Corporate governance is the system in which a company chooses to approach rules, controls and policies to enforce a standard of behaviour. This is different for every sector and for insurers this also includes the methods for which they are held accountable for their performance and actions.
What Is The Corporate Code of Governance?
The Corporate Code of Governance is the standard for good practice of listed companies set out by the Financial Reporting Council. This details the necessary requirements for the Board’s composition, development, remuneration, shareholder relations, accountability and audits. If you are unsure of what this means, read our blog detailing What Is A Code of Governance?
What Actions Need To Be Taken For Successful Corporate Governance For Insurers?
As we have said, there are some commonalities amongst good governance practices, we have written about this in the past. However there are some industry specific issues that the insurance sector should take into account.
Insurers need to make sure there are clear roles and responsibilities for everyone employed. There also needs to be a system of disclosure to stakeholders. Every member of staff needs to be involved in creating a supportive environment.
One of the key actions that need to be taken is transparent reporting. From ESG Reporting to Financial Disclosures, you should ensure that every step of the way you are making your investors aware of how their money is being spent.
In this day and age, ESG has an increasing importance, so you should be sure that your day-to-day practices are as sustainable as possible. This means digital files over paper, cloud storage and limited waste. Good governance must include a solid ESG plan. An impressive ESG Score can also improve your hiring and client prospects!
How Can You Improve Your Corporate Governance?
We have written in the past some general tips about How To Improve Your Corporate Governance but there is not a one-size-fits-all approach to governance. Insurers need to consider sector-specific issues they should improve on. For example, there still needs to be a bigger push for diversity.
In 2021, 29% of Board positions were held by women, and only 2% were held by Black, Asian and minority ethnicities. This needs to be improved. Launching schemes that allow for people of different backgrounds to begin their careers in insurance will make a huge difference. Instituting term limits and regular performance evaluations for Board Members is another easy way to ensure that there is a spot open for anyone who deserves it.
There is also the need for risk assessments to be updated. With the pandemic restrictions rolling back, now is the time to review what could have been done differently and what we should be prepared for in the future. Insurance firms know better than most businesses the financial impact of the pandemic. Consider setting up a committee to determine how well your firm responded to the challenges of the pandemic and assign action items to create a better plan for the future.
How Can Convene Help You Improve Your Corporate Governance?
Convene is an award-winning Board Portal which can help streamline your meeting processes from start-to-finish. Now available fully integrated with Microsoft Teams, Convene’s wide-range of features make focusing on good governance easy.
From our action items to our built-in audit trail, you will find your business practices simplified. As a paperless solution, we can also help improve your ESG as all meetings can become virtual or hybrid!