Saudi FM calls Indian, Pakistani counterparts to discuss developments    Al Hilal thrash Gwangju to reach AFC Champions League Elite semi-finals    Saudi Arabia cracks down on fraudulent Hajj campaigns, urges pilgrims to use official channels    Nammos Amala Resort to open soon with Saudi-Greek designs    Saudi Arabia completes 674 Vision 2030 initiatives, achieves 93% of KPIs as ninth-year milestone marked    Literature Commission inaugurates Saudi Pavilion at Muscat Book Fair    Saudi Minister of Culture holds talks with his Costa Rican counterpart in Jeddah    Alkhorayef praises advancements in Al-Kharj food industries sector    MHRSD: 80% of recruitment offices are non-compliant with regulations    At least 50 Palestinians killed in Israeli strikes across Gaza    Teenage girl killed in French school stabbing attack    Trump claims meeting with China after Beijing denies any trade negotiations    GACA chief chairs 16th meeting of the Steering Committee on aviation's strategy    Saudi Theater Commission launches its Work and Learn Project in UK    The season has begun — and one comment shook us all    Jennifer Lopez dazzles in Jeddah with a Formula 1 performance    Saudi Arabia open to expanded 64-team World Cup in 2034, says sports minister    Average life expectancy in Saudi Arabia rises to78.8 years    Film Commission launches 'Cinema' initiative to enhance content    Famed Philippine film star Nora Aunor dies at 71    Pakistani star's Bollywood return excites fans and riles far right    Veteran Bollywood actor Manoj Kumar dies at 87    Bollywood actress vindicated over boyfriend's death after media hounding    Grand Mufti rules against posting prayers and preaching in mosques on social media    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.