Governance 3.0 – The Third Generation…
In a fast paced, increasingly complex business environment, we need to ensure there are mechanisms in place to help us measure and monitor how well organisations are performing in order to prevent failure. For over fifteen years I have been working with organisations across the private, public and voluntary sectors to help raise the standards of governance. What I have found is that governance can sometimes be seen as something you do to tick the box. When we talk about a robust governance framework, or good governance it means different things to different people.
Good governance is more than a compliance issue. It is about how we ensure that an organisation’s purpose, strategy, values and culture have a golden thread that aligns them. It is the intertwining and the linking of strategy and policy, oversight and disclosure. It’s about running the organisation well and the better the governance, the better and more sustainable the organisation. Oversight and foresight are necessary but promoting success is much more than satisfying just profit objectives or the needs of one stakeholder group. Good governance is a vehicle to achieve so much more than that. It generates positive outcomes for business, the economy and the environment.
In these changing times, it is important to recognise how governance has moved from being compliance based and responding to corporate failure (first generation), to generative – trying to anticipate failure (second generation) and then to where we find ourselves today where the rate of change requires a new approach to good governance. It is time to think about a methodology that responds to this rapidly changing technological environment that considers the interest and influence of stakeholders, environmental issues such as climate change and social issues such as globalisation.
In this environment, we must consider questions such as: what are the major forces that shape societies around the world and are likely to influence the future of business and how it is run? As Yuval Noah Harrari puts it: “…a global world puts unprecedented pressure on our personal conduct and morality.” Governance does not exist in a vacuum. We should consider how the workforce and customers experience a new world and develop a new way of working as a result of it. Governance does not exist in isolation and preparing for the future means considering the impact of disruptive technologies but rather than just respond to or anticipate disruption, a good governance framework should help to create, to innovate, to influence change and to improve long-term, sustainable success.
We may not be able to predict or prevent failure but we should have governance standards that are relevant across all sectors, jurisdictions and regardless of size. This is why I believe it is time for us to consider The Governance Framework as Governance 3.0 – The Third Generation. The Governance Framework has ushered new ways of understanding and assessing governance using a four-pronged approach that underpins the assessment framework and quality mark which organisations can aim to achieve. It provides a clear structure that allows organisations to be able to understand how good governance can be achieved and also maintained, in line with international best practice.
Whilst having the right systems and processes in place is a start, the future of governance lies in our ability to reboot. The framework introduces standards and a governance assessment that applies to all sectors. The methodology measures governance processes and protocols to ensure they comply with best practice and encourages openness, transparency and genuine consideration of all stakeholders. The foundation for The Governance Framework is grounded in research that encompasses practice from all sectors and international insight. This helps to establish a methodology that is grounded in evidence and provides organisations with a measurable mechanism to monitor their own performance. This is Governance 3.0.
My thanks to RSM UK who are the main sponsors of The Governance Framework Launch that took place on 14th November at the Hyatt Regency Hotel, Birmingham. RSM UK have recently launched their ‘Trust in the boardroom: a move towards sustainable corporate governance’ campaign that supports the delivery of The Framework, recognising ethical decisions should be the foundation for all organisations.
The event saw organisations from across all sectors including financial services, the NHS, the charity sector and housing who have completed and are undertaking The Governance Framework recognised for their commitment and achievement in good governance. Sir Michael Lyons, Executive Committee Member at The Lunar Society and former Chairman of the BBC Trust and Peter Swabey, Policy and Research Director from ICSA: The Chartered Governance Institute were the speakers who shared their experience and talked about the need for The Governance Framework.
The Launch is just the beginning. We need to work together to support sustainable, ethical businesses, to mitigate failure and to usher in a new generation of corporate governance thinking and practice.
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Until next month ….
