Before talking about knowledge governance, which this article addresses, it should be noted that any transformation and transition must, from scratch, be surrounded by many difficulties and randomness, and this statement applies to the transition from the previous capitalist economic systems to a knowledge-based economy. Between this transformation, with economic changes and new interactions, many institutions have experienced a great deal of capital fluctuation, resulting in mismanagement and widespread corruption due to misperceptions and, consequently, economic collapses in major international businesses, including a lack of transparency in all matters relating to financial lists and accounting procedures.
Because there are those who refuse to pay the bill of corruption, mismanagement and the absence of a culture of knowledge economy, there has been an urgent need to reformulate economic strategies, under this new concept of knowledge economy, so that information can be available on the expected risks of this new approach, while integrating with the approach of applying institutional governance, so that an appropriate institutional framework can be established and formulated, emphasizing the existence of binding rules and structures for all parties in the economic process.
With the transformation process, many houses of consulting management expertise have begun to produce and market knowledge management programmes, and developed them within businesses, so various organizations have provided funding for projects related to knowledge-economic management.
In the face of this, several definitions of governance have emerged via these specialized advisory houses, including IFC, ones that say what “is the system through which companies are managed and controlled.” The OECD defines it as “a set of relationships between the company’s administrators, the board of directors, shareholders and other shareholders.” In other words, governance means the system, i.e., the existence of systems governing relationships between the core parties that affect performance, as well as the elements of strengthening the institution in the long-run and determining manageability and responsibility.
The concept of knowledge governance has gained attention in the business sector, and it has been adopted because of its modern changes and developments, both in terms of blame and technology, and therefore it has been necessary to integrate knowledge and the economy, so that there can be a knowledge economy based on taking over economic knowledge within enterprises to maintain competitive advantage and follow best practices. The era we are living in is essentially comprehensive of all realities, namely change and transformation, and therefore ideas, systems and inputs must be put forward. Putting the old aside, and absorbing the realities of the stage and the observations of the future, we can find a place in this new world, i.e., reformulate cognitive and economic strategies according to future visions.
The most important governing factors that can affect competitiveness and production indicators are the recognition and response to the hallmarks of the information and knowledge age, the challenges, and the prospects, of scientific and technological progress, dealing with the technological revolution, the information and knowledge revolution, and the potential for regional action and international cooperation.
Supporting scientific and technological research processes can be the beginning of the way to deal with these governing factors by mobilizing the necessary resources, particularly finance and management, and by making an effort by which the hallmarks of the era of the knowledge economy can be dealt with to achieve added value in the component of goods and services, and increase investments in intellectual output, namely research and innovation in various economic mechanisms.
The importance of establishing corporate governance, which is concerned with the broader concept of how to establish a structure that allows for a great deal of freedom under the rule of law, including fundamental changes, adopting international standards of transparency, clarity and accuracy in financial statements, requires basic legislation and adjustments, changing management strategies to establish an appropriate institutional framework, including justice and transparency in transactions, the right to accountability to address corruption, then protecting shareholders and maximizing returns, and creating management structures with which management can be held accountable to shareholders, while ensuring a review of financial performance, the integration of accounting and audit systems, and the development of strategies, plus increased performance efficiency and supervision of the social responsibility of the institution, in the light of governance legislation.
Therefore, the key elements of supporting the proper application of governance within institutions will clearly be strategic objectives, ensuring the efficiency of board members, understanding their role in the governance process, and identifying responsibilities. There is no doubt that knowledge becomes economically useless without a strategic framework for the right to hire and exploit opportunities, hence the role of innovation as a key form of strategic use of knowledge, requiring adherence to governance legislation to secure and improve the investment climate to gain investor confidence.
The focus of linking the knowledge economy with institutional governance is the need to develop strategies with a vision for the future, to encourage innovation for harmonious economic development, adapting to transformations, knowledge production, institutional construction reform, combating bureaucratic performance to improve performance efficiency, and to develop mechanisms for the implementation of governance, so that its elements become anti-corruption, consistent with the rapid development of knowledge, and to take into account the impact of the knowledge revolution on economic, political and cultural conditions, as well as the internal and external environment, to determine the status and developments of the strategic conduct of the working unit, taking into account integrity and justice, to achieve competitive advantage, through responsibility. This includes the acceptance of accountability and transparency.
The realization of the link between the knowledge economy and the governance of institutions is achieved through several mechanisms, including the mechanism of audit committees, activating their full role, which helps good delivery, avoiding malpractice, thereby preserving the integrity and credibility of financial statements, and achieving the desired economic results… And to talk the rest.
Author : Manahel Thabet
Published February 05, 2018
Al Bayan Newspaper