BEIRUT: Data analytics, social media, cloud computing, and mobile commerce have become a key part of corporations around the world.
The ongoing megatrend of digitalization has presented various difficulties for companies who want to harness IT power for success in the market; in sales, in competition, and for best-practices corporate governance.
Companies neglecting to stay aware of improvements in digitalization are left behind-trend in terms of effective corporate organization. Digital applications create a condition for productive change throughout entire internal processes, business models and particularly corporate governance.
Corporate Governance is a structure containing rules and processes in which companies pursue their objectives, this structure encompasses a diversity of issues, ranging from shareholder rights to a company’s internal decision-making processes.
Farah Abou Salem, a Corporate Governance Analyst at Shareholder-Rights explained to Annahar the significance of having a robust corporate governance system, by noting that it gives companies the accountability and eligibility to be responsive towards its shareholders and stakeholders.
“Companies should continuously improve their governance practices aligning them with international best practices, have a committed and effective board leadership, adopt transparent procedures to nominate board of directors, formulate clear and explicit governance policies, charters, and guidelines, develop effective mechanisms to monitor and implement board recommendations,” Abou Salem told Annahar.
“Then assigning a CG officer/corporate secretary responsible for drafting, reviewing and ensuring compliance with governance practices as well as procedures for the equal treatment of shareholders and the respect of their rights,” she added.
It is also very important for companies to implement the governance system in the most effective way, “companies are required not only to have the right set of policies and procedures but also to ensure compliance beyond local laws and implementation processes are in place,” Abou Salem said.
According to the 2012 worldwide CEO study directed by IBM, 71 percent of CEOs see technology as the essential factor affecting their organization’s future.
Digitalization has caused a recognizable disturbance in the business world, which has immensely influenced the way in which business is done. It has also introduced a framework to influence corporate governance.
What are the challenges faced by the board room in the digital era? In order to track these challenges, Annahar spoke to a Chief Technology Officer at Raqmeya, Ali Askar.
“On one extreme it has significantly diminished the industry boundaries, to leaving industry struggling to keep pace on security-related matters, internal process changes and with huge data availability, and on the other extreme made existing business models less relevant and cropped up new business models,” Askar told Annahar.
Askar explained that these challenges can be broken down into three important points: changing the business model, market or industry structures and cybersecurity issues; pressure on prices, margins; and meeting the customer expectations.
Technology can be both a blessing and a curse. A blessing because it has aided security, while at the same time IT represents a challenge based on the threat of Internet connectivity and hacking.
Many companies have fallen prey to hacked accounts, identity thief and other related problems. The road to recovery from such issues and these harsh types of virtual attacks are extremely long and painstaking.
The pluses of staying up to speed on technology outweigh the negatives.
"Companies that have a robust governance system attract foreign investors, which gives them a better perspective on protecting shareholder rights and providing assurance that the company will act in the best interest of its shareholders and stakeholders,” Abou Salem said.
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