Last week, the inaugural Pacific Governance Summit was held in Suva through the Pacific Corporate Governance Institute. The Summit brought together over 100 members of the business community in Fiji and across the Pacific for a day of panel discussions on key issues affecting corporate governance. The Pacific Legal Network’s own John Ridgway spoke during one of the panel sessions on the corporate governance opportunities and challenges in Fiji and the Pacific region. Some of the key themes throughout the panel discussions included:
Corporate Governance improves business performance: Implementing good corporate governance practices within organisations can lead to improved organisational performance and profitability. This is because having corporate governance frameworks in place can lead to better decision-making by the board, which can reduce risks and reputational damage. Having strong corporate governance practices in-place can also improve access to capital and credit, as greater transparency, accountability and compliance practices can reduce the barriers to investment and lending by investors and financiers.
Knowing your obligations as a Board Member is critical to Good Corporate Governance: Understanding your legal obligations as a director on a Board is a fundamental corporate governance requirement. Directors ought to undertake training to ensure that they are aware of their responsibilities and know what to do when an issue arises, for example, where there is a conflict of interest. In undertaking training, directors should not have a ‘one and done’ mentality, rather training should be frequent and ongoing to ensure directors have ‘refreshed’ and ‘up-to-date’ knowledge on their responsibilities and the trends which shape board performance.
Diversity is a ‘necessary ingredient’ as part of Good Corporate Governance: Having a diverse board of directors ensures a broad set of perspectives and skill sets which drives better outcomes and performance by the board. Diversity on boards in the Pacific region remains a challenge. However, this issue can be mitigated through providing mentoring and training opportunities to, for example, women and ‘emerging leaders’ to encourage them to take up roles on boards, while also ensuring they have the skill sets and support which will enable them to thrive within those roles and in doing so contribute to a more diverse and ‘high-performing’ board.
Culture drives good Corporate Governance: While laws, regulations and internal corporate frameworks drive the requirement to have corporate governance practices in place, an organisation’s internal culture is what ensures corporate governance compliance. Organisations which have instilled good corporate governance practices as part of their culture are more successful in ensuring that these requirements have been met. To make corporate governance a part of your organisation's culture, you should start ‘at the top’ with the board of directors, as the culture of the board will have a ‘trickle down’ effect to other parts of the organisation.
If you would like to know more information about the contents of this article, please contact Samantha Cook. If you are a board member in Fiji (or in other parts of the Pacific), please make sure you have signed up to our free e-guide Directors’ Duties: A Guide to the Pacific, to better understand your responsibilities as a board member.