Good governance in grass roots | Image: International Sport and Culture Association
New research reveals 88% believe governance to be a key priority in their company, yet just 40% believe firms should face strict financial penalties if they do not comply.
New research with governance professionals has illustrated the changing nature of governance roles, with 53% saying they now face greater complexity in their work and 61% that they face increased workload.
The study, conducted by online board portal provider eShare, also revealed that 88% of respondents say that good governance is a key priority in their organisation, and that 79% believe that governance is well resourced in their organisation. However, when it came to how organisations should be penalised for bad governance, just 40% say that companies with bad governance should face extreme financial penalties.
“Good governance is hugely important in modern business, but for it to work there has to be accountability amongst those at the highest level of an organisation,” said Alister Esam, CEO of eShare. “To really tighten up on governance there has to be an incentive for boards to be more accountable. Whether that’s a fine big enough for a corporation to actually notice, or for individual board members to be held responsible when things do go wrong, punishment must be increased for bad corporate behaviour.”
Half of the research respondents say that they are better positioned than ever to meet compliance targets, while 8 in 10 say that to be cited for poor governance would be a disaster for their organisation. The last few years have seen an increased focus on firms found guilty of poor governance, with one of the most high-profile cases being the Volkswagen scandal of 2015, which saw significant financial penalties for the car manufacturer.