CGF ARTICLES, OPINIONS & EDITORIALS

Employee wellness programmes is good governance (2013-11-06)

February 20, 2015  3619  3619   

Article by CGF Research Institute (Pty) Ltd

The public’s response to corporate governance scandals and numerous collapses of organisations on a worldwide basis has highlighted the need to satisfy a broad spectrum of governance measures, moreover to understand the effects that poor corporate governance has across the entire supply chain.

Corporate governance, risk mitigation and compliance (GRC) with legal, regulatory and procedural measures needs to be thoroughly understood by organisational leaders and boards, and these critical components must be firmly established within the organisation’s strategy to give it any form of substance and meaning. Failing to include these components in the organisation’s DNA, nullifies their importance in the organisation’s operation and is surely a quick route to disaster at all levels; not least a failure on the part of the board of directors and their fiduciary duties.

It is expected that organisations of all sizes apply sound GRC practices and institute high ethical values for the benefit of investors, their stakeholders, their employees and the communities in which they operate. In short, failure to comply with good governance can have devastating consequences for all the organisation’s stakeholders.  Yet when confronting organisations about their corporate governance practices -- or lack thereof in many instances -- many business leaders cite the need for a more pragmatic means to systematically introduce governance measures that make sense to their business operations (instead of being over burden and threatened with punitive actions).

Besides the obvious corporate governance areas most organisations typically concentrate upon, such as the compliance with various legislation, governance recommendations, internal rules and policies; many organisations inadvertently do not consider the more fundamental governance issues attached to their employees or workforce.  This crucial area -- the human capital of the organisation -- is most often left as an ‘aside matter’ and it does not get the full attention and allocated time it rightfully deserves.  After all, if there is no workforce or if the workforce is negatively impacted in one way or another, realistically speaking the organisation will be in serious trouble with obvious sustainability implications.

Accordingly, as organisations are increasingly expected to report upon their non-financial components of their business, which includes amongst other their ‘people’ and ‘planet’ matters, there is no doubt that this type of reporting is far less developed (or sophisticated) as compared to the hundreds of years of financial reporting.  To this end, organisations may require additional professional outside assistance as they begin to tackle the complexities attached to human (and environmental) reporting.  Reporting of this nature is relatively new for most organisations, and getting to know and deal with the so-called ‘soft’ issues of a business is actually not that easy, especially when it comes to the physical health and the emotional wellness of employees.  It is in this context that organisations will need to practically show the cumulative and individual health risks of the organisation and its employees, not least the future sustainability of its workforce and the health care management plans for employees.