Upholding corporate governance principles is a collective responsibility for success in the South African insurance industry. It starts at the top, but it shouldn’t stop there.
In the ever-evolving landscape of the South African insurance industry, the responsibility of corporate governance is often attributed to the upper echelons of management, the boardrooms, and the C-suite executives. However, the success of an insurance business in South Africa is contingent upon every member of the organisation understanding and actively participating in upholding corporate governance principles. There is a need for a holistic approach that permeates every level of the organisation.
More than a top-down approach
Corporate governance is often seen as a soft skill, a set of principles and practices guiding ethical decision-making and accountability. Contrary to the misconception that it’s exclusively a concern for top-tier executives, it should be embedded in the fabric of the entire organisation. Drawing parallels with the Treating Customers Fairly (TCF) approach in the insurance sector, it becomes evident that corporate governance is not a checklist, but a guiding philosophy that must infiltrate every facet of the business.
Learning from oversights
Waiting until one reaches the senior or C-suite level to learn about corporate governance may be too late. The need for a grassroots approach, integrated into induction and ongoing training, becomes apparent. There is a broader set of employees who need to be equipped with the knowledge and awareness of corporate governance principles. This empowers them to make decisions aligned with the organisation’s ethical compass in their day-to-day roles, contributing to a culture of integrity.
Impact of leadership KPIs
Company culture can play a pivotal role in the successful adoption of robust corporate governance practices across the organisation, driven from the top down. This resonates strongly in the insurance sector, where the values and decisions of leadership teams can directly influence the entire organisation. The understanding and embodying of corporate governance principles at an organisation-wide level is integral to shaping this culture. Key Performance Indicators (KPIs) of the leadership team should reflect not just financial goals, but also the ethical compass that guides decision-making, thereby impacting the overall organisational culture.
An abridged framework for everyday decision-making
A proposed corporate governance framework should provide practical questions that need to be asked at every level of the organisation, not just by executives. These questions serve as a heuristic guide for decision-making:
- Is this decision in the best interest of our customer, understanding that the end-user is part of a broader group of customers?
- Is this decision in the best interest of our staff and the company, acknowledging the symbiotic relationship between employee satisfaction and organisational success?
- Does this decision align with the spirit of the law and regulations, avoiding the pitfalls of exploiting grey areas?
- How does this decision impact or influence society, encompassing a wide array of stakeholders, including customers, communities, and the environment?
The role of mainstream organisational staff
Mainstream organisational staff, being the frontline representatives, are often the face of an insurance business to both customers and stakeholders. Their day-to-day decisions collectively shape the company’s reputation and adherence to corporate governance principles. From sales and customer service, to claims processing, each action contributes to the broader ethical framework that guides the organisation.
Organisations should take pre-emptive and proactive measures in implementing corporate governance principles. This proactive stance requires the active involvement of every staff member. Training programmes should not only be limited to the C-suite, but should permeate through all levels, ensuring a shared understanding and commitment to the principles that drive ethical decision-making.
A collective commitment to success
The success of an insurance business in South Africa hinges on the collective commitment of every staff member to uphold corporate governance principles. Mainstream staff, equipped with the knowledge and understanding of these principles, become the custodians of company culture and integrity. A cultivated culture where corporate governance is not just a directive, but a shared responsibility woven into the fabric of the organisation at every level.
