Professionalized Governance
The importance of "professionalized" governance to combat uncertainties and face the coming years!
The world is changing, transforming, competition is intensifying, market volatility is increasing, and access to raw materials is becoming more difficult. There is no choice but to adapt to ensure the long-term viability of a business. It is the role of governance to consider these new trends, to address uncertainties, and to guide the necessary changes and developments. A poor decision—one made without sufficient information, poorly calibrated, or simply erroneously due to a lack of expertise—can quickly and easily jeopardize a company's future.
If the current governance faces a need for agility, it also faces, in the short and medium term, an imperative for professionalization.
As the September 2022 issue of PME magazine put it, "from an honorary title, the role of administrator has become a profession" (Medhi Atmani).
It can be said that the time of governance based on complacency is over, as is that of governance based on pure "compliance" with laws and regulations.
However, many Swiss SMEs, family-owned SMEs, are still content with traditional models, which do not prepare them well for crises.
For these SMEs, it is becoming increasingly critical to "structure" their governance. A board of directors is defined in particular by its proper composition, its operating methods, its processes, the relationships established between its members….
How can we know if its governance is optimal/optimized?
In fact, the "prenatal" act of a board of directors is probably the diagnosis of the future governance challenges of a given company, based on its size, culture, industry, and strategies. This analysis of risks and challenges allows, on the one hand, the definition of the measures necessary to successfully implement these strategies, and on the other hand, the optimal structuring, organization, and renewal of its board of directors.
Analyzing the major issues and risks makes it possible to optimize the board of directors from the point of view of its recruitment, its composition, the number of directors, the skill profiles of the directors, and from the point of view of the sphere of reciprocal responsibility of the directors.
In doing so, governance can then become "professionalized" on several levels:
- The governance spectrum of each company has made it possible to calibrate the specific expectations of each director.,
- An evaluation method can be put in place (KPI – KVI) from the point of view of the governance of the company in general, as well as the impact and contribution of each of the directors.
- A policy of continuing professional development within the board of directors can be usefully implemented in light of the evaluation results.,
- And finally, the board of directors can be strengthened by an independent director who will not only bring his external perspective, his specific expertise, but also his mediation, his serenity in decision-making, by eliminating the bias of subjectivity and financial "dependence", that is to say the emotions inherent in being a shareholder or having stock options.
To cope with crises, whether small or large, it is essential to be prepared.
APIA's primary mission is to promote and professionalize the role of independent director. We are based on a strong conviction: good corporate governance contributes to a company's performance and sustainability.
Our association currently comprises 25 members in French-speaking Switzerland. Each member has achieved excellence in their professional life, acquiring not only the knowledge and skills of business leaders and/or administrators, but also a passion for business, its challenges, its transformation, and its success. APIA is a hub of expertise and continuing education in which each member is expected to participate annually, and even monthly.
APIA Swiss Team
November 2022