The ability to maintain a balance between monitoring management and providing wise counsel and direction to the CEO to best add value to the corporation for the benefit of shareholders is more easily said than done. We can also add the right information, protocols, and focus; boards are positioned to do what’s needed for their companies to succeed to the series of required buzzwords.

President Barack Obama’s Chief of Staff Rahm Emanuel said that the current crisis was too costly to be wasted. As we look, the recent failures, financial institutions are either defunct or brought to their knees, in spite of heavy governmental subsidies. Shareholders and others are therefore raising the GRC bar in terms of the competence and quality of the board and management. The raised bar will enable them to improve concentration on the shifting economic landscape thru the new GRC strategies.

Convergence to best practices is no longer enough. The global credit and financial crisis has clearly indicated that a new and revised international Corporate Governance, Risk Management and Compliance (GRC) order has to be implemented by almost all enterprises. In these turbulent times, emotions sometimes run high as survival is suddenly the order of the day, distorting the strategies and perspectives.

In that light it is therefore alarming that so few companies have taken a complete overhaul of their GRC practices and instead act as if it is Business as Usual. One of the major reasons for overhaul is that GRC works and functions throughout the enterprise continue to be performed in silos. The GRC integration is often not understood and accepted throughout the enterprise because it is quite complicated.

In certain enterprises the Board has come to an understanding that the economic changes that have occurred are structural (not cyclical), that Risk Management is systemic and incomplete if it is thinly spread out and that Compliance activities will increase in the years to come.

These changes in GRC will affect every company in every sector across the world. Therefore there is a need for a true and total GRC transformation depending on the gravity of the situation in the enterprise.

Another reason for the transformation is the continual loss of trust in the world’s financial systems, corporations and institutions. A transformation that once again focuses on the responsibilities that company boards are the forerunners of the effort to win back the confidence of customers and investors and all stakeholders alike. Good governance and leadership will help rebuild confidence in our business systems, providing a stable framework for sustainable growth. Therefore a well-balanced and competent board continues to be critical to provide the effective strategic direction.

What each enterprise has to define and determine is: What are the core objectives of good corporate governance that can be achieved from the organization’s perspective.

The continued number of major corporate scandals of the past decade has led to increased scrutiny of corporate integrity, ethics and accountability. Surely the element of Corporate Governance was missing which now requires higher expectations for corporate governance practices in the coming decennium.

Therefore the first questions the boards must ask themselves are:What are the most significant GRC practices that have emerged in recent years, do we comply and what is our plan of action if we don’t?

Starting from a helicopter perspective, the Board should focus on those good corporate governance elements for each of the coming years and support and provide effective advice, counsel, and sometimes even direction to the CEO and senior management team. Adequate measures are taken to ensure that the board is capable and ascertain that it has the knowledge and data to carry out the required monitoring activities.

Stakeholders all over the world, perhaps with the exception of a handful of countries ask the following questions, whether the board of directors do their job in carrying out their responsibilities

• Did the boards understand the risks their organizations were taking?
• Did the board carry out its key board responsibility to oversee what management is doing to identify, analyze, and manage risk?
• Was there any alignment to the agreed exposure and the company’s risk appetite?