by Shuaib Jooman, Governance & Board Advisory Lead at GRIPP Advisory
Good governance is beneficial to the stakeholder community through the creation and enhancement of sustainable shared value.
SOUND GOVERNANCE practices build trust, inspire confidence, and advocate an organisation as being a responsible corporate citizen. Research suggests that investors are willing to pay a premium for a well governed organisation. Moreover, good governance is inextricably linked to good performance, therefore making it a critical success factor. An organisation’s governance processes should extend beyond mere siloed “tick-boxing” and pivot focus to an outcomes-based approach.
With the recent spate of governance failures coupled with the impact of Covid-19, stakeholders are demanding greater transparency, accountability, fairness, and inclusivity from organisations. This is amplified in the context of other fundamental and structural changes
within the business environment. These changes are centred around themes such as globalisation, climate change, disruptive technologies, and social, political, and geographical complexities, amongst others. As such, organisations are identifying innovative ways of staying competitive and remaining relevant.
The proliferation of Covid-19 is ubiquitous and spread effortlessly across the globe wreaking havoc by creating uncertainty in geographies, their economies and markets, as well as causing panic throughout civil societies. Africa has not been spared and select industries were and still are disproportionality affected. Gaming operators are still reeling from the impact of lockdown measures which included;
inter alia, travel bans, social distancing on the gaming floor, curfews, supply chain disruptions, reduced disposable income, limitations on numbers at gatherings, and prohibition on the sale of alcohol. This
led to significant operational losses and stringent cost cutting measures within the gaming sector.
This, on the back of already anaemic economies on the African continent, has and continues to have dire consequences for organisations large and small alike, with ripple effects and unintended consequences experienced throughout economies and its actors.
Could the pandemic be termed a Black Swan event? In his book titled The Black Swan: The Impact of the Highly Improbable, Nassim Taleb postulates that such an event has the three attributes. “First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility.
Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.”
The very difficult question that seems to be propping up time and time again is “Were organisations adequately prepared, resilient and agile enough to respond to the
challenges that the virus has brought?” The short answer is no.
Ben Okri, in his essays, opines “Nature and history are not just about the survival of the fittest, but also about the survival of the wisest, the most adaptive and the most aware.”
This piece aims at providing certain topics, touch points and questions on what the governing body and senior management teams should be focusing their attention on during such a time. Some of these have been set out below.
need to be transformed. There has been significant uptake from consumers in adopting technology to fulfil their requirements; from online shopping to exercise routines and medical consultations. Similar conversations are required within the gaming industry around how to better leverage the efficiencies of technology to keep and increase the customer base.
Health and safety of employees
should be a primary concern. Employees should be fully informed about the risks
of Covid-19 and measures that need to be taken to mitigate infection and equally important the spread thereof. Is there a health and safety committee championing the process? Is communication to all staff relevant and timeous. Who do employees turn to for assistance? Has the organisation provided employees with the means to mitigate potential infection?
Business continuity and disaster recovery plans
have been put to the test. These documents should articulate processes that need to be activated during crises. Have all considerations, risks and scenarios affecting the organisation and
its material stakeholders been taken into account? Are these documents fluid and updated as and when new information becomes available following an agreed governance process and framework? Is IT infrastructure sufficiently robust and secure to enable employees to work remotely? How will employees continue to work remotely and engage with clients and suppliers.
Financial planning and cashflow
is a key focus area. Organisations have experienced significant pressure on their cash flow levels. A fine balancing act is required to meet working capital requirements with effective planning and matching of current assets to current liabilities. Options could include postponing CAPEX, seeking various financing options, cost cutting measures and restructuring, enhanced debtors and creditors management, diversifying revenue streams and applying for government support.
through improved workforce management and improved efficiency as well as outsourcing of non-core functions.
Understanding the risk universe, conducting risk assessments, and reviewing risk registers should be prioritised to ensure that the organisation is equipped
to handle exposure. Should risk be mitigated, accepted, or transferred? Is
the organization’s insurance coverage adequate or does it need to be reviewed and assessed?
and brainstorming various possibilities and probabilities that could play out within the short, medium and long term. What are the actions necessary for the governing body and senior management? Do each of these scenarios have action plans coupled with timelines and key responsible individuals.
Increase in fraud, corruption and theft
owing to lack of perceived oversight. Nefarious criminals and employees are always on the lookout for ways to gain
from such situations. Covid-19 creates new opportunities for these individuals to exploit the vulnerable. Organisational internal controls may be lacking due to attention been focussed on more pressing matters.
and policies ensures that organisations continue throughout and after this pandemic.
Have key individuals and positions been identified with possible successors should they become ill or leave the employ of the organisation.
and transparency is pivotal. Material stakeholders should be kept informed through various communication platforms.
There are many lessons to be learnt from the pandemic. With the rollout of the various vaccines, markets have started to experience some buoyancy.
There is talk within certain circles that online gaming be an agenda point at governing body level, together with conversations around its feasibility and uptake from traditional brick-and-mortar operators. Seemingly, the gaming industry on the African continent has been
lagging on this front. Should blame be apportioned to Covid-19 or complacency? There are regulatory hurdles that need
to be overcome but these are not insurmountable. The African continent does however require the infrastructure and favourable regulation to make this a success.
ABOUT THE AUTHOR
Shuaib is the Governance and Board Advisory Lead at GRIPP Advisory (Pty) Limited, domiciled in Johannesburg South Africa. He has over 12 years’ experience in delivering successful internal audit, risk, compliance, governance, and board advisory engagements across industries such as financial services, logistics, mining, retail, gaming, hospitality, manufacturing and media. He has consulted both locally and internationally in both the private and public sectors. His key focus areas include organisational governance design in line with regulation and leading practice, the development of professional knowledge for the governing body and executive management, crafting governance frameworks and ancillary documentation, governing body assessments, governance code diagnostic reviews and benchmarking, and disclosure and reporting.
Shuaib completed his MBA at Wits Business School with electives including private equity, asset management and portfolio formation, and behavioural economics. His research focused on the influence of artificial intelligence on the future of the internal auditing profession in Southern Africa. He has recently been appointed as a committee member at the Institute of Internal Auditors (South Africa) for the Johannesburg region. Feel free to connect with him through the contact details below, to see how GRIPP Advisory can add value to your organisation.
Email: email@example.com Contact number: +27 833418600