Prioritise human resources management

It is now widely recognised that performance in organisations is enhanced through the development of sound corporate governance processes and effective management of its human resources.
Effective human resources management includes putting in place corporate ethics management processes that mould an ethical and more productive worker.
Given this imperative, corporations should give eminence to the interrelationship between corporate governance and human resources management (HRM) to ensure HRM outcomes such as staff motivation and job satisfaction support the achievement of set organisational goals.
Adrian Cadbury (1992) defines corporate governance as a system by which companies are directed and controlled.
Boards of directors are responsible for the governance of their companies by setting the company’s strategic goals, providing leadership, supervising management, and reporting to shareholders on their stewardship.
Human resources management, on the other hand, is the organisational function that deals with issues related to people such as hiring, compensation, performance management, organisational development, health and safety, employee motivation, training and labour relations.
Over time, the HRM discipline has revolved to become of strategic value to organisations, be they for-profit, or not-for-profit.
The new strategic role has seen HRM moving up the agenda of many board meetings, and emphasis today has now moved to HRM metrics and measurements to irrefutably demonstrate its critical corporate value.
The clamouring for good corporate governance in the country has clearly reached fever pitch, and many business leaders now realise that there is no short cut to business success except through sound corporate governance processes.
While corporate governance touches on an array of issues that include auditing, IT, risk, etc, the link between corporate governance and HRM strategies is increasingly superimposing its prominence within the governance jigsaw puzzle.
This is understandably so because a firm cannot address the issue of corporate governance without giving deep thought to the overall company HRM strategy.
The vitality of the corporate governance/HRM link is thus derived from the fact that organisations are ultimately dependent on the quality of their human resource in terms of skills, competencies and levels of integrity, to achieve set organisational goals and objectives.
In other words, this means that when corporate governance processes are weak, HRM outcomes will include a poorly motivated staff, widespread unethical workplace behaviour, high staff turnover, a poor industrial relations climate, etc.
The logic of the matter is that, sound corporate governance leads to better HRM outcomes, which will subsequently result in greater organisational performance and profitability.
Many organisations now recognise the importance of greater worker involvement in company decision-making processes as propounded by the democratic style of management, and because of this, HRM has become an increasingly important component of organisational strategy.
It therefore follows that the consummation of governance processes can be made more effective when staff input finds its way into the boardroom as this will dovetail with the known corporate governance principle of fostering a proactive approach to operational efficiency by cascading responsibility and accountability for decision-making to management.
Such a governance approach not only develops a self-regulated individual in the workplace, but also inspires employees to look beyond their individual needs to achieve more for the organisation.
The benefits of a corporate governance/HRM link can also be maximised by ensuring that equity holders in the organisation are frequently consulted in shaping HRM practices.
Through a well-managed workforce that has a feel of the board’s presence in their day-to-day workplace activities through empowering corporate governance processes, company production levels are bound to increase.
Since businesses have now become highly competitive, emphasis is shifting to securing competitive advantage through intangible factors such as HRM and ethics management programmes.
Because of its strategic value, pitching up the HRM at the top of corporate governance agenda must become an “act of faith” for every responsible organisation.
Companies need to demystify corporate governance processes by making sure the phenomenon is discussed freely in company corridors just as much as HRM practices are talked about, as this will go a long way in securing employee buy-in to company strategies.