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Opinion: Recent scandals should show us just how important corporate governance is

OVER THE LAST few months, the Irish public has been gripped by the dramatic fallout from the RTÉ payments scandal and has also been equally horrified by the recent stories of Temple Street’s spinal surgery crisis.

For both of these controversies, the issue around governance has been at the heart of the conversation. Where were the pitfalls and what can be done to ensure events like these do not happen again?

Good governance should be the foundation of every business. With an increasingly connected and competitive global economy in Ireland, the importance of good business governance cannot be overstated. Our country has rapidly evolved into a hub for international business and investment. Sound business governance practices are not just a matter of choice – they are a necessity. Bad governance practices can impact economic growth, reputation, and long-term sustainability for Irish businesses.

Lessons learned

The collapse of various financial institutions worldwide during the 2008 financial crisis serves as a stark reminder of the perils of poor governance. Ireland – having learned from its own banking crisis – has implemented stricter regulatory frameworks and governance measures to prevent such a scenario from recurring.

These measures have not only protected the financial sector but have also strengthened Ireland’s resilience in the face of economic shocks.

Ireland is now seen as a global tech and finance powerhouse, attracting multinational corporations, entrepreneurs and investors from around the world. This remarkable feat was made possible through prudent business practices, regulatory frameworks, and governance standards.

Robust governance not only safeguards the rights and well-being of workers but also enhances Ireland’s reputation as a trustworthy and reliable destination for global business. Trust and credibility are essential factors for attracting long-term investment and fostering economic sustainability.

Best practice

While ‘no one-size fits all’ in terms of what governance best practice should look like, a clear understanding of the fundamental building blocks is a critical starting point – Accountability, Leadership and Responsibility, Integrity, Stewardship and Transparency.

The Community Enterprise Association Ireland (CEAI) and the Western Development Commission (WDC) Connected Hubs Project Team recently joined forces to publish a comprehensive guide on governance to highlight what is required of community enterprise centres, enterprise hubs, along with co-working and remote working locations, to ensure good governance practices are reflected across the National Hub Network.

In the simplest of ways, the Good Governance Handbook sets out key recommendations and guidance practices to bolster the governance framework of these centres and hubs, increasing the viability and sustainability of these locations into the future.

A strong governance framework will provide clarity as to the role and function of the board – clearly defining the roles and responsibilities of board members (such as setting strategy, oversight, monitoring, and reporting) as well as their subcommittees (such as policies, procedures, terms of reference, and planning). This ensures that the structures, systems and processes are in place to ensure that strategy and business practices are managed in an effective, efficient, accountable and transparent manner.

It is abundantly clear that the ownership and management of a non-profit company i.e. a Company Limited by Guarantee CLG, can differ greatly depending on the CLG’s needs and governance model.

For centres and hubs to deliver on government ambition, it is vital that their governance standards and practices are clear and robust. It needs to provide the necessary assurance to key stakeholders that the centre or hub is operating properly and efficiently, supported by effective management, engages key stakeholders in decision-making and helps to ensure long-term success and delivery of strategic goals.

With the imminent launch of Ireland’s Standard for the National Hub Network – The QHubs Quality and Innovation Management Programme. It’s a world-first strategic framework for the management of centre and hub locations, with biennial third-party verification and certification awarded by the National Standards Authority of Ireland NSAI. 

The Good Governance Handbook is the recommended starting point for CLGs across the centre and hub community who are committed to establishing and/or driving continuous best practices across all aspects of their operations as the sector matures and settles for the future.

Siobhán Finn is CEO of the Community Enterprise Association Ireland CEAI, the respected Voice of Authority for enterprise centres, enterprise and technology hubs and the wider community enterprise sector across Ireland.