As per a recent WSJ news, an auto industry titan, who was also the architect of an alliance between three global Auto Industry Leaders, has been arrested for Financial misconduct. The said Company went to the authorities with details of an internal probe that alleged the Chairman incorrectly reported his compensation in filings over many years. The Japanese auto maker also announced that it would seek to oust the Chairman from his position.
The Company declared that the probe started with a whistleblower followed by a statement from the prosecutors that in the five fiscal years ending March 2015, the Chairman was under suspicion of violating a Japanese law that prohibits false financial filings.
This certainly turned out to be a Crisis for not only the Company, but also for the allied Companies . One of the allied Company shares fell more than 10% in European trading on the news of the arrest, while the said Companys own shares were down more than 6% in Tokyo trading Tuesday.
Board Leadership called into action for surviving the Crisis
In the modern Business Landscape, Governance of Companies has moved from the inner chambers of the Boardroom to the external spotlight of public discourse. This incident is a classic example of why the Boards need to act fast in an age of constant disruption and tightened Regulatory environment. Board leadership for 2019 and beyond is not only about making optimal choices to achieve goals and push forward strategies, but the role has expanded to Operational leadership in terms of establishing the Board’s agenda, facilitating rapid and accurate decision making and having as well as communicating the right “Tone at the Top”.
More is expected out of Boards and C-Suites in terms of ensuring their firms’ Compliance with an ever-evolving set of Regulations, cutting off executive wrongdoing right at the pass, and being transparent to the Shareholders. While the importance of the right “Tone at the top” is not a new topic, exhibiting the “right tone” by the Board members has always been an area of opportunity. Communicating this tone effectively implies that other leaders in the hierarchy (country, divisional, business unit, etc.) are also living and embracing these values. The argument and need for strong Leadership from boards is even more compelling and hence we need to discuss how Board Governance can be amplified.
Reforming Governance from the Boardroom
Governance reform gives a Board, the real power to oversee management’s actions. The most critical responsibility is to exhibit and incorporate the ability to be Transformational leaders focussing on ensuring long-term success, growth and sustainability of their companies. Boards can and must do better at balancing their function as Compliance officers with their function as Creative Leaders of the future. Directors constantly need to steer themselves towards farsighted strategic and financial thinking and succession planning, encouraging the top team to raise the game even when things are running smooth and respond creatively in case of threats and Risks. Current Policies and Regulations require boards to assist their companies grow and prosper, not just in the next quarter but in the next decade and beyond.
With Confident Governance has been an Industry Leader in providing the best in Risk & Cyber Governance and Regulatory Compliance. Using the latest in Emerging Technologies like Artificial Intelligence, Big Data Analytics and Cloud Computing, the Governance platform offers Transparency and Real time Reporting to the Board and the C-Suite into the critical Business Processes. All of this into an Agile, Mobile, Secure and Scalable platform to assist Risk, Governance and Compliance officers to govern their Processes Anytime, Anywhere and on Any device with intuitiveness, which has been our mission to propel Companies towards Growth, Sustainability and increasing Revenues.
Let’s stay connected for Governance best practices for 2019 and beyond !
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