How C-R-A-P-I is F-A-R-T

In my upcoming booking titled How CRAPI is your FART I have tried to describe the approaches organization should adopt towards embedding good corporate governance standards. The book brings to light the need for all members of the organization Top-2-Botoom and Bottom-Up to adhere to what I have termed operational governance. This write up shares the introduction to the book and provides definitions of the terms C-R-A-P-I and F-A-R-T. I hope you would enjoy reading this as you await the full publication which would hit the book stands early next year.

Introduction

The act of farting though considered extremely disgusting is an act that brings about huge relief for the individual farting. From experience, the act and/or the art of farting can fall into three categorize. The first is probably the most embarrassing especially where the fart catches up with you in public and someone hears that roaring sound and all eyes turn around to find out who it was that did not have the decency to get out of the room to carry out one of nature’s way of relieving the excess gas within your body.

The truth however is that though it is the loudest form of farting, it is probably the least disgusting considering the fact that farting is the release of gas of from the residue of the excesses which have not been processed and as such is dirty and smelly.

The second type of Fart is one which though not as loud as the first, results in a smaller decibel of noise but the level of smell increases. With this type of fart, most people in the room will probably not hear the sound of the fart, but will eventually know that someone has polluted the room cause of the pungent smell released from the act.

This type of fart brings about a greater form of relief that the first noisy one and helps your digestive system realign towards operating better and smoother.

The last type of fart is one that no one hears a sound, but everyone in the room carefully exits the room because the degree of pungency of the smell is so much that you risk suffocation by remaining in the room.

This type of fart I call the ultimate relief bringer. Not only does it help the digestive system reset itself, it also helps release all the excesses of dirt within the system and brings so much relief to the person that would be long lasting.

This third type of fart is what I call C-R-A-P-I F-A-R-T.

The analogy above is how I see and would describe the art of governance for businesses. This is because many a time organizations with some of the least systems of corporate governance make the most noise about having effective and efficient governance systems. Whilst those with some of the best systems are the one who like the last type of fart described continue to ensure that they embed their C-R-A-P-I F-A-R-T systems towards ensuring sustainability.

This book is my experience over the years of trying to understand, develop, implement and embed efficient and effective systems of Corporate Governance, Risk and Compliance and the concept of C-R-A-P-I F-A-R-T. I hope this is an experience worth sharing and would be of immense contribution to the future of managing governance, risk and compliance within organizations.

Governance, Risk and Compliance

According to Wikipedia, governance, risk management, and compliance or GRC is the umbrella term covering an organization's approach across these three areas: Governance, risk management, and compliance.

It is important to note that GRC is not a project nor is it a technology system. It is the set of objectives set up by a business towards improving corporate governance by employing better and more effective and efficient compliance to managing risks. This is done in order to get a more detailed understanding of the impact of various risks on the operations and activities of the business. In view of this, there are numerous definitions for the terms that make up the acronym GRC.

As defined by Investopedia, “Corporate Governance – is the system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of a company's many stakeholders, such as shareholders, management, customers, suppliers, financiers, government and the community.

Compliance Management on the hand can be defined as the process which helps ensure that a set of people are following the rules and regulations as set out by the relevant authorities. These rules are generally referred to as “Compliance Standards or Compliance Benchmarks” whilst the process is what helps to manage such compliance to such standards and/or benchmarks.

Risk Management also referred to as Risk Governance – can be defined as the institutions, rules, charters, conventions, processes, procedures and mechanisms by which decisions relating to RISKS are made and implemented. This could be narrative or positive, as it analyzes and put in place what are called Risk Management strategies that would help reduce and/or avoid disasters that could lead to human and/or economic costs.

In order for organizations to fully maximize its potentials towards achieving the GRC objectives, there is the need for developing and implementing a system that would help manage the processes and procedures adopted for achieving the set-out objectives. This system is what I have termed C-R-A-P-I F-A-R-T which will be defined in the next two chapters.

Defining C-R-A-P-I

What makes any organization tick? This is a question that when you ask many CEO’s would provide a million and one different answers.

For an organization to function, it is important that the organization from the unset creates structures and systems that would help the owners and managers of the organization achieve its objectives. These systems sometime are so complex that organizations from time to time review and re-evaluate their operational mechanisms towards improving on their systems to achieve their goals.

However, following a research carried out by someone who was my line report, it became clear to me that for any organization to function in the right manner and ensure that they build a sustainable system, then the organization would need to become C-R-A-P-I. The act of efficient and effective GRC is so tedious and sometimes extremely annoying that organizations see the act for good governance and being crappy.

Based on the finding of this research, we applied the C-R-A-P-I-ness theory to help put in place a better understanding on the key to successfully developing, implementing, embedding and managing the act of GRC for the organization. The question goes without saying – What is C-R-A-P-I.

An organization is C-R-A-P-I when it has put in place effective and efficient systems relating to the following areas

·        Corporate Law

·        Risk Management

·        Accounting and Finance Management

·        Project and Strategic Management

·        Internal Controls

Organizations who have shown and demonstrated effective and efficient C-R-A-P-I-ness have proven to be the key driver, so I ask that such organizations do not relent or chill on the C-R-A-P, rather they should make their systems C-R-A-P-I!!!

The substance behind such demonstration is C-R-A-P-I, and this is a groundbreaking portrait of the essence, vision and core values of an organization.

It is expected that organizations must continually seek to strike a balance between generating revenue and promoting leadership and good governance while educating staff on the world’s most reliable scale to measuring a prosperous and sustainable company - Corporate Governance, Risk Management, Corporate Responsibility and MOST IMPORTANTLY COMPLIANCE.

As we all know perception is the reality in the eyes of every stakeholder. As such according to Mckinsey; “investors will pay a premium for the stock of well-governed companies”.

This is for obvious reasons, as organizations have to attract and retain stakeholders as well as obtain financing to meet funding needs whilst demonstrating that these funds will not be squandered but used responsibly to create consistent wealth and returns to investors and all other stakeholders.

 Defining F-A-R-T

In the world, today, most especially in regions where confidence is bridged without consideration of perception in regards to transparency, it is assumed that – Cash rules.

However, in the pursuit of a more stable and sustainable future, the world would rather an environment where people F-A-R-T so hard that the entire globe perceives in its atmosphere;

-         Hope

-         Trust

-         Fairness

-         Equality

-         Accountability

-         Transparency

-         and above all a Sustainable Environment for future generation

FART is an acronym for the following

·        FAIRNESS

·        ACCOUNTABILITY

·        RESPONSIBILITY

·        TRANSPARENCY

which is essential for business and governmental sustainability considering the world today is a global village.

This feeling of warmness that is expected to prevail has begun its journey as relevant regulatory bodies that govern the affairs of nations and their wealth and large institutional investors begin to put in place initiatives to drive the foregoing. 

In recent times, entities have been made to pay fines and compensations for some of their unethical behaviors. These settlements run into six and/or seven digits and beyond, driving some of these entities into debt and a times bankruptcy, for lack of F-A-R-T-ing.

As such as we continually experience the emergence of GRC in an emerging economy like Nigeria it is important that as responsible and sustainable businesses we strive to create C-R-A-P-I F-A-R-T systems in order to provide an enabling environment for becoming players in the global markets within the global village.

C-R-A-P-I F-A-R-T

GRC though a top-bottom system of governance should take on a participatory approach on all levels, ensuring that every stake/stockholder - F-A-R-T as they carry out their C-R-A-P-I (Corporate law, Risk Management, Accounting, Project strategy & internal audit) TASKS.

The past few years have been a piloting stage for the international market in combating lack of good GRC and corporate responsibility in systems, especially as it relates to ensuring key business operations being implemented in line with internal and external regulatory standards - Corporate law, Risk management, Accounting/Finance principles, Project/Strategic management and Internal control (C-R-A-P-I).

Members of an organization (Employees and Management) have been made to understand that these C-R-A-P-I operations must function effectively and efficiently to ensure that the working environment within the Company is saturated with an atmosphere and/or culture of Fairness, Accountability, Responsibility and Transparency-  F-A-R-T. 

This is because the transition from piloting to full scale operation has evolved as businesses are now being publicly scrutinized and as such mandated to give account of their operations (Transparency) as well as made responsible for non-compliance.

As we continue to journey into the realm of international/global acceptance/applied strategy, it is worthy of note that certain concerns in relation to balancing ethical behavior and profit making in the volatile society we find ourselves, have and will continually play a major role in directing the GRC of our businesses and countries, and the output towards ensuring we remain sustainable.

GRC is the key to sustainability, failure to live up to commitments attract consequences. This is because business is no longer only about the numbers, but the impact of poor GRC standards on the numbers and the brand of businesses. 

Ignorance of the law is no excuse!

Sustain an innovative idea today, embrace good GRC and sound Corporate Responsibility activities.

As we enjoy this write up, I look forward to the book publication and release early next year, in the meantime, let it be stated that “time is everything”. Tick tock says the clock – Make a C-R-A-P-I – F-A-R-T now while you still can!!