Recently, since the SECs draft policy framework on Related Party Transactions (RPT) alll Boards have been focussing their efforts on reducing the impact or else to totally eliminate the framework! To many companies the rules mean that the benefit of having ” non arms length” transactions with listed companies will be lost. Manipulations and syphoning money from listed companies are threatened by this new framework (needless to say that this does not apply to certain well managed corporates. Be that as it may, Risk management and corporate culture — are also two of the areas that need to be focused on by boards to help reverse the frightening trend that has manifested itself recently. Additionally, implementation of strategy should be monitored by boards, along with the performance indicators that should be aligned with the strategy.
Regulators should focus on changes to corporate governance practices to enhance board transparency, increase director accountability, and give greater voice to shareholders over critical boardroom decisions.
Boards should focus on key concerns that will help them drive companies in a transparent manner. Some of these concerns are;
Setting the right culture
Bribery and corruption
Roles of CEO and Chairman
Risk management, and
May be audit committees should develop self-assessment questionnaires covering the above areas and assess board room performance annually, to guide the Board to drive the right agenda.