A simple framework for the Board to reflect
Corporate Governance, globally, is shifting its gears to a more transparent process than what it was or is currently existing in many parts of the world, including India. Like many “changes” we have seen over the last few decades, this is also due to the socio-political and economic ramifications than due to “value oriented” self -reflective shift.
Hence, it has become imperative for the regulators to create a framework to protect the stakeholders and create more ownership in conducting affairs of the business. Many best practices case studies indicate that a wholistic governing process of an organisation had helped organisations to build sustainable growth. A few perspectives must be re-wired in our mindset to make the process of “governance” more emphatic. Mere perspective building would not help, but at least repositioning the same in our “mind-set” with clarity can provide us appropriate directions.
Ownership – The word connotes to “being accountable for our actions/behaviour on others, who are in our eco-system. Therefore, the focus should be to audit which of our actions/behaviour really impact our entire eco-system of the business i.e. social well-being (customer, employees and their families and all related social factors), protecting the environment (safety in its entirety, carbon emission etc.); value chain (external -vendors, supplies, Internal – end to end operations etc.), and the investors (owners, financial institutions, and other share-holders-minor or major).
Governance: The word itself represents a reactive connotation. It pre-supposes a set of rules and regulations, which needs to be “governed”. Therefore, if there are no “rules and regulations”, what happens to the actual purpose of the Board – a collective group of unique professionals to help and build a sustainable organisation?
Conscientious growth: This word represents a deterministic pro-active process of growth. In today’s world of ambiguity, a collective, conscientious process would be more meaningful than just governance.
In nutshell, the directors on the Board need to have a futuristic perspective of an “on-going concern” concept. Therefore, in a new world order (which will continue to shift), the members of the Board need to be “SPECIFIC” with a clear business orientation for creating a high performing Board and a sustainable organization.
Seek Clarifications and be sensitive to the environment: Identify deviations and variations (High, Medium, Low), and ensure risk elements are brought up for deliberations.
Purposeful: The role of the members of the Board must to be understood at the individual level: financial gain or adding value to the business? and at the board level: to align to the power centres, or align with the business purpose? Defining purpose at organisation level (not an easy process and is different from vision) is critical to make the role more enriching.
Empathize: The role clearly emphasizes to support the managerial leadership to create a better performing organisation. Meaningful exploration and appreciation of good work done by the management will go a long way in forging more effective relationship.
Clarity: Bring “CLARITY” to all our actions and behaviour:
Commitment to consistently deliver the best
Learnability quotient – ability to develop an actionable agenda, after learning from different strata.
Analytical (not an activist): seek qualitative /quantitative insights to provide an insightful direction.
Respect for people (irrespective of process) & processes (multi-functional, and not silo focus)
Intellectual honesty – have the courage to express the perspectives, with due respect to the peers on the Board.
Technology driven - identify and encourage ideas which will help the organisation to leverage technology for a better tomorrow. The focus should be to utilise technology to integrate all processes/systems to position the organisation for tomorrow, while taking care of today.
Imaginization: A way of thinking and organizing (a term coined by Gareth Morgan) to understand and develop our own creative potential and find innovative solutions to difficult problems.
Facilitate meaningful dialogue: Dialogues are an inter-intra process of value conversations with the self, and others to build purposeful actions. Facilitating such a dialogue needs expertise and having a person of this calibre on the Board helps it reflect without hurting the “sentiments”.
Institutionalise: Collectively, the members of the Board strive to build an “explorative and innovative organization”. There are many best practices on this area, but a consistent approach is must to sustain.
Compliance the Board should respect the robust Board Governance Score Card covering all financial and non-financial (tangible and non-tangible) and ensure that these are adhered too, and just rely on the “certificates” issued by the managerial leadership.
The word “SPECIFIC” and its expansion also are key elements of “conscientious growth”.
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