In business today, most shareholders want companies to be profitable and align with good governance best practices.
So, what is good governance?
Governance is an organised system of processes, practices, and rules directing, controlling, and governing a business, the fundamental principles of which include transparency, fairness, responsibility, risk management, and accountability.
It involves balancing the interests of diverse stakeholders, including government, senior management, shareholders, financiers, suppliers, customers, and the community. In addition, it encompasses every part of business, from strategy creation to performance monitoring and control, to corporate disclosure.
Good governance also incorporates strategy, ethics, environmental concerns, social responsibility, risk management, and compensation.
Essential to this governance is your board of elected directors, your primary corporate governance influence.
At the same time, under-informed, poorly aligned board...
AVOIDING STRATEGIC LOCK-DOWN: Part 1 - Asking Strategic Questions
This is the first of our series to "Avoiding Strategic Lock-down" and will focus on asking great Strategic Questions.
But before the board and management dives into ‘what’ it is they want the business to be doing, the board needs to understand first who it is and what it wants the business to be. Therefore,
1. What is important to us as an organisation? Asking this question focuses on the future, and really asks what sort of organisation we want to be, what level of revenue we want, what sort of culture we encourage, and what do we want our points of difference to be. So, as a business we need to ask these questions of ourselves, so we have clarity of who we are.
Now that the board and business have a greater understanding of what’s important, it needs to take a stocktake of both its internal and external environment.
I recently went overseas to a country that I knew would test me…so why go you ask? A long story involving a friend’s wedding. Enough said. I enjoyed what the country had to offer in tourist attractions and experiences, however what I noticed was a growing economy striving to adopt as much western culture as possible. The more curious I got the more I started to see that people were busy doing what they thought was being efficient, however they were failing to be effective. As individuals, and in groups, they focused on the process rather than the purpose. I was intrigued at how busy some people could be, yet they still didn’t get things done. Working long hours, on multiple task, tight deadlines and with little appreciation for the personal sacrifice being made. Sound familiar?
On the long flight home, I thought more about the experience and especially why their leadership had not recognised what was happening. Surely the...