This week we chatted with Robert L. Ford, MA FCIS TEP, an international corporate governance and business excellence senior executive based in Dubai. We asked him a few questions on how the role of governance professionals has evolved and how technology can help them.
Please tell us about yourself.
I’m the Executive Director of Governance Gurus, a corporate governance advisory and corporate training company based in the United Arab Emirates. Governance Gurus is a tuition partner for ICSA - The Governance Institute and partner with Hawkamah - The Institute for Corporate Governance to provide tuition for the ICSA Foundation Programme. My background is in advising major international clients, company directors and senior executives on corporate structuring and transformation projects whilst focusing on enhancing their corporate governance frameworks, reviewing policies and procedures and helping implement and embed good governance. As a corporate trainer I also design and facilitate an array of bespoke in-house training and advanced masterclass workshops, both regionally and internationally.
In your experience, what is the main barrier to good governance in organisations?
Having lived and worked in Dubai and across the wider Middle East region for the last 10 years I have advised a diverse range of organisations and individuals. There has been a marked advance in the regional understanding of what governance really is but more work is needed to further raise the awareness of the governance benefits to enhance business performance and long-term success. Over the last few years, companies and business leaders are starting to see the medium to long-term benefits of having good governance in place and moving away from merely complying with the minimum requirements of rules and regulations or ticking the governance box.
Many businesses talk about governance and implementing best practices, but the reality is very few organisations have the fortitude or desire to design, roll-out and embed good governance practices fully across their business so it becomes part of their corporate DNA. Quite often companies will approach lawyers or consultants to design policies, procedures or even governance manuals or handbooks for their organisation. It's important that professional service providers or organisations spend enough time to understand the business processes, systems and how people operate in practice. Otherwise you end up with technical policies and procedures and complex regulations which are not able to be understood and likely not to be followed, implemented or ultimately embedded within the business.
Good governance comes from the acceptance or acknowledgement that having rules, policies and procedures in place enables employees within organisations to understand their role, responsibilities and level of authority and empower them to operate without too much bureaucracy or delays in decision-making.
Corporate governance is now seen by some businesses as a strategic enabler for organisations of all sizes to remain relevant and sustainable but 'one size doesn't fit all'. It is mainly the forward-looking organisations who invest time and money to develop their company directors, senior executives and future leaders through continued professional development. Learning and development is one of the main pillars in enhancing good governance and embedding a corporate culture of integrity and excellence.
One key barrier to good governance internationally is that organisations spend time developing their strategy and business plan but spend very little time actively aligning the culture to embed corporate governance as the overarching framework for sustained excellence - doing the right things for the right reasons and with integrity but with an appreciation on giving back to society and multiple stakeholders, whilst considering the environment for future generations to come.
Do you see the role of the company secretary changing, focusing more broadly on strategy and corporate communications, rather than just internal administration?
The role of the company secretary has significantly changed over the last 5 - 10 years. ICSA has acknowledged this and developed the Chartered Governance Professional qualification and further enhanced the existing Chartered Company Secretary qualification with a revamped syllabus to educate members on risk management, interpreting financial and accounting information, development of strategy and boardroom dynamics whilst covering company law, corporate governance and compliance.
Many company secretaries are strategic advisers to the Chairman, the board members and the senior executives. They are required to have gravitas, technical knowledge, excellent communicators at all levels and most of all operate with integrity whilst employing emotional intelligence. Regrettably this is not true of all company secretaries as some organisations do not empower them or there is a corporate culture to treat them as administrators or servants of the board only.
Company secretaries need to add value and show that they add value and provide the 'one independent view of the holistic truth' as they attend all board, committee and shareholder meetings and have access to a wealth of information that many senior executives are not privy to.
How do you think emerging technologies like AI and blockchain will impact the role of company secretaries in the future? And what would be the main barrier to adoption?
I am extremely interested in information, data and technology and firmly believe that emerging technologies like artificial intelligence, machine learning and blockchain should help people work smarter and no harder. Everything comes at a price, sometimes that is the time and cost to implement new technologies, resistance from employees to use the technology effectively or a lack of awareness of the medium to long-term benefits of embracing change to stay agile and relevant.
I have used entity management software to maintain and manage large portfolios of companies and successfully worked with board portals to collect and circulate board packs, resolutions and even board performance surveys or questionnaires. In my early career I used compliance software and databases to identify individuals’ identities, ultimate beneficial owners and to monitor transactions and news. We hear so much about FinTech, RegTech and blockchain and other technological advances.
The way companies do business has changed and in the next three to five years we will see more technological advances which will force businesses to re-evaluate the way they implement and improve governance, manage their organisational risk and monitor gaps and vulnerabilities.
I feel that organisations are lacking the leadership knowledge to help guide them through this fourth industrial revolution as there is a limited understand about technology and the risks and opportunities it brings whilst maintain the data from hacking, ransomware and misuse by employees, hackers and cybercriminals to exploit or capitalise on data and sensitive information.
What are the main types of fraud company secretaries must be more aware of today?
Strategy business objectives and corporate culture are intrinsically linked to good governance as this allows businesses to achieve their corporate objectives whilst controlling risks and acting with integrity. There is no magic elixir to instantly transform an organisation to become an ethical business which implements good governance consistently at all levels whilst balancing short, medium and long-term objectives.
Too often senior executives are rewarded or punished for mainly the financial performance of the organisation in the short-term whilst non-executive directors and most shareholders are mainly focused on shareholder value and sustainable growth and success. This has led to most of the major corporate governance failures as some senior executives look to manipulate financial performance or act mainly with short-term objectives in mind as their performance and bonuses are dependent on achieving the financial objectives. This is sometimes encouraged by the board by setting unrealistic financial targets and growth expectations and not providing the chief executive and their executive team the resources to achieve the business objective ethically.
The main areas of fraud would be misstatement of financial performance, rewarding senior executives for short-term achievements without clauses to clawbacks payments over the medium-term if targets were achieved unethically or at the expense of the long-term sustainability of the business. I also see collusion by senior executives to bypass internal controls and falsify achievements, progress of project or actual profitability versus the approved transaction or project. Unfortunately, fraud can never be fully prevented but good policies and robust systems can help minimise and detect instances of fraud as quickly as possible.
More about Rob
As one of the leading thought leaders on corporate governance, risk management and compliance, Rob regularly gives keynote speeches, moderate panels or join as an expert panel member at conferences internationally. He is facilitating masterclasses in Diversity, Corporate Governance and Business Strategy and Corporate Objects through June and July in Dubai, Malaysia, Cape Town and Oman. His next panel will be with MAICSA at their Annual Conference in Malaysia where he will talk about the future of governance and technology. You can also follow Rob on Linkedin.