Structuring and Organizing Financial Reporting Governance Using Metamodeling Approach

I. Introduction

Financial Reporting Governance (FRG) involves processes that guarantee financial reporting is accurate, transparent, and compliant with regulatory standards. Numerous models, policies, procedures, frameworks, and processes have been developed to organize, manage, structure, share, and reuse knowledge within the FRG domain from various perspectives. However, these existing approaches are typically designed for specific scenarios, resulting in a gap for a unified abstract model that comprehensively organizes and structures FRG domain knowledge [1].

The main contribution of this study is the development of FRGM. This metamodel provides a high-level, structured representation of the financial reporting governance process, encompassing key components such as roles, responsibilities, workflows, and decision-making hierarchies. By using a metamodeling approach, the FRGM enhances clarity and communication, facilitates better alignment among stakeholders, and streamline processes, leading to improved adherence to governance standards. The framework’s effectiveness is demonstrated through a real-world case study, highlighting its ability to identify inefficiencies, mitigate risks, and promote a culture of accountability.

The novelty of this research lies in its application of metamodeling to the complex domain of financial reporting governance. Unlike existing frameworks that often lack a structured, comprehensive approach, the FRGM offers a systematic and visual representation of the entire process. This allows for a more thorough analysis of interdependence and relationships between different governance components, enabling organizations to identify potential risks and areas for improvement. The use of metamodeling also facilitates easier documentation of processes, demonstrates compliance with regulations, and allows for greater adaptability to changing regulatory and technological landscapes. Thus, this study should answer these two questions:

What are the advantages and disadvantages of the current financial reporting governance models and frameworks?

Does the FRG domain have a structured and organized model to effectively represent its domain knowledge?

This paper is structured as follows: Section 2 presents related works, Section 3 describes the model-driven engineering methodology, Section 4 outlines the development process, Section 5 implements the developed FRGM, Section 6 presents findings and discussion, and Section 7 concludes with future work.

II. Related Works

Several works have been proposed in the literature for the FRG domain. This section discusses the advantages, disadvantages, methodologies, output and the contribution of the existing FRG works. For example, the incident response framework articulates the primary purpose of an integrated report as elucidating how an organization generates, sustains, or diminishes value over time to providers of financial capital. Consequently, it encompasses pertinent financial and non-financial information, offering a comprehensive view of the organization’s performance and strategic direction [2]. A risk management framework (RMF) is a set of guidelines and practices that help organizations identify, assess, and reduce risks. RMFs can help organizations protect themselves from cybersecurity threats, improve customer trust, and grow their business [3]. An Internal Audit Framework articulates the mission and goals of the internal audit function, highlighting its critical role in enhancing organizational governance and risk management. It also delineates the methods and guidelines that internal auditors follow to deliver objective and impartial evaluations of the organization’s processes and controls [4]. A data governance framework establishes a unified set of rules and procedures for the collection, storage, and utilization of data. Despite the continually expanding volume of data, this framework facilitates the streamlining and scaling of core data governance practices while ensuring adherence to policy and regulatory compliance requirements [5]. The COSO Framework is a comprehensive system designed to implement internal controls that are seamlessly integrated into an organization’s business processes [6]. Together, these controls offer reasonable assurance that the organization is operating ethically and transparently while adhering to established industry standards. COBIT (Control Objectives for Information and Related Technology) assists organizations in addressing business challenges related to regulatory compliance, risk management, and aligning IT strategy with broader organizational objectives [7]. International Financial Reporting Standards (IFRS) are a comprehensive set of accounting guidelines designed for the financial statements of public companies. These standards aim to ensure that financial statements are consistent, transparent, and easily comparable across the globe, facilitating greater understanding and trust among investors and other stakeholders [8]. The International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB). Meanwhile, the Sarbanes-Oxley Act (SOX) is a U.S. federal law designed to regulate corporate financial reporting and record-keeping practices, ensuring accuracy and accountability in the preparation and disclosure of financial information [9]. The authors in [10] proposed a corporate governance structure that comprises seven interrelated mechanisms: oversight, managerial, compliance, audit, advisory, assurance, and monitoring functions. This comprehensive framework is designed to enhance organizational accountability and effectiveness. The well-balanced functioning of these seven interrelated functions can produce responsible corporate governance, reliable financial reports, and credible audit services. Based on the authors in [11], financial reporting can play a crucial role in reducing information asymmetries that exist between managers and both outside directors and shareholders, which are detrimental to the effectiveness of management. The authors in [12] examined the empirical and archival literature on Chinese corporate governance and financial reporting quality. However, despite the abundance of surveys on Chinese corporate governance, this study observed that there are no comprehensive surveys of corporate governance and financial reporting quality literature, so we have undertaken a systematic review. The authors in [13] examined the effectiveness of apparatus competence and internal control on financial reports and their impact on government governance. The study examined 70 working units and area devices in seven local governments in Jawa Tengah Province, Indonesia, as part of their research. The authors in [14] attempted to fill the gap by identifying specific characteristics of corporate governance that can contribute to reducing the possibility of fraud involving non-financial reporting that could assist in reducing the risk. The researchers in [15] examined the relationship between corporate governance and the quality of financial reporting, offering a thorough analysis of their findings on this important topic. Their study highlights key correlations and insights that underscore the influence of corporate governance practices on the integrity and reliability of financial reporting. The authors of [16] examined whether corporate governance components (board size, audit committee, board independence, non-audit service, multiple directorships) are related to instances of fraudulent financial reporting. The authors in [17] we examine the evolution of corporate governance in Japan since the 1990s, focusing specifically on financial reporting as a fundamental attribute of effective governance. As well as examining Japanese accounting practices, disclosure requirements, and reporting standards, the book presents an overview of the legal, institutional, and stakeholder dimensions of governance. In the paper, the authors argue that accurate financial reporting is essential to good corporate governance. According to the [18], various corporate governance indicators influence risk management practices differently at Islamic financial institutions compared to conventional financial institutions. This highlights the distinct approaches and considerations each type of institution employs in managing risk. Moreover, the study examined how institutional quality modifies practices’ impact on Pakistan’s financial institutions by moderating their impacts. The authors in [19] explored the intricate relationship between integrated reporting, corporate governance, and financial sustainability within the context of Islamic banking. The authors in [20] examined the intricate interplay between integrated reporting, corporate governance, and financial sustainability within the Islamic banking framework. Their research investigates how these elements interact and collectively enhance the effectiveness and ethical integrity of financial practices in Islamic financial institutions. The authors in [21] explained the concept of stories in organizations, discuss the characteristics and advantages of storytelling, and illustrate how stories can be created in organizations. A study reported in [22] investigated the relationship between the environmental, social, and governance performance of an organization and its quality of financial reporting with the assistance of data from the DataStream, Refinitiv Eikon, and ASSET4 databases. In the study [23], the authors examined the relationship between corporate governance and the internet financial reporting system in order to find out whether the two can be related. The authors in [24] examined the relationship between environmental and social reporting quality in favour of the impact that it has on these two variables in terms of their relationship. In their article [25], The authors examined the extent to which audit fees influence the independence of auditors in Nigeria, while also assessing the impact of independent non-executive foreign directors, foreign institutional ownership, and local institutional ownership on the quality of financial reporting. Their study provides valuable insights into these critical factors affecting audit integrity and financial transparency. As the authors of [26] stated, they examined the responses of 120 French listed companies to some corporate governance mechanisms used in integrated reporting in order to examine the effectiveness of such mechanisms. Table 1 displays the advantages, disadvantages, methodology, output and the contributions of the existing FRG works.

The studies cover diverse aspects of FRG, including corporate governance, financial reporting quality, integrated reporting, and the impact of regulations and technologies on FRG practices across different sectors and geographical regions. Each study employs various methodologies, such as literature reviews, regression analyses, case studies, and surveys, to examine the relationships between corporate governance and financial reporting quality. As a result, many entities struggle to implement a cohesive and efficient approach to managing their financial reporting processes. The absence of a comprehensive, unified model creates several challenges for organizations. It can lead to inconsistencies in reporting practices, difficulties in comparing financial information across different entities or time periods, and increased complexity in compliance efforts. Table 1 highlights the findings and contributions of each study, while also acknowledging limitations and suggesting areas for future research.

III. Model Driven Engineering

Model-Driven Engineering (MDE) is a sophisticated development approach designed to effectively create and model complex domains, enabling a structured and systematic way to address the intricacies of financial reporting and governance [30] at a high level of abstraction [31], where the metamodels are the central elements in the development process [32]. The primary goal of Model-Driven Engineering (MDE) is to offer solutions that address challenges related to interoperability, heterogeneity, and the complexities inherent in various domains [33]. The MDE methodology is built upon three foundational concepts: model, metamodel, and metamodel transformation. The following paragraphs provide a brief overview of these three key concepts of the MDE methodology. The first concept is a model, which serves as a representation layer that helps manage the complexity of real-world systems and processes [34]. It consistently organizes the core ideas of generic concepts that constitute the domain [35]. It aids designers in comprehending complex systems by breaking them down into smaller, manageable components known as solution models. Typically, a model comprises two fundamental elements: concepts and relationships [36]. A concept defines the entities within the domain, while relationships elucidate the connections between those entities [36]. A model conveys the structure, behaviours, and other properties across a variety of domains, including engineering, science, philosophy, mathematics, management, and medicine [37]. The behaviours of the model are governed by a metamodel, which is defined using a specialized metamodeling language. The following section provides a brief overview of metamodels.

The second component is the metamodel, which serves as a model of a model, effectively providing a comprehensive explanation of the underlying structure of the model. It delineates the concepts, attributes, operations, and associations necessary to represent a specific domain accurately. Essentially, a metamodel offers a precise definition of the modeling elements such as concepts, attributes, operations, associations, and rules that are essential for constructing semantic models [38]. These elements are utilized to build a domain model. Therefore, a metamodel serves as both a prescriptive and descriptive framework for a modeling language. It addresses the ambiguity and heterogeneity present in complex domains by facilitating the generation of solution models that provide clarity and consistency [37]. The metamodel comprises four levels (M0, M1, M2, and M3), as illustrated in Figure 1, each providing a distinct perspective on modeling at varying levels of detail. Concepts at any level below M3 are derived from the concepts of the level immediately above. Furthermore, any concept at a given level (above M0) can be instantiated at the level below it. The M3 level is reserved for meta-metamodel components, which include explanations of the construction and semantics of the metamodel; however, this level is not a focus of this study. The M2 level represents instances of the meta-metamodel, detailing the construction and semantics of metadata, as illustrated through UML concepts such as classes, attributes, operations, relationships, and notations. The M1 level encompasses the model level and includes the metadata that defines data at the information level. Finally, the lowest level, M0, is dedicated to user models and is commonly referred to as the information level (or user data). In this study, the M0 level will address the data described by the FRG model at M1, while the M1 level will encompass the models outlined by the FRG metamodel at M2.

The transformation refers to the process of constructing a solution model from the underlying metamodel. This process entails interpreting the abstract constructs defined within the metamodel such as concepts, attributes, and relationships and applying them to create a specific, actionable solution model tailored to the needs of a particular domain. Through this transformation, developers can leverage the structured framework provided by the metamodel to ensure that the resulting solution model adheres to established guidelines and best practices, ultimately facilitating effective implementation and alignment with intended outcomes. This systematic approach enhances the capability to adapt and refine models as requirements evolve, promoting greater scalability and relevance in changing contexts [40]. The proposed FRGM must be transformed into multiple FRG solution models in a manner that ensures interoperability. In this study, we utilize the transformation methods introduced by the Meta Object Facility (MOF) to execute the transformation from metamodel to model for the FRGM. Within the MOF framework, model transformation can be viewed through both vertical and horizontal dimensions[41].

Figure 3. Metamodel transformation mechanisms[31].

Figure 3. Metamodel transformation mechanisms[31].

Vertical transformation refers to the process of converting models from one level of abstraction to another within a modeling hierarchy. This transformation can occur from a higher level to a lower level of abstraction, for example, transitioning from the metamodel (M2) level to the model (M1 and M0) levels. Additionally, the process of deriving individual concepts within the models is also considered a form of vertical transformation, as it involves breaking down higher-level abstractions into more specific, actionable representations that adhere to the defined structure of the modeling framework. As defined by [42], A model is said to conform to a metamodel when the metamodel defines every concept utilized in the instantiated model, and the model applies these concepts in accordance with the rules established by the metamodel. This relationship involves two key aspects of vertical transformation: Instantiation and Conformance. The Instantiation concept refers to the process of creating a specific instance of a concept from the metamodel, while the Conformance concept pertains to the instantiation of multiple concepts to derive a more complex concept or model object from the Financial Report Governance Model (FRGM) at the M2 level. While both Instantiation and Conformance are categorized as forms of vertical model transformation, conformance represents a broader application of instantiation.

In this study, this process elucidates how one or more concepts from the FRGM at the M2 level can derive one or more concepts in a model at the M1 level. Typically, concepts at the M1 level draw upon one or more concepts from the FRGM. Specifically, vertical transformation occurs when the M1-FRG Model and the M0-FRG User Data Model are derived from their conformant M2-FRGM. The detailed process of transforming the M1-FRG Model from the M2-FRGM will be elaborated upon in the following section through various case studies and scenarios.

IV. Methodology and Development Processs

The purpose of this study is to develop a Financial Reporting Governance Metamodel (FRPGM) based on the metamodeling approach [43,44,45]. Metamodeling is a kind of MDE. It is a powerful research methodology that focuses on the design, development, and evaluation of innovative solutions and artifacts to solve complex problems [46]. By combining theoretical insights and practical experience, researchers can create practical and meaningful solutions for real-world challenges. As a result, metamodeling is a valuable approach for creating impactful and practical solutions that can be applied to various domains [47].

Stage I: Preparation Stage: The aim of this stage is to prepare the search controls that will be used to control the behaviour of the research in this study. It includes two controls: identifying online databases and identifying searching rules. This study identified six common online databases often used by researchers in academic fields: IEEE Xplore, Scopus, Web of Science, SpringerLink, ScienceDirect, and Google Scholar. Three search rules are identified in this study to guide the search in the commonly identified online databases: the publication date, keywords, and the language used to search. Generally, the publication date has been identified as between 2015 and 2025, and the keywords have been identified as “Finance Report” and “Governance” with the language restricted to English as the publication language. Table 2 summarize the results of searching. The next stage concentrates on gathering data from the identified online databases.

Stage II: Gathering stage: This stage consists of two steps: collecting data from identified databases, and filtering gathered data. During this phase, based on search rules that have been established, the data from the six online databases identified in the previous step will be gathered according to those rules. The online databases offered a total of 5,553 articles. More specifically, 4 articles were found on Scopus, 2 on WoS, 111 on Springer Link, 7 on IEEE Xplore, and 5,300 on Google Scholar. As a second step, all the articles that have been collected will filtered based on the inclusion and exclusion criteria offered in Table 3. Only 24 articles focused purely on finance reports and governance as shown in Table 4. The next stage concentrates of developing stage.

Stage III: Developing Stage: This stage focuses on developing a financial reporting governance metamodel to establish a comprehensive framework that encapsulates essential governance components, including roles, responsibilities, reporting lines, and decision-making processes. Adopting this approach enhances clarity and promotes more effective stakeholder communication, ultimately strengthening the governance structure. In this stage, the authors adapted metamodeling approach from [54]. It consists of four steps, as illustrated in Figure 4:

1.

Identifying and selecting development models: In this step, the FRG already used in other studies for developing FRPGM were identified and selected. Among the existing models the ones that were focused solely on the FRG process were selected for this study. As a result, 24 FRG models and frameworks were selected as part of the process of developing the FRPGM.

2.

Gathering FRG Processes and concepts: The aim of this step is to gather the main FRG processes and concepts from the 42 mobile forensic models, which could possibly be involved in the FRPGM. The processes and concepts are obtained from the textual contents (main body) of FRG models to prevent any omitted or irrelevant processes or concepts during the extraction process [55,56,57]. However, similar to the procedures in [54,55,57,58], the FRG processes and concepts were extracted manually from each model. Furthermore, this study adapted the concept mining process from [59,60]. As shown in Table 5, 202 FRG processes and concepts have been gathered from 42 FRG models. This step in the metamodeling approach is vital as it lays the groundwork for the development of the FRPGM. By determining essential FRG concepts and processes, we can make informed decisions regarding their inclusion in the metamodel. Next stage step is using to filter and propose the common FRG concepts and processes to develop the FRPGM.

3.

Filtering and Proposing Common FR Processes and Concepts: This step involved filtering and combining the 202 concepts and processes collected in the previous step based on how similar their meanings and workings are [61,62,63]. For example, the Stakeholder Engagement [14,15,17,18,19,20,21,23,24,25,26,48,49,51,53], and Stakeholder Communication [11,50] mean the same function with different names. Both processes highlight the importance of interacting with various stakeholders (e.g., investors, customers, regulators) to understand their expectations and concerns, promoting transparency and trust. In addition, Sustainability Reporting [48] and Non-Financial have the same meaning; both refer to the disclosure of non-financial impacts or performance, including environmental, social, and governance factors that contribute to stakeholder decision-making. Therefore, the components that have similar semantic meaning or functional meaning are merged into one common category regardless of naming, and then each category is mapped, and the most frequent component of each category is. Therefore, 10 common components were proposed, as shown in Table 6. These components are used as the main inputs for the FRPGM. Table 7 displays the UML relationships among the proposed components.

4.

Development Finance Report Governance Metamodel: This step aims to develop the FRGM. A unified modelling language (UML) relationship was adapted to develop the FRGM. This relationship refers to a link between metamodel components; it combines semantics, called the modelling language [64]. A modelling language is a set of concepts and constructs used to describe the underlying structure of a modelling language, which, if properly organized, allows for the creation of clear and concise representations [64]. As a result of this step, the finance report governance metamodel is developed and depicted in Figure 5.

The metamodel provides a standardized framework that clarifies roles, responsibilities, workflows, and decision-making hierarchies. By having a structured model, organizations can ensure consistency across departments and regions, improve communication among stakeholders, and enhance compliance with regulations. The metamodel also allows for flexibility and adaptability, which is crucial given the evolving regulatory and technological landscape.

Another key point is that the metamodel helps identify inefficiencies and risks by analysing interdependencies between components. For instance, Risk Management ties to Performance Measurement and Financial Reporting, which means that effective risk management can lead to better financial reporting. The use of technology and innovation supports various components like Auditing and Financial Controls, Risk Management, and Performance Measurement, indicating that integrating technology can streamline these processes.

It is important to recognize that the developed metamodel transcends being a simple diagram of the components and their interconnections; it functions as a semantic language that governs the behaviours of the domain. This metamodel provides a structured representation that facilitates a clear and precise definition of each component, along with their attributes and interactions.

By doing so, it empowers developers to design and implement applications that are not only domain-specific but are also fully compliant with the intricacies and requirements of the domain. Such clarity enables more effective communication among stakeholders and fosters better collaboration in the development process. In the next section, we will explore the architecture of the metamodel in greater detail, examining how it can be practically applied to enhance the development of domain-specific applications.

V. Implement the Developed FRGM in the FRG Domain

Based on the explanation about the metamodel in Section 3 and the model transformation from the source to the target, this section will explain in detail how can we instantiate the solution models (M1-FRG Model) from the (M2-FRGM Metamodel). Vertical transformations as mentioned in Section 3 refers to the process of elevating a model from one level to another. This transformation method is particularly useful for deriving specific concepts from a metamodel into derived models. A model adheres to a metamodel when the metamodel defines all the concepts utilized by the model, and the model aligns with these specified concepts. This alignment facilitates the transformation from a higher level to a lower level, such as from a metamodel (M2) to specific models (M1-User Model and M0 - Data Model), as illustrated in Figure 6. The M2 metamodel encompasses general concepts, relationships, and regulations that govern the functionalities of the M1 User Model. Figure 6 visually depicts the vertical transformation mechanism and the instantiation of models from the metamodel.

The vertical transformation mechanism must conform to the modelling rules adapted from [66] to effectively instantiate and derive solution models . Adhering to these rules ensures that the transformation process is systematic, reliable, and aligns with the underlying theoretical framework, ultimately enhancing the integrity and functionality of the resulting models. Figure 7 displays the rule which is used to create target model from source metamodel. Consequently, the M2-Finance Reporting Governance Metamodel (M2-FRGM) enables practitioners within the FRG domain to effectively instantiate the M1-Transparency and Accountability Model. This instantiation is guided by the established relationships (R1) that outline how the components and principles from the M2-FRGM translate into practical applications, as illustrated in Figure 8.

VI. Finding and Discussions

In this study the author developed a high abstract model to structure, organize, unify and manage the FRG domain called FRGM. The developed FRGM effectively captures and represents the essential components of the financial reporting governance process, including roles, responsibilities, workflows, and decision-making hierarchies. It encompasses ten primary components: corporate governance structures, auditing and financial controls, compliance and regulatory framework, transparency and accountability, risk management, stakeholder engagement and communication, performance measurement and financial reporting, cultural and ethical considerations, technology and innovation training and development. Thus, this section will try to answer the questions which highlighted in the Section 1:

• What are the advantages and disadvantages of the current financial reporting governance models and frameworks?

To explore the topic comprehensively, the author embarked on an extensive literature review, sourcing an initial pool of 5,553 articles from widely used search engines. This vast collection was aimed at capturing a broad spectrum of research perspectives and findings related to financial report governance. The sheer volume of articles underscores the complexity and multidisciplinary nature of the FRG domain, highlighting its importance in the contemporary financial landscape. Recognizing the need for a focused analysis, the author undertook a rigorous filtering process to distil the wealth of information down to the most pertinent studies. This process involved evaluating the relevance, credibility, and depth of each article with respect to financial report governance. The filtering criteria were designed to ensure that only the most insightful and impactful studies were retained for deeper examination. As a result, 31 articles were identified for their specific concentration on FRG, each offering unique insights into the domain’s intricacies. From this carefully curated selection, the author was able to identify and articulate the key advantages and disadvantages discussed within these studies. The advantages highlighted included improvements in compliance, accuracy, and transparency in financial reporting practices facilitated by effective governance mechanisms. Conversely, the disadvantages revealed challenges such as implementation complexity, costs, and resistance to change within organizations. This dual perspective provides a balanced understanding of the current state of FRG, offering valuable insights for future research and practical application.

• Does the FRG domain have a structured and organized model to effectively represent its domain knowledge?

Based on the literature review and analysis presented in the paper, the FRG domain previously lacked a comprehensive, structured, and organized model to effectively represent its domain knowledge. Existing frameworks and models (e.g., IFRS, GAAP, COSO, COBIT) addressed specific aspects of financial reporting governance but were fragmented, lacked standardization, and did not holistically integrate all critical components. These models often focused on isolated elements such as compliance, auditing, or risk management without clarifying interdependencies or providing a unified framework. Thus, the authors addressed this gap by developing the FRGM using a metamodeling approach as follow:

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Unifies 10 core components (e.g., corporate governance structures, auditing, compliance, risk management, stakeholder engagement) into a single structured framework.

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Standardizes relationships between components through UML modelling, enabling clarity, interoperability, and adaptability.

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Resolves fragmentation by synthesizing processes and concepts from 24 existing models into a high-level abstract representation.

Thus, the FRGM serves as the first structured and organized model that systematically captures the complexity of FRG domain knowledge, addressing the limitations of prior frameworks. This metamodel enhances transparency, facilitates compliance, and enables dynamic adaptation to evolving regulatory and technological demands.

VII. Conclusions

Financial reporting governance (FRG) ensures that financial reporting is accurate, transparent, and compliant with regulations. Several models, policies, procedures, frameworks, and processes have been developed and proposed to organize, manage, structure, share, and reuse FRG knowledge from different perspectives. However, the proposed works are unique and developed to solve specific scenarios and cases. The FRG domain lacks a unified abstract model to organize and structure the domain knowledge. Thus, this paper aims to develop a novel high abstract model for the FRG domain knowledge using model derive engineering (MDE) and metamodeling called financial reporting governance (FRGM). The developed FRGM consists of ten abstract components: corporate governance structures, auditing and financial controls, compliance and regulatory framework, transparency and accountability, risk management, stakeholder engagement and communication, performance measurement and financial reporting, cultural and ethical considerations, technology and innovation training and development. Each abstract component represents semantic knowledge with definitions, relationships, attributes, and operations. The capabilities and effectiveness of the developed FRGM are validated using vertical transformation to ensure solutions models from the developed FRGM. The FRGM effectively addresses the issues of heterogeneity and interoperability within the FRG domain. Future work stemming from this study will focus on implementing the FRGM in real-world scenarios to enhance its effectiveness and applicability.