There are many reasons to adopt benefits governance. Among them are regulatory compliance, risk mitigation, organisational consistency, economies of scale, enhanced communication and sharing best practices. But many companies are now asking not why, but what. What is good governance?
First and foremost, good governance is dynamic. It evolves and reacts to its environment. Governance structures must constantly adapt to meet fluctuating demands.
Structurally, good governance has two arms:
One is foundational, and the other is strategic. The foundational arm is about risk mitigation and managing the hazards inherent in plans and programs around the world. Those risks are threefold: people, financial and legal. From a people perspective, companies need to grapple with their ability to attract, retain and motivate a global workforce. Financial risks involve the expense of having plans in multiple regions and the liabilities associated with those plans. Legal risks are about compliance with local laws and regulations.
Strategy, the second arm of good governance, allows organisations to gain a number of key advantages. When companies are better able to deploy a global strategy, they can more easily facilitate the movement of talent globally and can better leverage their global size to reduce costs through economies of scale.
Top five least common governance practices:
- Undertaking regular training/education of management responsible for compensation and benefit plans throughout the world
- Having a web-based database that houses information on all compensation and benefit plans globally
- Having plan documents and financial information in a condensed format to meet stringent due diligence from a potential purchaser
- Having a process for integrating newly acquired companies into the governance structure
- Actively managing benefit financing strategy (captives & pooling) to maximize savings and synergies of coverage
Willis Towers Watson can support your business to control costs, manage scheme design, audit and benchmark current provision against selected peers and create an overall governance framework to govern your benefit arrangements.
Our toolkit includes:
- Strategic review of benefits spend
- Alternative delivery models, new products and services
- Understanding and monitoring refinancing / alternative financing models
- Reviewing workforce dynamics, characteristics and segmentation
- Undertaking benefits audits