What is the cost of your compliance strategy?
We now live in a highly litigious society. No leader can afford to delegate their obligations in the contracts they sign. If you are one of the signatories, you must have the time to read all the details. You are your best lawyer! The case of the major telecom company that woke up in the red by over US$ 1.671 billion shareholder value loss is a proof that compliance risks must dominate Board room Agenda. Indeed, the primary role of the Board of Directors is going concern (strategy); and oversight (risk management and compliance).
Cash to your business is like blood to your body. The costs of fines, penalties and unfavorable judgments require direct payment of cash. When it comes to your business, that cash could be the small drop of blood you need to survive. Unplanned outflow of cash could break your business especially in the short- term. As a leader, how do you ensure you stay ahead of your adversaries? How do you ensure you are 100% compliant with the applicable laws and regulations that affect your business? Are your legal advisers and experts on the top of your compliance agenda? The business and its leaders are ultimately accountable to the omissions or commissions of its staff. How much is compliance costing you in terms of worries, time and money?
As Accounting Officer or Chief Executive, knowing your stakeholders, directors, staff and other external partners – and meeting their expectations is key to your success in that role. In my role as a Board member, accounting officers that provide timely updates on the board’s role of strategy, risk management and compliance, perform better in the perspective of the Board and stakeholders. How does the executive work with and not against the Board? Keeping the board update on with useful information about the business is priceless.
Traditionally, none risk management institutions like governments are taking a strong stand on the need for establishing risk management process and systems. Government now requires all MDAs (Ministries, Directorates, and Agencies) to establish strong risk management structures across board, as we focus on becoming a middle class country by 2020.
Section 45(2) of the Public Finance Management and Accountability Act 2015 states “an Accounting Officer shall, in respect of all resources and transactions of a vote, put in place effective systems of risk management, internal control and internal audit.” This is a move in the right direction.
However, as any CEO probably knows having policies and procedures is one thing. Ensuring effective implementation is another. It requires bold leadership and some tech savviness.
Automating the risk management policies is critical for effective risk management. The GRC – Governance, Risk and Compliance solution helps automate the key business process and makes the Board’s role very easy. The Accounting Officer saves a lot of time in preparing Board papers on strategy, risk and compliance.
All you have to do is to focus on securing the system, updating it and create a username and password for each Board member and key partners. Any time they need an update, they just login and alas, everything they ever needed for clarification is in there, any time.
In this issue find out how bad loans are a threat to the future of Uganda’s banking sector and why Uganda’s corporate functions stumble. Visit summitbusiness.net and access a digital version of your favorite magazine.