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Aneal Maharaj, Group Finance Director of the ANSA McAL Group of Companies, has described governance as the glue that binds all aspects of an organisation responsible for performance. “It is the glue that binds the performance machinery so that an organisation can deliver its stated targets and along the way its people are successful, business outcomes are delivered in an environmentally safe manner, and communities which the company operates are impacted positively,” he said.
Maharaj was speaking at a breakfast meeting hosted by ACCA on Improving Company Performance Through Building a Risk Challenge at the Trinidad Hilton and Conference Centre. A Fellow of the Chartered Association of Certified Accountants (FCCA), Maharaj, who has more than 20 years experience, said while governance binds on one hand, risk is a factor that causes governance to unstick. He said not having a system in place to manage risk can result in catastrophe.
“Risk is the probability that an event will occur that will cause a lack of predictability in the business outcome. “We all have plans, we all have budgets, we expect a level of predictability. Risk is that which causes something to unstick. “The notion that risk is bad is completely flawed. Risk in many instances is good. “Risk is what propels an organisation that wakes up the management team so it starts to innovate new products and services to stay ahead of the competition.”
Referring to the ANSA McAL Group, Maharaj said good governance is what brings the group of companies together and the board has a role to play in good governance, with the managing director taking the lead. “The managing director is first and foremost the most accountable person in an organisation, so each company has a managing director. “The managing director is part of the board of the subsidiary company.
“The board is shared by sector heads and the sector reports to the executive committee which reports to the parent board.” Maharaj added: “The managing director is at the subsidiary level, and reports to the sector head as the chairperson. In my humble view the traditional board is not designed to assess risk.
“In our environment (the ANSA McAL group) the managing director takes ownership of risk, we put top quality people close to the revenue streams, close to where the risks are—risk is not necessarily head office, except if a bad decision is made. “The risk is in the frontline and that is where it has to be measured and monitored.”
Story by: Nadaleen Singh
Published: Monday 1st December, 2014
Trinidad Guardian Newspapers
Page A16, Business