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THE 22ND ICPSK ANNUAL

INTERNATIONAL

CONFERENCE

April 11th-13th, 2018

THE SAROVA WHITESANDS BEACH RESORT

AND SPA, MOMBASA

‘The Governance Profession’

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‘The Governance Profession’

T H E M E :

INTEGRATED THINKING: A RELATIONAL PERSPECTIVE

GOVERNANCE ASSESSMENT: VALUE PROPOSITION

Cs Rose Lumumba

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‘The Governance Profession’

Outline:

1. Value Proposition

2. Governance Assessment

3. Governance Assessment Value Proposition

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• A value proposition (VP) is a statement that clearly identifies what advantages one can receive by using or purchasing a particular product or service.

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• Most important element of a marketing statement

• Tells proposition prospects why they should do business with you/buy your product rather than your competitors

• Makes one’s products or services crystal clear from the outset

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TAP THE APP, GET A RIDE

• One tap and a car comes directly to you

• Your driver knows exactly where to go

• Payment is completely cashless

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Apple iPhone- Experience the Product

• Apple knows how crowded and competitive the smart device market is so, rather than focus on a specific feature(none of which are unique to the iPhones) the company instead opts to focus on the experience of using an iPhone.

• ‘’ Every iPhone we’ve made- and we mean every single one- was built on the same belief. That a phone should be more than a collection of features. That, above all, a phone should be absolutely simple, beautiful and magical to use’’

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Value proposition

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“If management is about running business, governance is

about seeing that it is run properly. All companies need

governing as well as managing.”

• Prof. Bob Tricker, 1984

So what is the value proposition of running businesses properly?

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• When a board appoints you to conduct a CGA, its attention is not in the processes, it needs to know at a high level that you and the assessment can solve its issues.

• To create a good Value proposition one must have an in-depth knowledge of:

The Industry

Pertinent laws

CGA Processes

Report writing

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CORPORATE GOVERNANCE ASSESSMENTS

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“Corporate Governance is the system by which companies are directed and controlled.”

Management runs the company’s daily operations

Board of Directors develops strategy and oversees management

Shareholders provide funding

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An Assessment of a Company’s Corporate Governance Status

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Commitment to Corporate

Governance

Board practices

Control environment and

processes

Disclosure and

transparency

Shareholder rights and

stakeholder treatment

PAGE1. Evaluates a Company’s Corporate Governance System and identifies areas

of reform, enhancement and focus

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2. Understanding of leading CG Practices

• A company will gain a better understanding of leading governance practices, identify actions to maximize performance, and help become recognized as market leaders.

• There is ample global evidence of CG value addition, e.g.:

McKinsey survey: Investors willing to pay premium up to 25% for well-governed companies.

IFC Scorecard analyses show top rated CG companies outperform ROE average.

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Board of Directors/Trustees

Management

Shareholders/OwnersBoard Excellence

Control Environment & Processes

Disclosure, Transparency, Conflict/Conduct

Shareholder Practices

Board roles, composition, committee structure, procedures, director duties, overall functioning.

Structures in place for risk management, control, internal audit, external audit, compliance.

Information disclosures to shareholders and market; Approaches for handling conflicts of interest and conduct.

Shareholder practices, AGM procedures.

3. Explores leading governance practices and how they might apply to organizations and uses an interactive approach to try and identify practical improvement opportunities for a organizations over the short/medium/long terms.

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4. Enhances Company Perform operationally/financially

Corporate Governance program helps define clear rolesand responsibilities – better accountability

Prudent financial and non-financial controls areconstituted

Streamlines business processes, leading to betteroperating performance

Sound Governance program enhances firm’s reputationand builds trust amongst stakeholders

Reputation, sound governance, and disclosuresenhance firm’s ease of access to outside capital

Implementation of an effective Governance programimproves board/management oversight in key areas ofrisk management

Enhancement of controls through stronger internalaudit and compliance

Investors are willing to pay a premium for companieswith strong governance practices

Well-governed firms witness superior valuations

Rating agencies also consider firm’s CorporateGovernance program in the rating process

SHAREHOLDER VALUE CREATION

INCREASED COMPETITIVENESS

OPTIMIZES OPERATIONAL AND FINANCIAL EFFICIENCY ENHANCES THE FIRM’S REPUTATION AND TRUST

IMPROVES RISK MANAGEMENT IMPROVES VALUATIONS AND LOWERS THE COST OF CAPITAL

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5. Measures an organizations Commitment to Corporate Governance

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Board Excellence

Board Functions & Behaviors

Board dynamics Board discussions Board behaviors Board working procedures Board conflicts Board evaluation

Board Roles & Director Duties

Strategy setting Oversight and monitoring Board authorities Relationship with management Director duties and

responsibilities

Board Structure & Composition

Board committee structure Committee functioning Board size and terms Board composition Boardroom balance Board skills and independence

6.Helps identify opportunities to strengthen leadership effectiveness

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7.Measures the Relationships between Competing Tensions

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• “If management is about running business, governance is about seeing that it is run properly. All companies need governing as well as managing.”

• Prof. Bob Tricker, 1984

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In your groups, discuss and develop a one sentence value proposition for Corporate Governance

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Questions?

The Governance Profession