How To… Review your Governance using the TGF Framework

My work and research with over 100 organisations and more than 500 EBM Programme participants around the world has helped to establish the key principles of the TGF Framework which are:

1. Resources

2. Competency

3. Execution

Briefly, the resources element of governance framework includes ensuring that every organisation has all the required documentation which should be relevant and up to date.

Each committee, for example within the governance structure should have terms of reference which guides the work they do and the organisation should have the relevant insurances in place. Resources are all about the items which on paper show what the organisation and the people in it should do.

 

Competency can be described as the board’s ability to do what it says on paper! Terms of reference for the board will most always talk about strategic oversight of the organisation. However, if no one on the board understands how to be strategic or when considering long-term financial planning, treasury management or sensitivity analysis there isn’t a sufficient level of financial expertise, the board will not be competent to execute its duties.

 

The third key principle is execution. You have the paper; you know what you’re required to do. You understand your duty and role and are sufficiently trained to undertake it, but undertake it you must! This is the basis of execution – the act of carrying out what the terms of reference or governing document say you should in a manner which, as the UK Corporate Governance Code says; “…promotes the long term success of the company.”

 

So, how do you review your governance using the TGF Framework?

 

Step One – Check, Review and Update

Check that you have the correct documents in place which should include: terms of reference, role descriptions (board members, chair, CEO), memorandum and articles of association, insurance certificates, strategic policies etc. Then these documents should be reviewed. When was the last time the policies were updated? Are they still consistent with organisational practices? If items are out of date, you need to update! Pulling together a review schedule will help ensure a continuous process of review.

 

Step Two – Assess Skills and Train

No, you’re not required to attend a session at the local gym, but you must ensure your board is adequately trained to be able to make effective decisions on behalf of the organisation and all of it’s stakeholders. A crucial part of this is making sure your board is diverse to encourage a broad range of views and experience alongside professional skills. Undertaking a skills assessment of each board member will help you to identify gaps which can inform the board member development plan you put in place and also future recruitment strategy. This should form part of your appraisal cycle and both individual board members and the whole board should be appraised. The NHF Code of Governance – Promoting board excellence for housing associations states in provision D9 that: “A full and rigorous appraisal process for the individual members of the board and its committees, including the chairs, must be carried out at least every two years.” Training and refreshing skills and knowledge is an essential part of board development and board members should be encouraged to attend sector specific and general training to ensure there is a base level of understanding in matters such as governance, finance, legal and HR. The board must be collectively competent.

 

Step Three – Do The Work!

You can be competent but if you don’t read your board papers or understand what the organisation does by engaging in it’s activities, how will you challenge and scrutinise the executive? You are the custodians of the vision and mission of the organisation and it is your role to monitor and implement strategy. Just turning up is not enough. There must be an open relationship between the board, the executive and stakeholders which allows dialogue to take place about the objectives and how they are being met. Strategic oversight and continued monitoring of said objectives is essential. Monitoring of appraisal objectives is also a crucial part of ensuring the board executes it’s role well.

 

So there you have it, a whistle stop tour of how to review your governance using the TGF Framework. To learn more about governance reviews, you can do any of the following:

 

1. Book your place on an Effective Board Member programme:

http://effectiveboardmember.co.uk/london

http://effectiveboardmember.co.uk/birmingham

 

2. Purchase  ‘The Little Book of Governance’ and ‘Boards Behaving Badly’ from the TGF Little Book Series,

 

3. Book a governance review consultation with myself or one of my team by calling 0845 505 1875.

 

 

Until next time…