Regulation and changed expectations could hamper governance
Company secretaries and other governance professionals are concerned about extensive regulation and worry that changing public expectations could affect the future development of governance, according to a new survey conducted by ICSA: The Governance Institute in the UK.
Indeed, 42 per cent of the over 400 governance experts polled expected insufficient time and resources to deal with the volume of applicable regulation to be the biggest obstacle to effective internal oversight in the next 10-15 years. This was almost twice the number that selected the next most popular option: growth in the size, complexity and global reach of organisations.
In addition, 87 per cent believed that overlapping or conflicting regulatory frameworks were a feature of globalisation that could affect governance in the future.
The study, which included both focus groups and a survey, also compared the perspectives of generation Y/Z (aged 18–35) with established practitioners (aged 56–65).
Interestingly, regulators came out on top as the most influential external party in the eyes of generation Y/Z, whereas established practitioners saw owners, investors and funders as holding the most sway.
The survey, titled Next Generation Governance, also found that generation Y/Z attached greater urgency and importance to technological change, environmental sustainability and financial inequality as sources of future governance challenges than did their more established counterparts.
When thinking about how to safeguard the quality of governance, the focus of company secretaries across all age demographics remained on the core elements of procedures and controls, stakeholder engagement and communication. Survey respondents viewed these as the bedrock of high-quality governance.
‘The challenge for governance professionals going forward will be to proactively ensure that procedures and controls go far enough – covering how decision-making, authority and accountability are exercised in relation to issues that might once have been considered outside the traditional remit of governance for that type of organisation,’ the report observes.
Participants in ICSA’s focus groups defined the role of the company secretary as ‘the conscience of the company’.
The good news was that many felt empowered to shape the governance agenda in their organisations. Respondents said there were a variety of ways in which company secretaries exercise influence. These ranged from having a granular effect on behaviour and decision-making right across the organisation by drafting policies, formulating meeting agendas and conducting training, to relational bridge-building as a result of being part of the senior management team and providing support and advice to the organisation’s leaders.