Doha Bank Q S C : GRC Framework should be Realigned to Address Challenges Arising from Changing Market Dynamics

The Qatar Governance, Risk and Compliance (GRC) Roundtable was hosted by Finesse along with it's partner Metric Stream on 10th September 2014 at Grand Hyatt, Doha. Dr. R. Seetharaman, CEO of Doha Bank was the Chief Guest speaker at the event. GRC subject matter experts, research analysts and industry practitioners from across Qatar and the rest of the Middle East participated in the event.

Speaking at the session Dr. R. Seetharaman gave insight on how Global Governance and Corporate has developed in recent years. He said "The Global Governance has got redefined after the crisis and has an impact on Corporate Governance. The failures of Lehman & Madoff has indicated how corporate governance failure can contribute to systemic risks. The financial markets have become gambling grounds and Individual regulatory systems have be revamped to better monitor threats to the whole financial system. Economies, institutions and individuals need to follow governance. It can be called corporate governance for institutions, and global governance for economies. Individuals are affected by corporate governance and global governance due to the links with institutions and economies, respectively. The Anglo-American model of corporate governance is being promoted as the global standard. However there is no one size fit all corporate governance approach."

Dr. R. Seetharaman gave insight on the GRC framework. He said "GRC is an organization's integrated approach to governance, risk and compliance; typically encompasses activities such as governance, enterprise risk management (ERM), internal controls, regulatory compliance and internal audit. GRC improves the alignment of risk activities to the strategic objectives of the business. Companies are now being forced to align in order to close gaps and eliminate overlaps, while focusing on the risks that matter and create value. The fines, penalties and settlements face by global financial institutions recently have remphasised the importance of regulatory compliance dimension of GRC framework.GRC framework should be realigned to address challenges arising from changing market dynamics."

Dr. R. Seetharaman highlighted the segments in corporate Governance which required attention after the crisis. He said "Risk management, Remuneration and Incentive Systems, Board Skill's and independence and Shareholder engagement are the key areas which needs to revisited. The Board should review and provide guidance about the alignment of corporate strategy with risk appetite and the internal risk management structure. Steps must be taken to ensure that remuneration is established through an explicit governance process. Transparency needs to be improved beyond disclosure. The functions of Chief Executive Officer and Chair of the Board of Directors are separated. Shareholders have should be proactive. Institutional investors should be encouraged from acting together in individual shareholders meeting provided that they do not intend to obtain the control of the company."

Dr. R. Seetharaman gave insight on how technology is used in GRC frameworks. He said "Traditional GRC technology solutions were aimed at providing organizations with a single issue solution, but nowadays leading companies utilize GRC technologies for multiple purposes such as audit management, regulatory compliance, IT governance, performance improvement and policy management. Therefore integration, central databases and reusability are more important than in the past. GRC technology offers solutions to fully integrated governance, risk management, compliance and process improvement."

Dr. R. Seetharaman gave insight on evolving models of Board excellence." The key evolving areas in Board room excellence models are Integrity, Assistance of Board Committees, Board diversity and Governance framework. An effective board is concerned about integrity inside and outside the boardroom. Integrity at the Board level can be measured by evaluating key governance elements against attributes such as skills and knowledge, process, information and Board behavior. Boards can have multi - year succession plans and Nominating committees should map out future board retirements and design systematic approach to board searches. Remuneration Committee can broaden the pool of independent directors and also invest in their training. Global trends indicate a gradual increase in the percentage of companies that have women on their boards. Basel 3 has revised the governance framework taking into consideration the key areas which required attention after crisis."