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IOL News
3 days ago
- Business
- IOL News
Governing innovation: enabling disruption without losing control
Governance is not about constraining creativity but stewarding it wisely. A board that governs innovation well does not seek to eliminate uncertainty, but to navigate it with foresight and discipline. Image: AI Lab By Nqobani Mzizi In this modern era of unrelenting disruption, boards are increasingly required to go beyond merely overseeing performance. They must also enable innovation. Technologies like generative AI, ESG-linked investment models, and platform-based business strategies are reshaping industries. These changes demand not only operational adjustments but also bold strategic reinvention. Yet many boards are grappling with how to respond to innovation strategically, without compromising their core governance responsibilities. This uncharted terrain is testing the resolve of modern boards. Traditional governance models were built for stability, predictability and control. Innovation, in contrast, is uncertain, iterative, and non-linear. It often involves experimentation, ambiguity, and sometimes failure. For boards used to structured reports, clear metrics, and linear plans, this unpredictability can seem risky. Yet paradoxically, resisting innovation presents a greater threat than any of those listed on the strategic or operational risk registers. As digital disruption and societal shifts accelerate, the board's ability to cultivate innovation has become essential to long-term value creation. A common governance blind spot is to relegate innovation to a management function, with limited strategic involvement from the board. The assumption that management is inherently more equipped to drive innovation can be detrimental. This gap may stem from a lack of technological fluency, unclear mandates or discomfort with the intangible nature of innovation. The result is often a lag: boards are briefed on innovations after the fact, rather than helping to shape direction, assess risk appetite or define success. This reactive posture creates a widening governance gap, one that threatens not only agility but long-term relevance. The 2023 McKinsey Global Board Survey reveals a troubling paradox: while 87% of directors cite innovation as a top three priority, fewer than 20% believe their board governs it effectively. This is more than a governance failure; it signals a countdown to organisational irrelevance. Boards must now reconsider what it truly means to govern innovation. Governing innovation does not mean micromanaging trial and discovery. Instead, it means creating the conditions under which innovation can thrive ethically, strategically and responsibly. It involves asking the right questions: does the board have visibility into the innovation pipeline? Is there alignment between novel initiatives and long-term strategy? Are ethical risks, data governance and unintended consequences being considered? Today's stakeholders, whether customers, investors, regulators or communities, expect organisations to innovate responsibly. Boards must ensure that these efforts are not only profitable but also purposeful. King IV offers helpful guidance. Principle 4 speaks to the board's responsibility to appreciate that strategy, risk, performance and sustainability are inseparable. This includes nurturing forward-looking capability not as a standalone concept, but as a core element of strategy. Principle 6 further calls on the governing body to ensure that risk governance enables rather than stifles opportunity, including calculated risk-taking in pursuit of innovation. Boardrooms that successfully navigate innovation often exhibit a shift in culture: from risk aversion to constructive inquiry. They influence disruptive growth strategy, empower management to explore, remain informed, and maintain clarity on governance boundaries. They create healthy space for emergent thinking, scenario planning, and strategic 'what ifs'. They also recognise that not every new idea will succeed, and that setbacks, when properly governed, can become valuable sources of learning rather than liability. Sanlam's board didn't just approve partnerships; they embedded innovation into governance. As one of Africa's largest insurers, the company has, since 2021, actively expanded into fintech and inclusive insurance models across emerging markets. Notable recent initiatives include strategic partnerships launched in 2023 with digital platforms in India and Africa to deliver tailored insurance products to underinsured populations. The board's commitment to strategic modernisation is evident in its approach to ecosystem partnerships and sustainable growth. Similarly, Rain's digital-first disruption required its board to rethink traditional governance. Since its 2018 launch as South Africa's data-only mobile network, the company's bold strategy demanded governance structures that could support rapid scaling. The board implemented oversight enhancements in 2022 that strengthened both customer trust and technological agility, proving that disruptive growth and strong governance aren't mutually exclusive. Effective governance of innovation may require boards to rethink their own composition. Do directors bring diverse perspectives, digital fluency, or entrepreneurial experience? Are there mechanisms for onboarding emerging expertise without disrupting governance coherence?Increasingly, progressive boards are including innovation experts on committees, engaging external advisors, or hosting learning sessions with disruptors to sharpen their own lens. Boards should elevate innovation to a standing agenda item to ensure consistent strategic attention. They can also establish dedicated innovation or technology committees tasked with monitoring emerging trends and risks. These committees track tangible innovation metrics such as percentage of revenue from new products, rate of project progression through innovation pipelines, and measures of customer adoption or satisfaction linked to novel offerings. Dashboards integrating these metrics into board reports enable timely interventions and strategic alignment. Finally, for high-impact innovation bets, boards may consider engaging independent panels or conducting peer reviews to provide fresh perspectives, challenge assumptions and strengthen decision quality. Boards must also examine whether their own rhythms support adaptability and reinvention. An annual strategy retreat is not sufficient. Agile governance requires periodic check-ins on emerging initiatives and a willingness to evolve oversight models in step with emerging realities. The tension between innovation and control is often overstated. Governance is not about constraining creativity but stewarding it wisely. A board that governs innovation well does not seek to eliminate uncertainty, but to navigate it with foresight and discipline. To govern innovation is to ensure that risk and renewal are not seen as trade-offs, but as twin responsibilities of a future-fit board. This requires courage, curiosity and humility; attributes not always associated with traditional governance but essential in the age of transformation. To remain future-fit, boards must ask: Are we fostering innovation or merely observing it? Do our governance processes support creative exploration, or stifle it? Is our board equipped to interrogate the future, not just report on the past? Are we balancing risk management with opportunity stewardship? Ultimately, thriving organisations will be those governed by boards that treat innovation not as a threat to control, but as a catalyst for renewal, turning uncertainty into lasting value through foresight, adaptability and curiosity. Nqobani Mzizi is a Professional Accountant (SA), (IoDSA) and an Academic. Image: Supplied * Nqobani Mzizi is a Professional Accountant (SA), (IoDSA) and an Academic. ** The views expressed do not necessarily reflect the views of IOL or Independent Media. BUSINESS REPORT
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Business Standard
7 days ago
- Business
- Business Standard
Sebi proposes stricter norms for green bond reviewers to curb conflicts
Sebi on Friday said it has proposed to tighten the norms to appoint independent third-party reviewers or certifiers for green debt securities to align them with requirements for other ESG-linked bonds. In a draft circular, Sebi said that the current norms for green bonds, introduced in February 2023, lack detailed requirements around reviewer independence, conflict of interest mitigation, and disclosure standards that are now in place for other ESG-linked securities under a June 2025 circular. The regulator's latest proposal seeks public comments on a revised framework that would bring parity by incorporating comprehensive criteria for third-party certifiers of green bonds on non-convertible securities. Under the proposed norms, issuers of green debt securities will need to appoint reviewers who are independent of their management, directors, and key managerial personnel. These reviewers will be remunerated in a way that prevents any conflicts of interest and possess relevant expertise in assessing ESG debt securities. The scope of the review conducted by the independent third-party reviewer/ certifier will be specified in the offer document, and the reviewer may provide second-party opinions, verifications, certifications, or ESG scores. The markets watchdog has also allowed Sebi-registered ESG rating providers to act as reviewers, subject to the same conditions. The Securities and Exchange Board of India (Sebi) has invited public comments on the draft circular till August 21.
Time of India
7 days ago
- Business
- Time of India
Sebi proposes tighter norms for green bond third-party reviewers
Sebi on Friday said it has proposed to tighten the norms to appoint independent third-party reviewers or certifiers for green debt securities to align them with requirements for other ESG-linked bonds . In a draft circular, Sebi said that the current norms for green bonds , introduced in February 2023, lack detailed requirements around reviewer independence, conflict of interest mitigation, and disclosure standards that are now in place for other ESG-linked securities under a June 2025 circular. Explore courses from Top Institutes in Please select course: Select a Course Category Degree Finance Leadership Artificial Intelligence Operations Management Public Policy CXO Design Thinking Others PGDM Data Analytics MBA Cybersecurity healthcare Project Management MCA Digital Marketing others Technology Data Science Product Management Data Science Management Healthcare Skills you'll gain: Data-Driven Decision-Making Strategic Leadership and Transformation Global Business Acumen Comprehensive Business Expertise Duration: 2 Years University of Western Australia UWA Global MBA Starts on Jun 28, 2024 Get Details by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 15 most beautiful women in the world Undo The regulator's latest proposal seeks public comments on a revised framework that would bring parity by incorporating comprehensive criteria for third-party certifiers of green bonds on non-convertible securities. Bonds Corner Powered By Sebi proposes tighter norms for green bond third-party reviewers Sebi is proposing stricter regulations for the appointment of independent third-party reviewers of green debt securities. This move aims to align the norms with those applicable to other ESG-linked bonds, addressing gaps in reviewer independence and conflict of interest mitigation. The revised framework seeks to establish comprehensive criteria for certifiers of green bonds, ensuring greater transparency and credibility. BIAL completes India's largest unlisted bond issuance in the airport sector, raising Rs 9,000 crore Long-dated euro zone bonds sell off; Trump slaps on tariffs Trump's tariffs hit India: What it means for GDP, debt and equity markets GMR Airports finalises details of its biggest bond issue: Report Browse all Bonds News with Under the proposed norms, issuers of green debt securities will need to appoint reviewers who are independent of their management, directors, and key managerial personnel. These reviewers will be remunerated in a way that prevents any conflicts of interest and possess relevant expertise in assessing ESG debt securities. The scope of the review conducted by the independent third-party reviewer/ certifier will be specified in the offer document, and the reviewer may provide second-party opinions, verifications, certifications, or ESG scores. Live Events The markets watchdog has also allowed Sebi-registered ESG rating providers to act as reviewers, subject to the same conditions. The Securities and Exchange Board of India (Sebi) has invited public comments on the draft circular till August 21.
News18
7 days ago
- Business
- News18
Sebi proposes tighter norms for green bond third-party reviewers
New Delhi, Aug 1 (PTI) Sebi on Friday said it has proposed to tighten the norms to appoint independent third-party reviewers or certifiers for green debt securities to align them with requirements for other ESG-linked bonds. In a draft circular, Sebi said that the current norms for green bonds, introduced in February 2023, lack detailed requirements around reviewer independence, conflict of interest mitigation, and disclosure standards that are now in place for other ESG-linked securities under a June 2025 circular. The regulator's latest proposal seeks public comments on a revised framework that would bring parity by incorporating comprehensive criteria for third-party certifiers of green bonds on non-convertible securities. Under the proposed norms, issuers of green debt securities will need to appoint reviewers who are independent of their management, directors, and key managerial personnel. These reviewers will be remunerated in a way that prevents any conflicts of interest and possess relevant expertise in assessing ESG debt securities. The scope of the review conducted by the independent third-party reviewer/ certifier will be specified in the offer document, and the reviewer may provide second-party opinions, verifications, certifications, or ESG scores. The markets watchdog has also allowed Sebi-registered ESG rating providers to act as reviewers, subject to the same conditions. The Securities and Exchange Board of India (Sebi) has invited public comments on the draft circular till August 21. PTI HG HG BAL BAL (This story has not been edited by News18 staff and is published from a syndicated news agency feed - PTI) view comments First Published: August 01, 2025, 21:45 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
New Straits Times
29-07-2025
- Business
- New Straits Times
Global ESG sukuk poised to top US$60bil by 2026
KUALA LUMPUR: Global environmental, social, and governance (ESG) sukuk is likely to surpass US$60 billion in outstanding value by the end of 2026, according to Fitch Ratings. The rating agency said the growth reflects its expanding role in funding sustainability initiatives, attracting a diverse investor base, and benefiting from ongoing regulatory reforms. It noted that just over 40 per cent of all emerging-market ESG US dollar debt issued in the first half of 2025 (1H25), excluding China, was in sukuk format, with the rest in bonds. However, Fitch Ratings expects ESG sukuk issuance to moderate in the third quarter of 2025 (3Q25) due to seasonal summer trends in key markets, mirroring broader sukuk market patterns, before rebounding in 4Q25. Its global head of Islamic Finance, Bashar Al Natoor, said Fitch-rated ESG sukuk has been resilient to the Middle East geopolitical conflict. "All issuers have Stable Outlooks, and almost all are investment-grade. There were no defaults. "ESG sukuk are now increasingly tapped by both Islamic and ESG-focused investors, supporting funding diversification and helping issuers meet their sustainability targets," he added. According to Fitch Ratings, over 10 per cent of global dollar sukuk outstanding are ESG-linked. Global ESG sukuk increased by just over 12 per cent year-on-year (YoY) in 1H25 to about US$50 billion equivalent outstanding. The Gulf Cooperation Council (GCC) accounted for over half of this, led by Saudi Arabia and the UAE, while Malaysia and Indonesia together represented 40 per cent. Fitch Ratings covers about three-quarters of the global US dollar ESG sukuk market, the vast majority of which is senior unsecured, with around one per cent being subordinated. Key listing venues for dollar-denominated ESG sukuk include the stock exchanges in Frankfurt, London, Stuttgart, and Nasdaq Dubai. Issuer diversity increased notably in the second quarter of 2025, with examples such as UAE-based Omniyat Holdings Ltd's debut green sukuk, rated 'BB-', and Pakistan's first rupee-denominated sovereign green sukuk, which was unrated. Meanwhile, Saudi Arabia's Capital Market Authority introduced new guidelines for green, social, sustainability, and sustainability-linked debt instruments. However, it said geopolitical risks, evolving Shariah interpretations, oil price volatility, and greenwashing concerns may weigh on future ESG sukuk issuance.
