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Governance professionals’ role in helping address regulatory compliance, ESG and technology governance.
Ernst & Young Advisory Services Limited (EY) together with The Hong Kong Chartered Governance Institute (HKCGI) and Corporate Secretaries International Associations Limited (CSIA) based on a survey of over 1,700 governance professionals globally, published a report on the governance professionals’ roles in today’s dynamically changing risk environment.
The report highlighted the emerging trend, elevated by the COVID-19 pandemic and other global business disruptions. In this fast-paced current environment, governance professionals face the daunting task of ensuring that the Board continues to be equipped with the right tools to address the risks and opportunities that disruptive global events pose to their organizations.
The report delves specifically into the risks brought on by regulatory governance, ESG and technology governance:
Survey question: What risk reporting approach is adopted within your organizations?
The survey reveals that governance professionals are working hard on compliance related matters, whereas the Board are hoping to spend more time on strategy and scenario planning and less time on traditional risk and compliance.
Adoption of differentiated and risk-based governance model would allow governance professionals to guide the Board in navigating the changing compliance and governance landscape.
Survey question: Please indicate if you are involved in any of the following areas for ESG risk management?
The survey indicates that there is still room for governance professionals worldwide to play a bigger role in ESG risk management activities.
Through creating a sense of purpose and setting the tone at the top for driving ESG focus and practices, a solid foundation can often be reinforced for ensuring Board oversight, proactive management and facilitating ongoing dialogue on ESG topics across the organization.
Survey question: Do you play a role in technology governance risk management activities?
The survey results show that only a small percentage of respondents play a role in technology governance. Today, it would be challenging for a business to thrive in this fast-paced current environment without the effective use of information technology. As trusted advisers to the Board, governance professionals are in a perfect position to drive and embrace all aspects of technology issues as a holistic Board-level business risk.
Governance professionals are in a unique position to support and assist the Board in overseeing high-risk issues within their organizations, including regulatory management, ESG and technology governance. The future DNA of governance professionals should be embedded with the ability to proactively respond to changes.
Recognizing that changes may lead to risks as well as opportunities, governance professionals are expected to be able to help their organizations to establish an effective system for identifying risks and opportunities, to manage the risks as well as to explore the opportunities. By entrenching these activities in their role, governance professionals would further elevate their position as trusted, strategic advisers to the Board and proactive key members of the organizations.
Consulting - Enterprise Risk Lead for Hong Kong and Macau, Ernst & Young Advisory Services Limited
Consulting Partner. Partners with the Risk Management leader community in advancing a transformation agenda. Promotes governance and risk awareness in both the public and business sectors.
