Decisions made in boardrooms have far reaching consequence. As such the value of good governance, the process of making and implementing decisions, cannot be overstated. Is there anything more important than that which determines an organisations ethics, strategy and how it operates?
Back in 2017 there should have been a reason to celebrate for all those connected with governance; the 25th anniversary of Cadbury’s famous phrase ‘corporate governance is the system by which companies are directed and controlled’. Yet whilst progress has been good, there are still too many events occurring which present a picture of inappropriate organisational culture and the slow pace of change:
- Collapse of public sector partner and construction giant Carillion
- Tesco’s financial misstatement debacle
- Deepwater Horizon oil disaster rooted in governance failings
- banks fined >£800m for issues such as the Libor rigging scandal and PPI claims mismanagement
- delayed reporting by Equifax of a data breach affecting 145 million people
- Sport Direct systemic cultural issues likened to a Victorian workhouse by MPs
- Oxfam workers exploiting vulnerable communities in Haiti
- Wells Fargo announces profit drop after CEO exits in fake accounts scandal
Social distancing measures introduced to stem the coronavirus pandemic was one of the new governance challenges in 2020 with audit committees postponed and activities subsumed back into the main board rather than engaging through virtual meeting.
- What are the governance arrangements in your organisation?
- Is there a risk temporary changes due to the COVID-19 crisis become permanent or where positive are not embedded?
- When did you last advise the board on what good corporate governance looks like?
- In times of crisis should the time allocated for governance be protected or is it acceptable to ‘explain’ more often than ‘comply’ to stakeholders?
Other examples may come to mind, there have been too many over the years to…
"Somewhere inside all of us is the power to change the world"
- Roald Dahl