Corporate Governance: An evolving creature during crisis

The COVID-19 pandemic continues to stretch institutions’ thoughts and outlooks of what business as usual is. There are two components that will be under even more scrutiny – Business Continuity Plans (‘BCPs’) and corporate governance structures - some scrutiny will be unjustified. There can never be a complete plan for every crisis. However, there will be warranted discussions. Boards, partnerships, and entrepreneurial leadership will all come into question as shareholders, employees and the public assess their actions – fairly or not.

As I conclude this series of BCPs, it must be unequivocally expressed that business continuity planning is a direct reflection of good corporate governance. It is widely known that although there is no standard definition of corporate governance, the common theme embodied by various models speak to mechanisms used to direct, control and manage an institution’s human and financial assets.

An institution’s governance structure, if built correctly, should systematically highlight deficiencies and successes in your BCP, track remediation efforts and ensure all actions are documented, stored and accessible to stakeholders. Corporate governance is applicable to any organization – public, private, public private partnership, etc.

For supervised financial institutions (SFIs) and other regulated entities, a combination of governance, risk and compliance (GRC) is paramount to addressing fundamental issues, risks and strategies within the confines of the law. With or without the COVID-19 pandemic, leadership should consistently be assessing, adapting and acting. Furthermore, you should be communicating and documenting conversation with your respective regulator.

Additionally, there are three areas leadership and management should consider as you demonstrate good corporate governance:

1.     Reevaluate Corporate Structure – Determine the viability of your current structure and its ability to effectively navigate and provide oversight during and after COVID-19

2.     Reinforce Regulatory Compliance – Ensure requirements are identified and tracked while documenting any extensions. Ensure both horizontal communication and vertical reporting is enhanced and followed.

3.     Re-engage Human Capital – Managing human capital communication, movement and engagement. People will ensure your business continuity plans are effective and adapt as they will be responsible for the strategic and operations decisions.

In conclusion, business continuity plans once robustly developed, strategically implemented and consistently monitored by a well-structured corporate governance regime would greatly assist through crisis such as COVID-19 and other business disruption scenarios.