No system of governance can fully protect companies and investors from their own mistakes. At KPMG, we can, however, assist you in reviewing your governance needs within the board, minimising potential boardroom lapses — whether strategy, performance or oversight — through a rigorous process of assessing its existing governance practices and to build consensus around bringing desired changes to fruition. Drawing on many decades of working with boards and C-level executives, our board advisory consultants help boards understand their corporate governance responsibilities and their effectiveness in discharging them.
The establishment of a robust governance framework requires the board to balance their attention on monitoring executive activity (conformance) and contributing to the development of strategy (performance).
While the conformance dimension of governance is a relatively easy concept that has been well understood by many; the performance dimension is more abstract and subjective which may not be easily assessed with a regime of standards, rules and regulations. Unlike the conformance dimension which focuses on value preservation, the performance dimension focuses on strategies and value creation. The two dimensions of the governance framework, performance and conformance, should be appropriately balanced.KPMG has identified four pillars which the Boards can focus on to discharge its responsibilities and accountabilities to the various stakeholders. These pillars are Leadership and Strategy and Performance Monitoring and Evaluation (Performance) and Audit and Accountability and Communication with Stakeholders (Conformance).
KPMG's service offerings are tailored to meet your needs according to each of the four pillars of corporate governance. The next page sets forth how KPMG can help you address the challenges underpinning each of the four pillars through our various service offerings.
A very common misconception is that corporate governance is about the conduct and actions at the board level. However, the best governed companies are the ones that have successfully operationalised governance across the organisation by designing and operating effective processes for deployment of strategy, monitoring progress and reporting. KPMG's corporate governance framework is representative of the school of thought that governance is effective only when operationalised effectively as illustrated below: