Key governance challenges: insights from our Corporate Services Director

In the complex landscape of UK corporate governance, where rapid technological advancements and regulatory shifts are the norm, understanding and effectively navigating these changes is essential for business success.

Our UK Corporate Services Director, Joshua Gallienne explores some of the most pressing governance challenges facing organisations today and discusses how to effectively address them.

Adapting to regulatory changes

One of the never-ending challenges in corporate governance is keeping pace with regulatory changes, which also vary across countries and jurisdictions. Compliance is not static; as new laws and standards emerge, companies must adapt quickly to mitigate risks of penalties and reputational damage. In the past two years alone, the UK’s Economic Crime and Corporate Transparency Act (ECCTA) introduced significant developments to the country’s corporate criminal liability law, together with the 2022 passing of the Register of Overseas Entities (ROE) Act.

The key to managing this dynamic aspect of governance is staying informed and agile. At Praxis, we prioritise keeping our teams and, by extension, our clients well-informed about relevant regulatory developments. Through continuous education and leveraging technology, this proactive approach best prepares our clients for potential changes.

We are currently collaborating with our global offices in response to the latest ECCTA announcements, which will likely impact clients with UK entities that are managed internationally. This proactive approach ensures our clients are prepared for potential changes.

Moreover, the recent introduction of the Renters Reform Bill 2024 has raised concerns with some of our clients who own or manage properties within the UK. While Praxis does not provide direct legal advice, we are partnering with specialist advisers to develop and implement comprehensive plans for those affected.

Board effectiveness

Effective board management is crucial for making strategic decisions and overseeing the broader business strategy. However, many organisations struggle to make their board operations efficient and productive. Utilising advanced board management software can transform this process. Praxis’ CoSec services are delivered via integrated board software solution, Diligent, which not only streamlines meeting planning and document management but also enhances the strategic decision-making capabilities of boards by providing them with timely, actionable information.

Resource optimisation in governance

Resource constraints pose a significant challenge, especially for smaller businesses and startups. Balancing limited resources while ensuring comprehensive governance coverage is a common hurdle. A practical solution to this challenge is leveraging outsourced CoSec services, which can provide high-level expertise without the cost of employing a full-time, in-house company secretary.

Understanding the high cost associated with employing an internal CoSec, including salaries, holiday pay, sickness benefits and other related expenses, we offer a more cost-effective alternative. Our outsourced services enable businesses to access a dedicated team of governance professionals at a fraction of the cost. This approach not only offers financial efficiency but also ensures continuity and reliability.

Furthermore, tailored governance solutions can transform an organisation’s operational effectiveness. By using scalable services, businesses can ensure that their governance framework grows in line with the growth of their operation. Our custom solutions of CoSec LITE for startups, and CoSec Classic for more established firms, provide the right level of support based on the size and complexity of the business. This ensures that governance needs are met without straining in-house resources.

Strategic risk management

In today’s business environment, proactive risk management is more than a necessity - it is a strategic advantage, especially within the UK where business conditions are continually evolving. One critical aspect of strategic risk is the threat of not adapting to changes - known as change risk. This occurs when the rapid pace of business demands is not appropriately assessed, potentially leading businesses to fall short in mitigating the risk of incidents, such as lapses in cybersecurity accountability at board level.

For instance, a lack of strong governance frameworks can leave companies vulnerable during major technology overhauls or regulatory updates, where swift adaptation is crucial. Effective governance should be at the heart of any change programme, not only to reduce risks but also to enhance the benefits of these transformations. Within our team, we work alongside our clients to develop robust risk management processes that align with their strategic objectives. This approach not only mitigates risks but also enhances the overall decision-making process, supporting sustainable growth.

­­Conclusion

Effective governance is a critical component of a successful business strategy. It requires not only understanding and adapting to challenges but also anticipating future needs and strategically aligning resources. With our expertise, our goal is to empower businesses by enhancing their governance structures with expert knowledge and innovative solutions. By staying up to date with the latest legislation and focusing on effective governance practices, we help our clients build a solid foundation for success.

To find out more about our company secretarial services, contact Joshua or Ava to schedule a personalised consultation.

Please note that this article is intended to provide a general overview of the matters to which it relates. It is not intended as professional advice and should not be relied upon as such. Any engagement in respect of our professional services is subject to our standard terms and conditions of business and the provision of all necessary due diligence. © Praxis 2023