living in a world where reputations can be made, and destroyed, overnight. It’s not just about keeping shareholders happy anymore – interest in corporate governance is becoming important to ever-growing segments of the population and company leaders would be wise to take heed. This is an area that demands constant, rigorous attention, because the marketplace is the ultimate compliance officer.
But what exactly is good corporate governance? In its simplest terms, it’s a commitment to openness, honesty and transparency. It’s a willingness to adhere to a written and unwritten code of ethics and moral values, with every decision guided by independence, accountability and fairness. What’s important to note is that laws and regulations alone cannot guarantee fair practices. Every individual in the company – from top to bottom – must have a willingness to act ethically.
Is prevention better than cure?
When it comes to corporate governance, the answer is most definitely yes. You may have heard the old saying “It’s easier to ask forgiveness than to ask permission.” Open any newspaper and you’ll find an embarrassing number of institutions attempting to do just that – assuming they can get away with dodgy business dealings or treating their customers poorly. But in this age of near-instant information, word spreads. People find out. And they don’t easily forget.
According to Parmi Natesan, Executive: Centre for Corporate Governance at the Institute of Directors in Southern Africa (IoDSA), "Poor governance practices continue to hamstring our public sector institutions, and we need to understand the issues here so they are not repeated.” Indeed, when a company’s reputation is damaged it’s extremely difficult to fix it. Just ask VW, or Bell Pottinger, Facebook, Google, or the seemingly endless list of local SOEs who are in full damage control. Some will never recover, and their shareholders are understandably livid. If they’d simply focused more on ethical corporate governance from the start, many of them wouldn’t be in this situation today.
It’s an issue that has not gone unnoticed. In February’s hard-hitting State of the Nation Address, President Cyril Ramaphosa himself stated that “This is the year in which we will turn the tide on corruption in our public institutions.”
Natesan adds, “The essential first step to achieving this laudable goal is to instil leadership that is both effective and ethical (as espoused in the first principle of King IV) across all sectors… The link between ethical and effective leadership is one of the distinguishing features of King IV, and I think recent events have shown us the fundamental truth of this.”
So where does that leave us? Certainly, effective, ethical leadership is vital, but leaders can only do so much without having systems in place to allow them to focus on the big picture.
Good corporate governance starts at the source
“It may sound like an old cliché,” says Stuart Scanlon, managing director of epic ERP – a leading ERP planning software systems specialist, “but you cannot manage what you cannot measure. Corporate governance starts with having real-time access to information across the business. Disparate data sources and synchronised reporting databases simply cannot cut it anymore.” Solutions like Epic ERP and Epicor CRM are instrumental in that they are able to consolidate multiple data pools into a system that allows for instant auditing and control over every aspect of your company’s interaction with your customers and prospects, all while providing the sort of transparency, agility and responsiveness that are vital to retaining them. In this real-time world, every minute gained can make a huge difference in ensuring that your corporate governance goals are being met, and that issues are addressed the instant they arise.
Ultimately, we all benefit
The impact of effective corporate governance can be far-reaching, extending beyond individual companies to the national economy as a whole. If everyone plays their part, public and investor confidence grows, which is especially important when one considers the increasingly international character of investment. If we as a nation are to enjoy the benefits of the global capital market, and an increasingly globalised customer base, we must make it our priority to adhere to internationally accepted principles and corporate governance practices. It’s a win-win situation – both morally and financially.
ORIGINAL ARTICLE URL: https://www.epicerp.co.za/corporategovernance-gdpr-compliance-2/