As organizations are becoming more and more global, their need for and the importance of Corporate Governance (“CG”) is increasing.
At Schema we believe the first step in implementing effective CG, before affecting any changes or making improvements, is to assess the organization’s current status in line with international practices and relevant regulations.
In our assessment we normally assess organizations against the OECD principles and provide recommendations for improvement and for how such improvements can reap increased impact and value to the business.
There are several approaches to undertake a CG assessment; however, our most frequently requested and followed assessment model is that developed by the International Finance Corporate (IFC). This model assesses the CG within an organization through addressing six components as follows:
Commitment to Good Corporate Governance:
The demonstration of a clear focus on effective structures and processes for achieving the benefits of good corporate governance.
Board Structure & Functioning:
The existence of a competent, legitimate, well-structured and effective board, including recommendations related to the composition, structure, and work procedures of the board.
Control Environment & Processes:
The presence of an environment facilitating the achievement of organizational objectives; management of risk; and the integrity of assets and financial information.
Disclosure & Transparency:
The easy availability of timely, accurate, relevant, complete, and actionable information equally to shareholders and, as appropriate, to other stakeholders, including regulators.
The equal treatment of all shareholders, including protection from abuse from company insiders.
The existence of appropriate mechanisms to help govern the involvement of the family in the business and address other family matters.
This is a very efficient, successful and valuable model to assess CG.
The value of undertaking such an assessment is in the benchmarking of the organization against global best practices and in realizing what its shortcomings are with respect to CG in reference to the global market and its expectation; an expertise that Schema‘s team have a proven track record for high achievement and effective results.