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How Governance Can Boost Your Corporation’s Success… A Case Study.
How Governance Can Boost Your Corporation’s Success… A Case Study.

discover | Tuesday - 11 / 03 / 2025 - 4:24 am

It is said that leadership is the key to governance!

In any organization/ corporation, leaders have a responsibility to lead effectively. This is not limited to just representing the organization’s values in their behavior, but they must also be role models so that those around them notice their commitment to these values. For example, if the president is not interested in safety standards, does not prioritize customer needs, or treats employees inappropriately, this will inevitably lead to a decline in the performance of the organization/ corporation as a whole.

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When your organization/ corporation adopts effective governance practices, you not only increase the trust of shareholders and customers, but also foster innovation and lay a solid foundation for achieving your long-term goals.

Discover in the following article how governance can effectively and successfully boost organizational/ corporational success. But first, there is a question: What exactly is corporate governance?

Corporate governance is a system or framework that helps companies make strategic decisions that support sustainability and responsibility. This system includes policies that aim to ensure transparency and accountability, while taking into account the rights of shareholders and protecting the interests of all stakeholders, in addition to achieving environmental and social goals.

Corporate governance also serves as a mechanism to ensure that the company’s executive management is accountable to the board of directors, which primarily represents the interests of shareholders.

The importance of corporate governance:

Governance helps you make decisions that benefit your business. More specifically, it can improve your company’s performance, make it more stable and productive, and create new opportunities for growth.

 

It can also reduce risk and enable faster and safer growth, as well as enhance reputation and build trust. All of these benefits contribute to the long-term sustainability of your business.

Good governance can also attract investors by establishing clear reporting procedures that provide them with the information they need. Investors tend to put their money in reliable companies with strong management and a clear direction. If they feel that your governance is weak, they may consider their investment risky and demand higher returns or a larger stake in the company.

Having a strong governance team can support you in difficult times. For example, they can help you:

– Deal with cash flow problems.

– Make decisions about expanding or downsizing the business.

– Manage employees who are facing difficulties.

– Attract new talent to the team.

– Deal with shareholder expectations.

What is the best approach to building an effective governance system?

To ensure the success of project governance, it is essential to define specific roles and responsibilities for both the client and the partner. On the client side, the person in charge is usually called the “project sponsor,” while the partner or vendor representative is known as the “principal supplier.”

In large projects, the partner may appoint a project executive to ensure close monitoring of the implementation stages. Each individual on the project team has a clear and specific role that they must adhere to to ensure the smooth running of the project.

But how are corporate governance principles applied?

There are a set of procedures followed to implement governance in corporations and companies, and here are the most prominent of them:

1- Setting the dates of steering committee meetings:

The steering committee holds periodic meetings to review the progress of the project and take the necessary actions to keep it on track. The committee may include members of the board of directors or senior executives who are appointed throughout the project period.

2- Establish a risk management and issue resolution mechanism:

A clear process should be established to identify risks, assumptions and issues, and document them in a shared record known as the “RAID record” (RAID is an acronym that stands for Risks, Assumptions, Issues and Decisions). This ensures complete transparency and accountability between the client and the partner.

3- Prepare periodic reports on the project status:

Regular reports on the project status are provided to the team and the steering committee. A traffic light system (red, yellow, green) can be used to clarify the project status and highlight areas that need attention.

4- Set communication and decision-making expectations:

The timing of responses and the frequency of meetings should be agreed upon, in addition to determining the speed of resolving problems and making decisions. This requires establishing a clear “chain of command” or reporting lines to facilitate the decision-making process without obstacles.

Through the above steps, the project can be ensured to run smoothly and effectively, while maintaining transparency and accountability among all stakeholders, with the aim of enhancing the success of the corporations.

Now, after reviewing the mechanisms for implementing sound governance, we will provide you with “case studies” of a number of Saudi and international companies that have successfully implemented the concept of governance.  We will shed light on the strategies followed by these companies, and how these strategies contributed to achieving their goals and enhancing their performance.

Case Study:

1- Saudi Aramco:

Good governance is at the heart of Aramco’s business, as the company recognizes that good governance is the foundation for continued success and sustainability. Since its inception, Aramco has provided the opportunity to benefit from accumulated knowledge and experience, and has worked to continuously develop its operational programs and governance systems.

Environmental, social and governance (ESG) considerations are an integral part of Aramco’s approach to managing its business. The company has adopted an internal governance model that integrates sustainability principles with business strategies, enhancing the efficiency of the decision-making process and improving the clarity of roles and responsibilities within the company.

This system is based on careful oversight and a disciplined methodology, which enhances transparency, accountability and responsibility at all levels. It also enables Aramco to identify and address key issues effectively, in addition to integrating sustainability principles into its operational strategies (and in line with its overall business objectives).

2- Tesla Motors:

Apple is a leading example of applying the best corporate governance practices to achieve success and sustainability.

Transparency is one of the most important pillars on which Apple relies, as it is keen to provide accurate and clear reports to shareholders and stakeholders about its financial performance and potential risks it may face.

Apple’s strategies in corporate governance:

– Risk management: Apple has developed an advanced risk management system that enables it to proactively identify potential threats and take appropriate measures to deal with them with high efficiency.

– Stakeholder engagement: Apple adopts an effective interactive policy with all stakeholders, including employees, shareholders and customers, ensuring that the company’s goals are aligned with the aspirations and needs of all stakeholders.

– Continuous innovation: Apple focuses on enhancing the innovation environment by adopting flexible governance policies that allow management to make quick and effective decisions, helping it maintain its leadership position in the global technology market.

In short, Apple’s experience shows how strong corporate governance can be a pivotal element in achieving excellence and long-term sustainability.

What is the relationship between ERP and Governance?

Governance and ERP are two critical elements for any company, contributing to ensuring efficient operations and achieving strategic goals.

In this context, “Logix AI” system comes to integrate closely with other systems used in your business; enhancing security levels and simplifying governance and management processes effectively. In addition, this integration contributes to improving the flow of information between different departments, which supports faster and more accurate decision-making. The system becomes an essential tool for enhancing transparency and efficiency within the organization.

Finally:

Governance is not just a routine administrative mechanism, but rather a strategic investment in the future of the organization, ensuring its continuity and long-term success. Therefore, adopting strong governance practices is a vital and essential step for any organization aspiring to achieve excellence and leadership in its field of work.

Are you ready to enhance your organization’s governance and drive it towards excellence? Start today by adopting the best governance practices to ensure the long-term sustainability and success of your business.

Contact us to find out how Logix can help you build a strong and effective governance framework!

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