Saudi Ministry of Education to showcase innovations at 2025 Geneva International Exhibition    7,523 violators of residency, labor, and border security laws deported in a week    Video contradicts Israeli army account of deadly March 23 strike on Gaza paramedics    Saudi Arabia spends over $241 million to implement de-mining projects in 3 countries    Italy's Meloni government approves controversial security decree expanding police protections and penalties    Egypt submits new Gaza ceasefire and prisoner exchange proposal: Report    'Everything is possible' — Ronaldo focused on titles, not 1,000-goal milestone after Riyadh Derby win    Saudi, US military leaders discuss enhanced defense cooperation in Riyadh    King Salman Global Academy for Arabic Language launches program with Indiana University    Ronaldo brace powers Al Nassr past Al Hilal in Riyadh derby thriller    Ed Sheeran weaves Persian music into new song, Azizam    Al-Jadaan: Crown Prince's directives confirm government's ability to bring back balance to real estate market    Veteran Bollywood actor Manoj Kumar dies at 87    Foreign investors are allowed to engage in real estate business outside Makkah and Madinah Commercial speculation should not be the purpose of real estate transaction    Aubameyang fires Al Qadsiah into King's Cup final with stoppage-time winner over Al Raed    Musk's X is suing India, as Tesla and Starlink plan entry    Tesla sales plunge after backlash against Elon Musk    Danilo Pereira fires Al Ittihad into King's Cup final with dramatic stoppage-time double    Screen time in bed linked to insomnia, study finds    Mexico bans junk food in schools to fight childhood obesity epidemic    Sweet sales surge ahead of Eid as Saudi chocolate imports top 123 million kg in 2024    Bollywood actress vindicated over boyfriend's death after media hounding    Grand Mufti rules against posting prayers and preaching in mosques on social media    King Salman prays for peace and stability for Palestinians in Ramadan message King reaffirms Saudi Arabia's commitment to serving the Two Holy Mosques and pilgrims    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



New corporate governance approach vital in today's business world: ICAEW
Published in The Saudi Gazette on 29 - 04 - 2015

JEDDAH — The Institute of Chartered Accountants in England and Wales (ICAEW) has called on organizations to improve corporate governance policies and practices in order to tackle the challenges of today's business environment. In a speech this week to the Dubai Global Convention on Leadership for Business Excellence and Innovation, the Institute's Deputy President Andrew Ratcliffe expressed to government officials and business leaders that companies should rethink how they behave if they want long-term success.
Organized by the Institute of Directors India, the Dubai Global Convention brought together eminent thinkers, business leaders, policy-makers and academics from around the world to discuss how 21st century organizations should develop through innovation, creativity and excellence.
ICAEW said questioning the established wisdom on corporate governance is vital for any discussion on how businesses should operate today.
“Existing models, which have boards of listed companies acting as agents of absent equity owners, are now being challenged by the changing nature of today's capital markets. We need to think differently about how we approach corporate governance,” said Ratcliffe.
This challenge is the focus of a new ICAEW project in which the fundamentals of corporate governance are being examined by a group of practitioners, experts and academics. So far the group has been addressing five big questions, which were discussed at the convention, to wit:
1. When is ‘comply or explain' the right approach?
‘Comply or explain' (where companies either follow guidelines or explain why they do not need to) can bind companies to the principles of a corporate governance code while allowing them to depart from specific provisions. ICAEW believes it promotes innovation, proportionality, substance over form and long-term learning. However, it depends on shared values of good governance and supportive institutional arrangements. When these are lacking and comply or explain does not work as intended, the situation may call for alternatives, including regulatory intervention.
2. Who should be covered by codes?
Everyone involved in corporate governance should be covered by a code that sets a framework for their involvement. This framework code should provide a context for developing other, supporting, codes. These can set expectations for the behavior of groups whose actions are fundamental to good corporate governance.
According to Ratcliffe, this combination of framework and supporting codes will allow the development of group-specific codes without those codes creating confusion and complexity. It would enhance the shared beliefs and institutional arrangements on which principles-based codes depend. It would also enable people outside the system to hold those inside to account and will highlight the importance of shared responsibility for governance outcomes.
3. What should companies be responsible for?
In light of challenges highlighted since the onset of the global financial crisis, a company that is sensitive to the full range of its responsibilities can be more agile in adapting to the environments where it does business. It should be better at anticipating and even eliminating potential expectation gaps. Addressing the full range of responsibilities will also provide companies with a solid foundation for building and maintaining trust, while also allowing legislators and regulators to focus on developing laws relevant and proportionate to specific needs.
4. How diverse should boards be?
Corporate governance thinking has historically focused on the need for an appropriate balance between executive and non-executives and to ensure that boards have the skills, experience, independence and knowledge of the business to enable them to operate effectively. However, increasingly both companies and society are starting to look at how diverse a board should be in order to get away from the dangers of ‘groupthink'. Boards operate best when their members do not all look the same.
5. What are the overarching principles of corporate governance?
ICAEW proposes principles of leadership, capability, accountability, sustainability and integrity. These serve to remind boards and their stakeholders what corporate governance should look like if a company is to achieve its business purpose and fundamental responsibilities. The overarching principles should also help companies and regulators respond to new challenges and maintain stakeholder confidence in business.
ICAEW is currently working on setting out key principles to support its corporate governance research, and has called for more participation from the global business community via its website - icaew.com/newchallenges. — SG


Clic here to read the story from its source.