Muhammad Talha Kazi | Secretariat Division
The King IV Report on Corporate Governance recognizes all entities as integral parts of the broader society and defines governance as the exercise of ethical and effective leadership by the governing body towards the achievement of defined outcomes, being that of creating an ethical culture, ensuring good performance, maintaining effective control, and ensuring legitimacy in the eyes of all key stakeholders.
As most businesses and organisations face the adverse impacts of this pandemic, it is vitally important that these governance outcomes are not neglected. This article will highlight five key pillars along with some key considerations derived from the King IV Report that the Governing Body should consider in order to ensure the effective application of good governance principles during these challenging times:
- 1. Ethical leadership
- The governing body should lead appropriately from the top in responding to the pandemic and should keep a written record or minutes of its important decisions in these times, especially where they could have an impact on stakeholders such as staff, customers and suppliers.
- Consider innovative ways in which employees, customers, suppliers and the broader community are engaged and ways in which support can be provided to these stakeholders during these times.
- 2. People Management
- Ensuring that the health and safety of all employees, as well as customers are prioritised.
- Embracing technology and ensuring that an appropriate succession plan is in place for governing body members, management and others affected by the crisis.
- 3. Risk Management & Opportunity
- Ensuring that there is an appropriate understanding regarding the impact of, and the inherent risks associated with the Covid-19 pandemic on the business and how these risks may be addressed.
- Assessing opportunities for growth, adaption or diversification arising out of the pandemic and planning accordingly.
- 4. Communication with stakeholders of the business
- Communication from the governing body to stakeholders needs to be timeous and transparent if it is to be effective.
- Does the governing body have an approved communication policy and perhaps
- 5. Strategy review
- Key and critical post-lockdown actions are to be identified.
- The governing body should critically assess how to mitigate future risks, including learnings from the national lockdown that could be implemented and adopted as new ways of working.
It must be noted that this article has sought to draw attention to specific areas of focus within the broader King IV Report that may require further attention during these challenging times in order to assist a business or organisation to navigate the current environment, and to adapt to a post-Covid 19 environment.