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Jan 2012

Governing for performance: New directions in corporate governance

Good corporate governance remains firmly on the business agenda across the world. In economies such as the US and Europe, the key priority is to restore trust in business in the wake of the financial crisis. Elsewhere, such as in the fast-growing BRIC economies, corporate governance is recognised as a crucial factor in supporting sustainable economic and business development.

One issue that transcends different countries’ approaches to governance is the effectiveness of the governing board. Current thinking is that while there has been considerable attention on issues such as the structure of the board and its committees, there needs to be more emphasis on how well the board oversees strategy and risk as well as the appropriate behaviours required to fulfil this task effectively.

The CIMA boardroom leadership model helps organisations understand the related factors that need to be combined to achieve board effectiveness. It recognises that both behavioural and structural or process issues are important and should reinforce each other.

Particular areas of focus where organisations and their boards need to focus are:

  • strategy and risk oversight
  • boardroom behaviours
  • the relationship between the board and management.

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Corporate governance is under the spotlight as never before. In the western economies, the global financial crisis of 2007-8 continues to overshadow the economic and business agenda. A key contributing factor is a failure in corporate leadership which has led to a breakdown in public trust and calls for greater scrutiny.

CGMA report

CGMA Resources

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