Improving Governance and
Regulatory Compliance

After some stunning business collapses earlier this decade and the recent government rescuing of failed financial institutions, the investor class is starting to rethink their methods and models for valuing businesses.   While much intrinsic value is still placed on meeting performance expectations, there is greater interest in corporate governance and business ethics practices amongst stakeholders.

Investors are placing a premium on businesses that are well-managed, creating competitive advantages for companies that operate with integrity in addition to generating pure financial results.  But, the shift to balancing performance expectations with sound governance practices is not easy. It creates real challenges not only for corporate officers, but for regulators, analyst, investors and other stakeholders.

 A new focus on management accountability, not just from the growing regulatory environment, but also from the demands of a larger and more knowledgeable investor class, have caused board members to insist that sound governance and compliance tools are in place and operating effectively. Protecting the organization’s reputation and market value is of greatest concern to board members today.

Meanwhile, as the response to this dilemma becomes more and more request for information, management struggles to comply given their understanding of  the total cost of compliance.  They believe the costs will continue to grow without the associated benefits.   The mandate for relevant and timely information corresponds with the demand for transparency, as well as the requirement to provide accurate and frequent reporting of results, issues and  events.   The bottom line of improving Governance and Regulatory Compliance is that companies will be rewarded for their achievements as well as their reputation for being well managed.

• Recommendations to improve governance and compliance programs:
• Risk and compliance efforts need to migrate from compliance-based island solutions to strategic risk frameworks
• Generating value in managing risks requires understanding their sources, impacts, and, interrelationships while linking the risks to specific tasks
• Risk owners must be established to achieve effective risk management
• A comprehensive methodology that includes communication of strategy and goals must be defined to implement enterprise risk management 
• Implementing an enterprise wide risk management framework based on a technology platform and a strategic ERP System (e.g. SAP) can help optimize business performance and is justifiable based on a rigorous cost benefit analysis.

• Streamlining the Sarbanes-Oxley 404 requirements
• Adopting new accounting standards such as IFRS
• Promoting good governance throughout the organization
• Implementing solutions that generate sustainable and long lasting benefits
• Creating processes to address compliance and policy breaches
• Driving value through innovation and  cost effective approaches
• Improving the transparency of  financial reporting