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​3 ways that Sysmax delivers on corporate governance

​3 ways that Sysmax delivers on corporate governance

6th Apr 2021

Let's face it, there have been some big corporate failures in the 21st century. Lack of accountability of senior management to shareholders, sometimes layered with accounting fraud, has meant that investing in a company can be fraught with uncertainty. From Enron in 2001, to the big beasts of the financial crisis in 2008 and Carillion in 2018, corporate governance practices of modern corporations have been in the spotlight. Various jurisdictions introduced legislation along the lines of the Sarbanes–Oxley Act in 2002, a U.S. federal law intended to improve corporate governance in the United States. Concerns such as meeting regulatory requirements and getting the balance right between various company stakeholders have never been more important. And in the current economic crisis caused by the pandemic, it’s all the more important to make sure that decision making is robust and joined up. Our latest blog looks at three areas where Sysmax can help optimise corporate governance in your company.

Corporate governance overview

Corporate governance is the system of rules, practices and processes which direct and control a company. It's necessary because of the possibility of conflicts of interests between stakeholders. Primarily, this potential conflict is between shareholders and senior management. But it's also important to strike a balance between employees, suppliers, customers and the community. Identifying who has power and accountability, and who makes decisions, provides a toolkit to deal more effectively with the challenges of running a company.

Governance at a corporate level includes the processes that help to set a company’s objectives in the context of the social, regulatory and market environment. It's concerned with practices and procedures for trying to make sure that a company is run in such a way that it meets its objectives, while ensuring that stakeholders can have confidence that their trust in that company is well founded.

Here at Sysmax, we can help to achieve a systematic approach to governance excellence. Not only does this improve the quality of decision-makings made by those who manage businesses. It also enables them to create long-term shareholder value more effectively - as well as putting shareholders' minds at rest that the company is being well looked after.

Optimising corporate governance 1: Regular checks on board processes

As part of the continual cycle of improvement when it comes to risk mitigation and governance, companies need to regularly review their board's administrative and record-keeping processes. Board decisions are essential to set the corporations' objectives, pursued in the context of the social, regulatory and market environment. These include monitoring the actions, policies, practices, and decisions of corporations, their agents, and affected stakeholders. Sysmax products are ideally suited to providing that level of insight.

Optimising corporate governance 2: Board structure, diversity, and experience

It's important to appoint board members on the basis of their level of experience and competence, within an appropriate structure for the board. And to avoid the pitfalls of group think and to provide adequate challenge to senior executives, a diversity of outlook and experience will make for a better board. Within the board, there should be a mix of personal attributes that enable members to fulfil their roles. All directors must be appointed on merit, through a fair and transparent selection process, regular assessments and recording of each member’s skills. What better than the Sysmax suite of products to achieve this.

Optimising corporate governance 3: Executive remuneration that matches competence

A key consideration for any business is to ensure that they have appropriate controls around executive remuneration. You've got to be employing the right people and nurturing them to feel adequately rewarded for their efforts, both in terms of financial compensation and professional recognition. There must be mechanisms in place to assess performance against required key performance indicators. And the remuneration structure must provide the right incentives around risk-taking within the company's particular context. By regularly assessing competence and compliance with Sysmax, companies can better align remuneration to their shareholders’ interests.

To find out more about how Sysmax products can help companies to meet responsibilities for corporate governance and give shareholders peace of mind, contact one of the team today.

Post by Peter McAteer

Peter is the founder and CEO of Sysmax, a market-leader in the areas of compliance, performance improvement and competency management. He has more than 35 years’ experience working with global leaders in high-risk industries such and oil and gas extraction. Peter’s focus is on driving performance improvement though analysis of business compliance and staff competency, including risk analysis, high technology engineering and value optimisation. He works with clients to ensure they make the most of the opportunities inherent with the Sysmax suite of products.