Good corporate governance is the essential building block of a successful entity and not only empowers the economic responsibility, but also supports the entity’s stakeholder network including staff, customers investors, etc. The application of good governance principles and concrete facilitation is crucial to support and accelerate sustainable growth.
Corporate governance is at the heart of an entity’s functions and dynamics and can have a wide range of influence on anything from rules and procedures to management styles and reporting dynamics.
Our experience in supporting complex public private partnership has taught us that the core aspects of a good governance structure come down to:
Ensuring a suitable and responsible board of directors is actively engaged to direct the entity’s overall direction
Grounding the overall governance within positive principles can ensure that the entity nurtures an atmosphere of trust and transparency among its stakeholders
What are the best practices to follow in selecting board members?
The board is responsible for directing and approving corporate strategy and values, and an effective board member should have a core competency aligned with the entity’s main functions to maintain an overall understanding. Additionally, board members should be able to contribute to discussions with a specialized focus which allows the board to utilize a wider range of expertise to advise on direction.
How can we leverage the capabilities of a Board?
Distributing the responsibilities of the board members through various committees around their key expertise to address any challenge that emerges is a good way to draw the best of their capabilities. However, a key point to note is the scope of these challenges that are elevated to the board. A board must be focused on the overall direction of the entity and avoid getting into the operational details, as this might begin to restrict and interfere with of the entity’s management
How to structure governance across the organization?
The 4 Ps of governance provide a useful framework to help us structure an overall governance:
- People – Putting people at the forefront of governance considerations is crucial because people are the ones who define the remainder of the 4 Ps. People set the purpose of the entity, the processes to realize those objectives and perform the work needed to push the entity forward
- Purpose – Like many structuring activities, the first step would be to baseline what the key objectives and priorities are for the entity or business units to build up the required functional departments
- Process – Departments are built up based on the identified purpose clear roles and reporting lines, that must be aligned with the overall values and vision of the entity to answer key questions such as role structure or levels of verticality
- Performance – Integrate an approach for monitoring performance and providing feedback that is measurable and quantifiable, to ensure clear expectations are set and communicated for both leadership and staff
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