Corporate or Enterprise Governance is a term that refers broadly to the rules, processes or laws by which businesses are operated, regulated and controlled. The term can refer to internal factors defined by the officers, stockholders or constitution of a corporation or public enterprise, as well as to external forces such as consumer groups, clients and government regulations.
Policy-making groups are calling for improved corporate performance assessment techniques. An evaluation of the validity of those calls by examining investors’ use of non-financial performance measures suggests that non-financial measures of quality and strategic achievement have a profound effect on investment and valuation. Similar criticisms of traditional performance measurement systems can be found in the academic accounting and performance measurement literature. In this literature, these ‘rule-bound’ systems are regarded as outdated, inaccurate and increasingly irrelevant in today’s service-oriented and knowledge-based economy. At the same time, and often for different reasons but delivering parallel outcomes, the concept of an expanded Corporate Governance regime is also emerging.
Recent concerns about corporate governance have also emerged in the public arena, questioning the audit independence problem when accounting firms provide financial audit and non-financial audit services for the same clients; in other words, they play the role of the coach and the referee at the same time. This concern was a catalyst for the American Sarbanes-Oxley Act of 2002, and for Australian policy-makers to reform the Corporations Act (2001) with the Corporate Law Economic Reform Program Act (2004) aka CLERP 9. The net effect of these performance controls has been to educate managers, boards, and investors of the need to move beyond traditional financial-based audit review and controls.
The trend to a broader functional view of the organisation is only now beginning to also embrace sales and marketing. Effective selling is critical to the success of economic organisations and it must be kept in mind that the core of business is production of goods/services and the marketing/sales thereof. However, the implied complexity in the function of selling, combined with a paucity of relevant supporting research by and for practitioners, has left the evaluation process of the sales practitioner and of the sales function as one of invoking primarily subjective measures. Even those measures assumed to provide objective evaluation, measures such as achievement of budgeted units or dollars, have been denounced in the literature as flawed.
For corporate governance to competently apply across an organisation’s endeavours, all functions must be understood and be able to be measured; what cannot be measured cannot be controlled.
Cardif consulting provides a service which addresses the current void between existing corporate measurements practiced as part of statutory compliance and the non financial functions associated with revenue and revenue enhancement. This service provides an independent operational audit which enables a more expanded qualified foundation on which to operate business.
We believe that Governance goes beyond the rules, regulations, accountabilities and structures of an enterprise. It is also about institutional and individual attitudes, leadership, values and behaviours.