Ananya Malhotra
Corporate governance is the pivotal system that directs and controls companies, with boards of directors bearing the responsibility for governance. Shareholders play a crucial role in governance by appointing directors and auditors and ensuring the implementation of an appropriate governance structure.
The post-pandemic era has brought significant changes to corporate governance. Many companies have shifted their operations online, making remote work the new norm. This shift has increased convenience for employees, saving them time on commutes and allowing them to work more efficiently from home. Major company meetings, such as board meetings, appointments, conferences, and seminars, now frequently take place virtually. This transition to online operations has benefits for directors and shareholders, as they can attend meetings from anywhere in the world, especially for urgent matters. Additionally, the move to remote work has contributed to the Sustainable Development Goals by saving electricity and reducing deforestation, as companies no longer require additional office space.
The COVID-19 pandemic has transformed the way we work, with working from home becoming a major trend and a potential permanent feature in the corporate world. While this shift has brought many benefits, it has also raised specific issues in corporate governance. Remote work has led to transformation and legal challenges that organizations need to address as we move into the post-pandemic era.
Let’s consider the disadvantages. Firstly, newly recruited employees lack exposure to the practical corporate world, which is essential for building connections and establishing a solid career. Because of this lack of exposure, there is limited opportunity for learning, hindering their personal growth and potential. Additionally, they may fail to exhibit professionalism, a key requirement in any profession. Working from home can lead to lethargy, affecting their work profile and prospects. As they are not physically present in the corporation, they may be unaware of important developments, reducing their competitiveness and drive to excel for a better future.
When it comes to BOD meetings, all directors must dedicate themselves to proper deliberation and discussion of important matters that can impact the company. The serious environment that is present in face-to-face meetings is often lacking in online meetings due to potential internet issues and the possibility of attending from less professional settings. This lack of seriousness can ultimately affect the company. Additionally, conducting interviews online can make it difficult to accurately assess an individual’s personality, which is essential for making good hiring decisions as the employee will be a core part of the company.
Communication challenges: The shift to remote work can bring about communication challenges, as employees may have to rely more on digital tools and might struggle with misinterpretation and the absence of non-verbal cues. Effective communication is fundamental for good governance, but remote work can lead to issues as employees are not physically present with one another. Consequently, all communication occurs virtually, which may result in errors when conveying specific assignments to individuals. To tackle these obstacles, companies should work on establishing effective communication within the organization by making use of technology for seamless collaboration. This involves investing in dependable communication tools and setting up clear guidelines for how communications should be conducted.
Diminished Team Cohesion: Remote work inevitably leads to diminished team cohesion as employees often feel isolated and disconnected from their colleagues. This profoundly hampers team bonding and collaboration, thereby detrimentally impacting both the professional development of employees and the overall success of the company. It is imperative to address these challenges promptly and effectively, as the contribution of every single employee is crucial to the company’s success.
Cyber Security Concerns: Corporations may be exposed to security concerns when employees work remotely because sensitive information is more susceptible to hacking and data breaches. Nowadays, there are additional cybersecurity concerns associated with working remotely because most employees access company systems via unreliable, inaccurate, and diverse sources. When preparing for cyber security, companies that permit employees to work from home are worried about protecting their information assets and maintaining objectivity. Cyber security issues may be resolved when businesses use cutting-edge security solutions including secure virtual private networks (VPNs), multi-factor authentication, and regular staff training on spotting and thwarting cyber threats.
Although this shift to Remote work has brought several advantages, it has also posed specific issues in the field of corporate governance. Therefore companies need to formulate such policies that will help tackle the problems arising from the shift to remote work culture and will ultimately help the company to reach new strides of success.
(The author is 3rd year law student, Christ University Bangalore)
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