1. THE INSURANCE INDUSTRY
Corporate Governance: Issues and Challenges

2. An Industry Offering Services to Stakeholders
Protection against financial loss: offering some reimbursement for losses actually incurred.
Minimizing risk: enabling the insured to pursue business and other activities with relative confidence.
Ensuring reliable support: for survivors who would otherwise be unable to continue a positive existence.

3. Corporate Governance
The process by which enterprises are made responsive to the rights and wishes of stakeholders. Demb & Neubauer, 1992
The relationship among various participants in determining the direction and performance of enterprises. Monks & Minow, 1995

4. Parties to Corporate Governance
Board of directors
Management
Shareholders
Employees
Customers
Suppliers
Regulators
etc.
All parties have an interest in the firm’s performance. They make inputs, but also have needs and expectations that corporate governance should try to meet.

5. Stakeholders’ expectations
Customers: Services as promised.
Employees: Job satisfaction
Investors: Good returns.
Business Associates: Stable relationships.
Community: Social responsibility.
Government: Fulfilment of statutory obligations.
ALMIGHTY GOD: the use of all resources according to His will.
All stakeholders have the right to demand FULL ACCOUNTABILITY.

6. RESPONSIBILITIES OF THE FIRM
Fulfilling the long-term goals of the enterprise
Considering & caring for employees’ interests
Maintaining excellent relations with business associates
Maintaining proper compliance with statutory requirements
Taking account of the needs of the environment

7. CORPORATE GOVERNANCE: The core issues
The firm offers fair returns for each stakeholder’s input;
The firm displays high business standards;
Different interests are equitably managed;
Executives handle fiduciary responsibilities conscientiously;
The firm practises good ethics and accountability.

8. The Functions of the Board
Reviewing & approving corporate strategy
Approving budgets & reviewing performance
Ensuring cost-effective management of corporate resources (especially the human resource)
Managing top appointments & succession
Ensuring compliance with statutes
Reporting to stakeholders
Reviewing board performance

9. THE BOARD AND MANAGEMENT: Corporate Success – a shared focus
An identity of objectives and interests
Mutual accountability
Joint focus on the interests of stakeholders
Commitment
Collaboration, not competition
Team spirit, mutual confidence & respect, clarity of respective roles
Free and constructive sharing of information

10. A STRATEGY CHECKLIST for Board and Management
What business(es) are we in?
Are we (still) in the right business?
Are our corporate objectives reasonable, appropriate and clearly defined?
Are we in the right position in the market?
Are we utilizing and managing resources and assets efficiently? …..

11. STRATEGY CHECKLIST (continued)
Are our human resource policies effective for finding & retaining good people?
What is our track record in community and environmental responsibility?
What is our business ethics record?
What are the threats to our business?

12. DIVISION OF ROLES: Sensitive Issues for the Board
“Direction” of the business;
Appointments to Board positions;
Terms & conditions for executives;
Managing the performance of senior executives;
Determining executive compensation;
Ensuring effective executive succession.

13. THE VALUE-ADDING BOARD
An external perspective
A dimension of competent objectivity
Supportive criticism of management
Informed appraisal of the business
A friendly ear in times of difficulty
The custodian of accountability
The moderator of conflicts of interest

14. The Enterprise of Tomorrow
Who will be our customers/stakeholders?
What needs/expectations will they have?
How will goods/ services be delivered?
What new delivery competencies must we have?
How will the competencies be acquired?
Competition, globalisation – what are the terms?
What actions must we take – now – to be ready?

15. Establishing business integrity
Determine and articulate the values cherished by the enterprise.
Establish clear ground rules – code of practice indicating standards and procedures.
Specify the consequences of off-standard conduct.
Communicate clearly to all concerned.
Audit the observance of discipline frequently.
Apply agreed rewards and sanctions impartially and consistently.