The significance of corporate governance seems to be growing these days so it is quite surprising to learn that ICSA’s history goes back more than 125 years. Obviously the organization and the world have both changed but is there still a key principle that has continued throughout the years?
When the Institute of Secretaries, as we were then known, was formed in 1891, the governments of the day were keen to put corporate life and the economy on a surer footing to increase public confidence in business. This is still something which resonates today.
Companies need to encourage people to work for them, do business with them and attract investment. They can only do this if the public has confidence in the way that they operate. Integrity, ethical behaviour and trust are of the utmost importance. How companies engage with employees, customers, suppliers and other stakeholders builds wider confidence in the way businesses are run and helps to deliver more sustainable business performance.
Our members are right at the heart of this, promoting accountability, transparency, integrity and stewardship to ensure that organisations operate in a manner which is most productive.
The other buzzword is compliance. What exactly is the difference between governance and compliance?
Governance and compliance are closely associated terms, but have subtly distinct meanings. Compliance is about adhering strictly to laws and regulations. While governance involves a measure of compliance, it is a broader concept and not simply a box-ticking exercise. Simply put, governance is the practice of running an organisation in line with its own purpose and values, ensuring that decisions are taken by the right people according to the best principles and procedures so that the organisation can meet its obligations to stakeholders.
What does the Chartered Secretary qualification represent and why should someone want to obtain it?
The Chartered Secretary qualification is the gold standard of the governance profession. It builds a unique breadth of technical skills that equip people for a varied career at board level and validates their knowledge with an internationally respected accreditation. Anyone working in governance who has the desire to reach the top of the profession should aspire to qualify as a chartered secretary. Being chartered demonstrates a capability in governance and compliance that draws together many disciplines, such as strategy, finance, law, regulation and risk, and shows a practical understanding of the dynamics of boards and organisations.
The ICSA website states, “You do not have to be a chartered secretary to work in governance” and also “We recognise that becoming chartered is not right for everyone who does governance, risk and compliance work”. Aren’t you rather playing down the importance of the qualification by saying this?
Not at all; we are simply recognising the fact that many people work in the governance field in roles that might not necessarily require the level of depth of understanding afforded by the full qualification.
Chartered membership of ICSA demonstrates the extensive knowledge and skills needed by those with broad governance responsibilities in roles such as company secretary, corporate counsel, head of governance or head of risk and compliance. There are, however, a multitude of other titles that apply to people working in governance, risk and compliance at a lower level or in sectors outside of the corporate world and we offer many ways to qualify, reflecting the needs of different sectors, and the balance between governance and compliance in different roles.
Whatever the level of qualification, being professionally qualified through ICSA shows that people understand how law, finance and governance operate in an organisation and we would always advise that all organisations have a qualified governance professional at board level.
How does a company’s culture reflect its approach to governance?
Good governance is based around organisational purpose, leadership, integrity, decision making, risk and control, board effectiveness, diversity, openness and accountability. Culture is an integral part of this. Without the right corporate culture in place, it is more difficult for organisations to make good quality, ethical decisions, something which is crucial in terms of enabling companies to create long-term value more effectively.
You addressed the 2nd Corporate Governance Conference, in Nicosia in May. As Head of Outreach at ICSA, do you spend a lot of time outside the UK encouraging professionals in other countries to obtain the Chartered Secretary qualification? Is your foreign membership growing?
I spend a large percentage of my time travelling outside of the UK to promote the importance of good governance to both members and non-members internationally. ICSA: The Governance Institute represents the interests of members and students resident in over 60 countries and we have branches in many jurisdictions, such as the Channel Islands, the Caribbean, East Africa and Mauritius, that I visit on a regular basis. Changes in working practices mean that it is increasingly challenging for membership organisations to attract and retain members, but we have reinvigorated our branch network in recent years and recently opened a branch in Ghana. We have a strong offer in terms of qualifications, training and guidance and we are working a number of partners internationally to increase the number of people that we reach overseas.
In addition to Chartered Secretary, ICSA also offers numerous other qualifications. Tell us about them and to whom they are aimed.
As governance has grown in importance we have expanded our offer to move beyond the corporate world and built a portfolio of single sector-based governance qualifications. Above and beyond our core qualifying scheme, we have created qualifications for governance professionals working in charities, the health service, academies and sporting bodies.
We now have advanced certificates in corporate governance and health service governance, as well as professional diplomas in governance and health service governance and a diploma in charity management. We also have certificates in corporate governance, company secretarial practice and share registration practice, employee share plans, charity law and governance, academy governance and sport governance.
What is more, we have developed qualifications that cater to our main regions, including a certificate in company secretarial law and practice for Ireland and our suite of International Finance and Administration qualifications for international finance centres such as Jersey, Guernsey, the Isle of Man and further afield.
We also recently introduced a foundation programme to help people with no previous understanding of the business environment. The first part of the ICSA qualifying programme, it has been designed to give people a grounding in the topics that the qualifying programme covers, including an introduction to the areas of law and finance.
Our qualifications are aimed at people across all sectors and organisations, from the smallest SME; Listed companies; Private; Public etc. Our qualifications are set at different levels and therefore prior experience in an area is not a prerequisite for entry at certificate level.
In 2017, ICSA signed a cooperation agreement with the Institute of Certified Public Accountants of Cyprus (ICPAC) as well as with Infocredit Group. What kind of response do you expect from the Cypriot business sector to the ICSA’s qualifications?
ICSA is passionate about educating businesses on the value and importance of good governance. Cypriot businesses are becoming more and more aware of the significance of having properly trained and qualified staff in this area. Our collaboration with ICPAC and Infocredit Group further enhances the importance of good governance in all businesses.
Resource: Accountancy Magazine, No 131, JUNE 2018, Pages: 80-83, https://www.icpac.org.cy/selk/magazinepreview.aspx
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