This is what great companies do to ensure strong governance

GovernanceIt is the best of times, it is the worst of times, it is the age of wisdom, it is the age of foolishness …     (to paraphrase Charles Dickens.)

With the opening of trade opportunities globally through the touch of a button, the potential of cost reduction through the increasing role of AI, the long-term restructure of pension requirements and a wider workforce that are as well-educated as any in our history, it could be said that in many ways business has never had it so good. On the flip-side, the pace, complexity and ambiguous nature of the environment within which businesses have to work is as challenging as almost any in the history of organised work. Add in the uncertainty over Brexit, the US and terrorism and it is clear we face real challenges.

Wisdom and Foolishness

But let’s focus here on the wisdom and foolishness parts of Dickens’ opening lines. A litany of organisational disasters, capped off with the economic meltdown of 2008, should have provoked some wisdom around how organisations might want to consider their role in society more fully. “Should have” being the operative phrase there. I’m not referring to initiatives such as CSR. No, I want you to consider objectively your response to the idea of thoroughly planned and robustly executed governance. How do you, as a senior leader, ensure that the team or organisation you lead, remains acutely aware of its responsibility to guard against itself?

Notice that last sentence: I took some time to craft it.

You see for me and many of the outstanding leaders I have the pleasure of working with, governance is not the preserve of you local sector regulators such as the FCA, PRA, CQC or OFGEM. That focuses more on compliance. Compliance is a really  important part of your governance considerations of course but it isn’t the whole. Regulatory compliance is ‘done unto you’. Governance is the standards of accountability that you set for yourselves as an organisation. Get it right and you can sleep easy at night assured that, at some point further down the line, skeletons will not come tumbling out of the cupboard. Get it wrong, or worse still, pretend it will look after itself and you can look forward to less sleep than you need to function effectively.

Culture change

Building a sustainable approach to high quality governance requires a clarity that is achieved through systemic and behavioural changes. Great organisations ensure that they have  developed systems to monitor, reward and discourage certain behaviours. Checks and balances need to be in place to raise red flags early. Staff need to understand why governance is so important and how they are expected to support it as a key strategic strand. Leaders ensure that roles and responsibilities are clear for everyone in their team and that each person understands their accountabilities in terms to the outputs they produce and the level of performance expected of them consistently. All of these moving parts aggregate up to an organisational culture that respects the importance of governance.

One counter-intuitive benefit of a highly structured, highly visible, sustained approach to governance is that it is incredibly liberating. Knowing where you stand, helps individuals feel less uncertain. It reduces the fire-fighting required by leaders, to resolve issues that often should never have arisen in the first place. Having clarity about what is ok and what is not ok (not in some dictatorial way) offers everyone the opportunity to flex and innovate within clearly understood boundaries. Robust governance is the foundation for high performance over the long-term. 

Glenn Wallis is a leadership and organisational culture expert who helps organisations blend the hard stuff of systems with the harder stuff of people, to create highly successful teams and organisations that succeed both here and now and in the long-term. If you would like to chat about your requirements, please contact Glenn here.

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