Beyond compliance: why integrated governance matters today

Say the word governance, and compliance comes to mind. Performance measurement and knowledge management probably didn’t cross your radar screen. They should have. Despite the proliferation of national and international codes, guidelines, and statements of best practices on corporate governance, recent company failures have shown that the primary focus on compliance isn’t enough for good governance. To help your company fulfill its responsibility in terms of governance and accountability, we recommend a management tool—the Integrated Governance Scorecard (IGS)—that includes compliance but moves beyond it to address performance and knowledge management. We’ll provide some reasons why you should pay attention to these dimensions. Of course, governance is a complex issue in any organization. But global companies face the steepest challenges because of the many laws, regulations, performance expectations, and cultural values. That’s why all companies can learn from the best practices of leading global companies. To explore the accounting and finance practices related to governance at three international companies—General Electric,Whirlpool, and Nestlé—we conducted research from 2002 to 2004, discussing the issues with finance executives and others to ultimately create case studies. Three research teams—from the Manchester Business School in the United Kingdom, the University of Siena in Italy, and DePaul University Kellstadt Graduate School of Business in Chicago—conducted the project. The resulting case studies are part of a research project funded by the Institute of Chartered Accountants of England and Wales (ICAEW)