When Sarbanes-Oxley passed in 2002, the global benefits management landscape in the United States altered dramatically. So much so that the vernacular changed. Before Sarbanes-Oxley or SOX, multinational corporations (MNCs) talked about global benefits management. Since then, MNCs have been concerned with global benefits governance.
Some might consider “governance” to be roughly equivalent to “management,” but the difference is important. Management is an act — supervising, watching and directing. Governance, on the other hand, is a process involving strategy, organizational structure and the distribution of power. It takes into consideration institutions, laws and culture.
Quite simply, governance is much more complex and difficult than management. And as the markets tumbled during the recent economic crisis, and significant inherent risks in benefit plans were once again exposed, many companies saw a need to re-examine their global governance structures.
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