GATEKEEPER AND INFLUENCER IN CORPORATE GOVERNANCE

The Gatekeeper

Although good corporate governance pivots on the effectiveness of company directors, the boards often rely on the input of professionals within and outside the companies. Otherwise, how can we expect the directors to approve financial statements, interpret laws, assess the company's internal controls and state of compliance, advise on reliability and quality of disclosures, and provide corporate finance expertise?

These professionals the so-called gatekeepers include company secretaries, internal and external auditors, corporate advisers, lawyers, rating agencies and valuers.

The independence, integrity and professionalism of these advisers are critical in ensuring that decisions made by the board are in the best interest of the company. While the failure of these professionals in carrying out their responsibilities can have adverse consequences on the company, undue or misplaced reliance on them can result in boards being complacent and dependent.


The Influencer

The influencers are the analysts, financial journalists, watchdog groups and other corporate governance advocates. The Blueprint points out that this group does not have explicit nexus with companies or their boards, but they have an important role in promoting corporate governance through their ability to influence public opinion and to highlight poor governance practices.


5 Recommendations to step up the role of gatekeepers and influencers

1. The first is to explore extending whistleblowing obligations, which currently apply to auditors, to corporate advisers and company secretaries.

2. The second recommendation seeks to enhance the role of company secretaries by clarifying their role and looking into qualification requirements needed to raise the skills and professional standards for company secretaries of listed companies..

3. Establish a responsibility-sharing arrangement for corporate advisers in advising on corporate transactions;

4. Develop corporate governance programmes for financial journalists, and encourage provision of awards and scholarships for outstanding financial journalism in promoting corporate governance; and

5. Gatekeepers and influencers to enhance internal codes of conduct and internal controls to prevent the abuse of market-sensitive information, and to promote integrity and ethical conduct.




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