Digital technology has disrupted the media and advertising industry as we know it. It is now reinventing commerce, banking, health and manufacturing. There is no more old industry and new industry. Everything is new and everything is being reinvented. How does good governance keep pace in an ever changing world? Is it also up for re-invention?
Good corporate governance is more important and challenging than ever before. It has to balance multiple stakeholders from shareholders to employees, customers, regulators and the community at large. As slowness has become a predominant risk, business leaders and their people have to seek and mitigate risk rather than avoid it.
It is all about the culture – stupid!
In a fast-paced world with limited visibility and predictability, a successful organisation is one of empowerment and transparency, enabling a culture of ethical and responsible decision-making by its people.
Tyro’s ethos is the one of the “Decent Disruptor”. Building Australia’s only digital challenger bank, we provide SMEs with frictionless banking and access to growth capital. Our unique advantage is our dual DNA in technology and banking. We live in both worlds. Here are some of the ingredients that work for us:
We maintain a proactive, open dialogue with the Australian Prudential Regulation Authority (APRA), who has given us the freedom to innovate, with their principle-based approach, as long as we deliver on prudential outcomes
We make it abundantly clear that our purpose is in delivering smart, transparent and fair banking
We embrace governance and risk management as essential to the business and build our policies and systems accordingly
We understand today’s short horizon using experimentation, minimum viable products, fail or adjust fast cultures, risk appetite and risk sandbox
We believe that people should be remunerated fairly and responsibly and share wealth creation in the long term.
Underpinning the cultural revolution is the digital transformation yet again. It will move governance from organisational complexity, forms and reports, compliance and policing to open data, open APIs and algorithms. The move into an ‘open’ governance culture will advance how we monitor behavioral patterns and will alert us to emerging risks, so that people are able to make the right decisions in real time.
To adopt this emerging trend, industry and regulators will need to rethink governance and to invest massively into the skill base in our organisations. Our boards, oversight bodies and executive teams need to become more familiar with the world of digital technology, threats of cyber-security and modern organisational design. In disruptive times, survival is more about doing the right thing, not doing things right. There is significantly more effort required to maintain a sufficient understanding of the changing business and to stay abreast of industry changes and emerging risks.
To keep pace, there needs to be special emphasis on diversity and renewal around the board and management table. All relevant stakeholders need to be in the conversation and be taken along on the journey. There is ample opportunity for risk professionals who embrace this new world and for providers of risk management tools and regulatory technology (Regtech).
In the end, technology is only enabling better governance in a world of accelerating change. What makes it happen is the culture, especially when you look at what people do when their “Boss” is not around. Do they investigate? Do they query? Do they speak-up? Businesses fail because people do not do this, and open governance should be seen as everyone’s responsibility to become more informed and better equipped to handle the changing pace of the digital world.