Shaping the future of governance: How organisations in Asia can navigate emerging trends for success
From the integration of frontier technologies like artificial intelligence to an emphasis on ethical frameworks, these trends highlight the need for organisations to continually innovate.
As business operations become more diverse, corporate leaders will need a robust ethical framework to navigate evolving risks and make sound decisions. Photo: Adobe Stock
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In today’s fast-moving business environment, digital transformation encompasses more than the integration of technologies such as artificial intelligence (AI), automation and data analytics. It also requires a shift in corporate governance frameworks to facilitate informed decision-making and adept management of the risks that arise from digital innovation.
In a white paper by DXC Technology, senior researcher and advisor Dr Alex Kokkonen outlines 10 trends poised to disrupt standard practices and reshape the governance landscape for organisations across Asia. These trends centre around three themes: The impact of evolving risks on boardroom decisions; the growing imperative for compliance; and the strategic importance of adopting a proactive governance stance.
EVOLVING RISKS AND THEIR INFLUENCE ON BOARDROOM DECISIONS
As business operations become more diverse, organisations grapple with challenges such as geopolitical tensions, supply chain disruptions and evolving trade policies. Corporate leaders will need a robust ethical framework to navigate these turbulent conditions and make sound decisions.
This environment has also intensified the call for transparency. Dr Kokkonen explained: “Shareholders and regulators want greater insight into board oversight and expect to see clearer accountability and governance structures in organisations. This push for transparency stems from their expectation to understand an organisation’s founding principles.”
In response to these expectations, boards must reassess their roles, taking a proactive stance in overseeing partnerships and making key decisions regarding policies and finances. This is crucial for safeguarding the organisation’s stability and maintaining its reputation.
BALANCING RISK, INNOVATION AND ETHICAL STANDARDS IN COMPLIANCE
The acceleration of technological advancement and its integration into every facet of business operations require organisations to closely review and strengthen their IT governance frameworks. This proactive approach is essential to manage tech-driven risks effectively, particularly when it pertains to data privacy and algorithmic accountability.
To remain at the forefront of innovation while mitigating these risks, these frameworks must strike a balance between robust risk management and the flexibility required to leverage the benefits of digital transformation.
Similarly, the effective adaptation, advocacy and adjudication of tech policy hinges on achieving an equilibrium among the interests of varied stakeholders, including investors, customers, employees and the broader community.
Dr Kokkonen raised some key questions to guide policymaking in the digital age: “‘Can policy favour the bold without sidelining newcomers? How do we prevent the concentration of power from stifling innovation?’ These questions highlight the growing expectations on corporations to uphold responsibility, sustainability and ethical behaviour in alignment with societal values.”
EMBRACING A PROACTIVE STANCE TO GOVERNANCE
By 2030, AI is projected to contribute US$15.7 trillion (S$21 trillion) to the global economy, underscoring the necessity for organisations to embrace frontier technologies like generative AI through forward-thinking tech governance. In doing so, they must acknowledge the challenges of mitigating potential risks, including cybersecurity threats and ethical dilemmas, while capitalising on the opportunities these technologies present for modernisation and growth.
To align technological advancements with human values, prioritising human-centricity in government frameworks is crucial. Singapore’s Model AI Governance Framework for Generative AI, for example, is designed to promote responsible AI use and the development of safer AI models that align with human preferences and values.
This commitment to human-centric technology is a cornerstone of modern environment, social and governance (ESG) principles. However, navigating the multitude of ESG frameworks and reporting standards can hinder organisational progress and exacerbate tech debt – the long-term costs of limited, quick-fix solutions.
A 2021 report by the Asian Corporate Governance Association found that Asian companies struggled with accurate ESG data reporting. Misaligned corporate governance standards further impede impactful strides in sustainability.
Addressing these challenges demands the strategic alignment of IT and business objectives. Enhanced IT governance can bridge business objectives and IT capabilities, leading to the establishment of policies and controls that enhance decision-making and risk management.
Tech-driven solutions will be critical enablers, providing organisations with the tools to address emerging governance trends, streamline operations and ensure compliance with evolving regulatory frameworks.
Dr Kokkonen shared that by embracing technology, regional businesses can effectively integrate the 10 trends identified in the white paper into robust and adaptable governance frameworks. “Grounded in the values of transparency, accountability and agility, these frameworks not only pave the way for a sustainable and prosperous future for all stakeholders, but also position organisations at the forefront of global business innovation,” she said.
Explore insights on the evolving landscape of governance trends in DXC Technology’s white paper, Ten Trends Shaping 2024’s Corporate Dialogue.
