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Deloitte Key Governance Priorities

Reflecting on the key Governance priorities of leading organisations

As the global community navigates increasing economic and geopolitical uncertainty, the rapidly evolving Artificial Intelligence ecosystem presents new challenges. The shift from voluntary to mandatory ESG (Environmental, Social, and Governance) and climate disclosure requirements has highlighted the need for effective governance structures to enhance organizational performance.

In our experience with various organisations, we’ve identified key governance priorities that effective organisations are focusing on. With the upcoming release of King V in South Africa, Boards and Executives have a unique opportunity to rethink their governance mechanisms, adapting best practices to their specific contexts to achieve essential outcomes: an ethical culture,
performance, conformance, and legitimacy.

Reflecting on the key Governance priorities of leading organisations
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  • The status quo: The organisation’s Governance Model is often outdated and misaligned with key business and environmental shifts, resulting in duplication and redundancy in governance structures.
  • Governance priority: The formalisation of a Board-approved Governance Framework as an enabler in driving practical governance principles and practices.
  • The status quo: The importance of appropriately designing the governance model at the board level is recognised, but this focus is often lacking in the Executive Governance Model design.
  • Governance priority: The shift towards a more intentionally designed Executive Governance Model that considers key strategic objectives, governance structures required to support these objectives and a structure that aligns with the Board/Corporate Governance Model.
  • The status quo: The risk exposure for Holding Companies regarding key subsidiaries and their direct impact on the Group's bottom line requires clear articulation of expectations and non-negotiable governance standards for all entities in the Group.
  • Governance priority: Formal Subsidiary Governance Framework providing direction to Boards, including ethical leadership, culture, and governance requirements for oversight.
  • The status quo: The emphasis on reporting requirements has often focused on external integrated reporting obligations, with limited attention given to articulating and establishing expectations regarding the level and quality of reporting by Management to the Board.
  • Governance priority: The approval of a Board Reporting Framework, which sets out the strategic requirements and expectations regarding the level and quality of information provided to the Board.
  • The status quo:  Typically, the Delegation of Authority design happens in isolation, lacking input from key decision-makers. It often emphasises quantitative decisions, missing the chance to outline qualitative decision-making processes.
  • Governance priority: Elevating the Delegation of Authority clarifies decision-making for key strategic decisions across governance levels. Enhancing it should occur alongside reviewing supporting governance instruments like policies, frameworks, and charters.
  • The status quo: Companies are facing increasing pressure to manage a range of risks associated with evolving environmental, social, and governance (ESG) issues. Climate action and sustainability are becoming crucial business imperatives and strategic differentiators.
  • Governance priority: Enhancing the representation of these issues at the executive level, improving transparency and tracking of ESG metrics, and linking performance to sustainability roles will enable companies to demonstrate their commitments to key investors and rating agencies.
  • The status quo: Board members and executives are excited to shape a future powered by cutting-edge technologies like artificial intelligence and generative AI. However, this brings risks and responsibilities.
  • Governance priority: Boards across industries are eager to increase
    time spent on AI discussions to oversee opportunities and risks, especially with Gen AI. They can define and scale AI oversight by adding it to the Board agenda and ensuring discussions remain strategic.

Reflecting on the key Governance priorities of leading organisations

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Key takeaway/Concluding remarks

Although governance practices and their effectiveness have garnered  significant attention over the past decade, the opportunity to enhance governance processes by design will greatly assist governance stakeholders in fostering greater transparency and achieving heightened efficiency within these processes. This will enable the Board and Executive structures to focus their efforts on the critical aspects that require stewardship and oversight. 

Read our piece to deep dive into Key Governance Priorities.

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Key Contacts

Mark Victor

Risk Advisory Director: Sustainability Leader
+27 11 806 5594