Getting Value from Compliance

I read through the draft of the King 3 Corporate Governance code recently to contribute my comments. (See IODSA). What was mentioned (in my own words) was the large cost of "forced" compliance incurred relative to the initial events that triggered it, and I refer here to the Enron/SOX relate issues.

There is little mention of a value added approach to compliance, instead of compliance for the sake of it. I would rather advocate a semi marketing approach to implementation i.e. look for ways of improving competitive advantage for your organisation, making you slicker, more innovative, more responsive and more profitable. I think that it was Sir Adrian Cadbury who intimated that good governance is good business, although I suspect that this had more to do with the higher share premium than the effectiveness of management.

If you follow the apply or explain principle,

• then involve your colleagues in the process
• define what the positive result will be or how it can be achieved
• look for the sweet spots how it can contribute to competitive advantage
• don't do it if there is no real justification for it in terms of the above
• Obviously, don't be stupid and ignore the risks in the process or the spirit of compliance in the first place
• Remember your duty of care as a CIO to sustainability, you shareholders and stakeholders
• Turn compliance into an investment, not a cost