Good Corporate Governance (GCG) is essential for maintaining the sustainability, integrity, and credibility of an institution or organization. Here are some reasons why good corporate governance is highly important:
- Transparency and Accountability: Good governance involves transparency in decision-making and reporting. This helps ensure that decisions are based on accurate information and aligned with the organization’s objectives. Accountability refers to clear responsibility towards stakeholders, such as shareholders, employees, and the general public.
- Prevention of Abuse and Corruption: Good governance helps prevent the abuse of power and corruption within an organization. With effective oversight systems in place, detrimental actions that harm the organization or other stakeholders can be identified and prevented.
- Increased Trust: Organizations with good corporate governance are more likely to be trusted by stakeholders, including investors, clients, and the public. Trust is a valuable asset that can help organizations build strong relationships with various parties.
- Operational Efficiency: Good governance ensures that organizations operate efficiently and effectively. Clear management structures and well-defined processes help avoid task duplication and minimize unnecessary bureaucracy.
- Better Risk Management: Organizations with good governance tend to have a better understanding of the risks they face and how to manage them. This helps organizations anticipate, reduce, and address risks more effectively.
- Informed Decision-Making: Good governance provides a strong framework for informed, long-term strategic decision-making. Sound decisions at the senior management level contribute to the long-term success of the organization.
- Attracting New Funding (Investment): Investors are more inclined to invest in organizations with good corporate governance. They believe that organizations with solid governance can deliver better results and manage risks more effectively.
To face future challenges, institutions need security, comfort, and certainty in their operations. Implementing good governance practices, as well as robust security and risk management systems, will help organizations better prepare for these challenges. In this context: ISO (International Organization for Standardization) and GRC (Governance, Risk, and Compliance) play key roles:
– ISO (International Organization for Standardization): ISO provides globally recognized standards for various aspects of business and organizations, such as quality management (ISO 9001), information security management (ISO 27001), and more. Implementing ISO standards helps organizations maintain quality, security, and operational efficiency.
– GRC (Governance, Risk, and Compliance): GRC is an integrated approach to managing governance, risk, and compliance within an organization. It helps organizations identify, measure, and manage risks effectively while ensuring that operations comply with applicable regulations and policies.
By implementing ISO standards and the GRC approach, organizations can ensure they have a solid framework to address future challenges while prioritizing security, comfort, and operational certainty.
Written by:
Prima Hadi Putra
Director of Technology, Communication, and Governance at Dompet Dhuafa