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Business Continuity Tied To Corporate Governance

By DEREK SMITH

The COVID-19 pandemic continues to stretch institutions’ thoughts and outlook on what business as usual means. There are two components that will be under even more scrutiny – Business Continuity Plans (BCPs) and corporate governance structures. While there can never be a complete plan for every crisis, boards, partnerships and entrepreneurial leadership will all come into question as shareholders, employees and the public assess their actions.

As I conclude this series, it must be unequivocally expressed that business continuity planning is a direct reflection of good corporate governance. It is widely known that although there is no standard definition of corporate governance, the common theme embodied by various models speaks to mechanisms used to direct, control and manage an institution’s human and financial assets.

An institution’s governance structure, if built correctly, should systematically highlight deficiencies and successes in your BCP; track remediation efforts; and ensure all actions are documented, stored and accessible to stakeholders. Corporate governance is applicable to any organisation – public, private or public-private-partnership (PPP) etc.

For supervised financial institutions (SFIs) and other regulated entities, a combination of governance, risk and compliance (GRC) is paramount to addressing fundamental issues, risks and strategies within the confines of the law. With or without the COVID-19 pandemic, leadership should consistently be assessing, adapting and acting. Furthermore, you should be communicating and documenting conversations with your respective regulators.

There are three leadership and management areas you should consider as you demonstrate good corporate governance:

1. Reevaluate Corporate Structure – Determine the viability of your current structure, and its ability to effectively navigate and provide oversight during and after COVID-19

2. Reinforce Regulatory Compliance – Ensure requirements are identified and tracked while documenting any extensions. Ensure both horizontal communication and vertical reporting is enhanced and followed.

3. Re-engage Human Capital – Manage human capital communications, movement and engagement. People will ensure your business continuity plans are effective and adapt, as they will be responsible for the strategic and operations decisions.

In conclusion, business continuity plans once robustly developed, strategically implemented and consistently monitored by a well-structured corporate governance regime, will greatly assist through crises such as COVID-19 and other business disruption scenarios.

NB: Derek Smith Jr is a compliance officer at a leading law firm in The Bahamas, and a former assistant vice-president, compliance and money laundering reporting officer (MLRO), at local private bank. His professional career started at a ‘Big Four’ accounting firm and has spanned over 15 years, including business risk management, compliance, internal audit, external audit and other accounting services. He is also a CAMS member of the Association of Certified Anti-Money Laundering Specialists (ACAMS).

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