The global economic crisis has imposed higher risks and challenges for board governance.
Boards of technology companies have significant challenges. Often times they have incomplete management teams, inexperienced founders, lack of resources and more. In the TechAssure Association annual risk report, we cite that global regulations also impact the effectiveness of board governance.
During the second set of meetings during the Global Strategic Leadership Forum in Atlanta, the World Affairs Council stated that contemporary global companies face more intense governance issues than ever before. Their determinations have led to discussion on how globalization has called on companies to re-examine their risk management strategy in order to successfully adapt to the complicated matrix of the regulatory environment.
The World Affairs Council stresses the fact that the board should re-evaluate governance strategies to include not only profitability and growth, but escalating risks due to the overly complicated regulatory processes they face in the U.S. and other sovereign nations. Unfortunately, government intervention in company dealings can come suddenly and unexpectedly. Rules and regulations across the globe can be conflicting which makes the governance of an international board even more complex; diluting the potency of solid governance strategy.
Regulatory laws such as the Foreign Corrupt Practices Act, the UK’s United Kingdom Bribery Law, and the Dodd-Frank Legislation have had a major impact on internationalized business board governance. Conflicting global legislation can have major consequences for international technology companies. Even if an infraction occurs in a small jurisdiction and is committed by one employee, the board must be informed so that they may take action to avoid catastrophic damage to a firm’s finances and reputation.
These regulations have increased risks to firms to the technology industry. A strong board which implements a versatile board governance strategy is the only way in which a company in today’s market can survive and flourish globally. Consistent risk audits must be performed regularly and CEOs and board members must remain vigilant; reassessing strategies and making adjustments which correspond with audit results.
Board members and officers are faced with increasing personal risk in an ever changing global regulatory environment. Working with a TechAssure Association member can help your board stay protected and help your firm develop a broad global risk management strategy in a rapidly changing world. Please contact us for more information.