Good governance and compliance doesn’t always get a lot of airtime, which is strange considering it’s the backbone of any ethical organisation.
Whistleblower Edward Snowden is a controversial figure. The former National Security Agency contractor made headlines around the world after he leaked classified information about the US government’s global surveillance system – a system that he and many others found to be troubling.
Regardless of what you think of him, Snowden exhibited values that organisations should want in all employees: a strong sense of personal ethics, and a belief in accountability. Where people disagree is on whether he did the right thing by going outside his organisation with his concerns. If he was so worried, his critics question, couldn’t he have tried to fix the issue from the inside? His response has been that it wouldn’t have changed anything. He didn’t trust the culture and governance of the organisation.
Good governance isn’t just nice to have. The lack of it has been behind some of the biggest news stories of our time.
The Banking Royal Commission is a local example. From remuneration practices that incentivised profits over customer satisfaction, to the widespread practice of charging customers for services that weren’t provided, the financial institutions were guilty of structural faults, more than individual follies.
In his final report for the Royal Commission, Kenneth Hayne wrote: “Culture, governance and remuneration. Each of those words can provoke a torrent of clichés. Each can provoke serious debate about definition. But there is no other vocabulary available to discuss issues that lie at the centre of what has happened in Australia’s financial services entities.”
But how do you know if your organisation is on top of governance issues? One way is to appoint a governance and compliance champion. Someone who is passionate, skilled and qualified – whether that’s in Governance Practice, Governance and Risk Management, or Governance for Not-for-Profts.
A fresh focus on risk and governance
Of course, good governance is about more than just staying out of the news. These days, ethical business practice is important to the bottom line. A lack of robust governance will impact your business’ longevity.
But what does modern good governance look like?
While there are principles that apply broadly, different organisations will put different processes in place. For example, some are taking the next step in risk management and not limiting it to the financial side of the business. They think about risk as it applies to employees. Companies with the resources to do so conduct psychometric tests of candidates to make sure they are hiring people with the right risk appetite. The right candidate for a sales role might be more comfortable with risk, while a payroll candidate will be very risk averse. They then ensure that the structures around each team encourage not just success, but ethical practice.
To get this sort of risk management and governance working, you need a champion. So what does that person look like?
Well they have a few qualities: governance expertise, a depth of knowledge about best current practice, the passion to do the right thing, and the influencing skills to get others on board.
Without such a person you don’t have someone who cares deeply about the structural integrity of your business. Someone who can look at the bigger picture, how all the different aspects of the business interact, and pinpoint where the current issues are and where future issues could crop up. A compliance champion would have made a world of difference to the financial institutions caught up in the Royal Banking Commission. Who knows, perhaps Snowden – with his sense of ethics and desire to change things – might have made a capable governance champion.
Just as no organisational value should ever be just nice words displayed on the company website, risk management and governance can’t just be boxes you tick when talking to the board. They influence culture, and culture influences them. As guardians of workplace culture, and key culture consultants to the wider executive team, HR professionals play a key role in either being a compliance champion or making sure the organisation has one.
Nominate your champion
If your company is lacking a dedicated governance specialist, don’t worry – a CEO, HR manager, emerging leader or company secretary can take on the role.
Getting them up to speed doesn’t have to be an arduous task. In fact, we’ve made it easy. At the Governance Institute, we offer short, half-day courses designed to leave you with practical knowledge and skills that can be immediately applied in your workplace.
If you have rudimentary knowledge in this space, we can start by covering the basics, such as useful governance frameworks, meeting ASIC requirements, information around disclosure requirements and tools for strategic risk management.
If you’re a professional with intermediate skills, you can start at a more advanced level. We offer courses designed to update your knowledge, giving you the confidence to influence key stakeholders and help you understand how your company’s risk and governance practices can be improved.
You can even have a whole team undergo governance training from your own workplace. The Governance Institute’s in-house training options allow you to make the most of our expert advice and align it with your organisation – everything is tailored to your needs.