Why do we hear the word governance so frequently, in corporate conversations nowadays?
That is a good development! But we shouldn’t deviate from its spirit, which is ‘doing the right thing’. There is a risk of it becoming just a ‘legal’ term, and equated with “regulation”, which it should not be. The more we discuss governance, the more we can learn from each other in terms of best practice. We believe governance should be at the heart of all conduct. We have ‘institutionalised’ governance in our own code of conduct and daily operations. This doesn’t just govern our conduct, but we bring that to our clients and boards as well to help set minimum standards of best practice.
« Imagine working from ‘the kitchen table’ and the printer fails, or the network breaks down ».
We see that you are part of The Directors Office, but creating a team of Independent directors seems unusual in the Luxembourg market, why do it?
Not necessarily unusual. We formed the group 20 years ago and the objective was to get like-minded, senior professionals together sharing infrastructure and support, but most importantly, sharing experience and expertise, for our benefit as much as for our clients. As the regulatory environment has become more complex, it is increasingly important that (independent) directors operate in a professional infrastructure and have access to support functions and resources. « Imagine working from ‘the kitchen table’ and the printer fails, or the network breaks down ». We now see several such ‘teams’ being formed in different formats, but basically for the same reasons. The Partners are independent of each other and any service provider, and work in a professional and secured environment. They share information, expertise and experience on a daily basis thereby staying abreast of developments and trends, again, for the benefit of each other as well as our clients.
As compliance functions are replaced by AI, will independent directors also find themselves redundant?
Not sure they will, or can, be replaced. Risk management has already become a scientific exercise with tables and traffic lights but the real ‘art’ of risk management is to spot trends and be forward looking. AI can not create a compliance culture, this has to come from management leading (amongst others) by example. The role of Directors, and independent ones in particular, will remain, if not become more important. In the increasingly complex and regulated world, good leadership is crucial in achieving that. The setting, monitoring and managing of the company’s strategy, as well as managing and motivating staff can only be done by people, not machines. While AI can assist with certain tasks and provide valuable insights and analysis, it is not capable of replacing the human judgment, creativity, and emotional intelligence that is often required in board meetings”.