27 May BOARDS THAT PLAY THE INFINITE GAME (2019-05-27) May 27, 2019 Corporate Governance Framework®, Ethics, General, IT Governance Framework, Strategy Corporate Governance Framework®, Visionary, Ethics, Strategy, Innovation, Talent management By Jené Palmer CA(SA) (CGF Lead Independent Consultant) and peer reviewed by Terrance M. Booysen Visionary leaders do not underestimate the power of the Corporate Governance Framework® in driving organisational culture. These leaders appreciate the importance of a governance framework in nurturing sustainability by driving values-based decision-making to “play the long game”. Vision To build a sustainable business, true leaders instil a sense of purpose in the organisation. This purpose (or vision) usually underpins the organisation’s values and answers the question: why are we in business? Inspirational in nature, the vision sets out the desired change which the organisation aims to achieve over the long term: it is the beacon which guides goal setting and implementation. Used correctly, the Corporate Governance Framework® can help leaders ensure that organisational decision-making is aligned with the corporate vision, especially in a business world where stakeholders and their demands are constantly evolving. Ethics Some organisations adopt a Corporate Governance Framework® to tick the proverbial governance box. However, the real value lies in using the framework to create an environment of trust where employees are empowered and feel safe enough to use their discretion to make decisions which they believe are in the best interest of the organisation. Ethics lies at the heart of the Corporate Governance Framework®. As such, the framework helps business leaders (management and the board) assess whether a rules-based mentality permeates the organisation or whether a culture of accountability and “speaking up” has been inculcated. Experienced leaders know that it is foolish to merely rely on rules alone to govern the organisation as it is simply impossible to establish rules to cater for every eventuality. Ensuring that the words and actions of middle management and senior executives support the leadership and ethical tone set by the board is preferable and proven to be more effective in building a sustainable organisation. A Corporate Governance Framework® helps business leaders assess whether a rules-based mentality permeates the organisation or whether a culture of accountability and “speaking up” has been inculcated Strategy Through its scorecard, the Corporate Governance Framework® fosters transparency and can be a useful tool in building brand loyalty. Although the framework requires each critical element of the business to be regularly evaluated, rather than just focussing on the absolute assessment ratings, the organisation’s leadership should also review and interpret the assessment trends being reported over time. These trends can produce deeper insights into the effectiveness of governance improvement programmes as well as internal and external stakeholder behaviour and attitudes. Analysing benchmarks (even if these are internally established) can inform the board on the extent to which the organisation’s decisions and actions are underpinning its strategic objectives. A well thought through, easy to use governance dashboard can help the board to immediately prioritise resource allocation and emphasise those areas of business which require a stronger focus. Innovation The business playing fields are being seismically impacted by the Fourth Industrial Revolution (‘4IR’). Against this backdrop, it is important for the organisation’s leaders to embed an appropriate risk and change management culture which reflects the organisation’s values and drives balanced growth. Leveraging innovation to drive resilience has become a key differentiator in the evolving game of business. However, innovation need not be limited to new technology. The Corporate Governance Framework® can act as a catalyst to identify and critically review the suitability (and if necessary, the agility) of systems, processes and business models with a view to developing and adopting novel or unorthodox approaches to improving efficiencies and effectiveness. Talent management Whilst the 4IR has increased the demand for “digital talent”, few organisations are able to simply hire the talent they want and need, or to wait for enough graduates to be available. At this time, it is critical for leaders to leverage the outcomes of their governance framework to identify future workforce skills and experience requirements, monitor the effective performance of management and ensure that appropriate development, coaching and mentoring programmes are put in place to build a suitable workforce over time. In this rapidly evolving and turbulent business world, achieving long-lasting success is becoming increasingly difficult. Implementing a Corporate Governance Framework® which creates value and does not simply add bureaucracy, has become a critical business imperative. Stakeholders are becoming more vocal about their demands and are quick to publicly criticise attitudes and behaviours which are contrary to their expectations – often resulting in businesses (or their leaders) being side-lined or ultimately failing. The organisation must, therefore, have a clear view of its strategic and operational governance position which clearly separates the board’s accountability from management’s responsibility. Armed with this information, the board and its senior executives are empowered to exploit the organisation’s competitive advantages and drive overall sustainability. ENDS Words:799 For further information contact: CGF Research Institute (Pty) Ltd Jené Palmer CA(SA) (Lead Independent Consultant) Tel: +27 (0)11 476 8264 | Cell: +27 (0)82 903 6757 E-mail: firstname.lastname@example.org Web: www.cgfresearch.co.za CGF Research Institute (Pty) Ltd Terrance M. Booysen (Chief Executive Officer) Tel: +27 (0)11 476 8264 | Cell: +27 (0)82 373 2249 E-mail: email@example.com Web: www.cgfresearch.co.za Follow CGF on Twitter: @CGFResearch Click below to read more... Attached Files 20190527-Boards-that-play-the-infinite-game.pdf 233.47 KB Related Articles BOARDS THAT CREATE VALUE: CORPORATE GOVERNANCE FRAMEWORK® By Jene’ Palmer and reviewed by Terrance M. Booysen It has been painful to watch the likes of Lance Armstrong, Mike Tyson and Hansie Cronje sabotage their futures through poor decision-making. Similarly, many organisations and their boards have failed to demonstrate strong and responsible leadership qualities to motivate and drive their organisations to success. Awareness, decisiveness and accountability are some of the business leadership qualities required to achieve remarkable performances. The ‘buck’ stops with the board of directors and it is the board of directors who are ultimately held accountable for the success of the organisation. However, with the business landscape changing at an accelerating rate, risk management and decisive decision-making are becoming more challenging and business failures more prominent. A recent Harvard Business Review reports the failure rate for mergers and acquisitions to be between 70% and 90%. According to the United States Small Business Administration, only 44% of new businesses are still in existence after four years. Against this backdrop, how does a board create a sustainable organisation in what are clearly turbulent times? DEMYSTIFYING ISO MANAGEMENT SYSTEM STANDARDS AND RELATED GUIDELINES (2019-10-25) The number of management systems has risen dramatically in recent years, reflecting the increasing governance demands being placed on more and more organisations and their boards, and especially so in the wake of a myriad of governance scandals and corporate collapses locally and abroad. THE COMPANY SECRETARY: FROM COMPANY ADMINISTRATOR TO GOVERNANCE LEADER (2018-06-19) The role of a company secretary is broad and onerous to say the least and, if this post is not occupied by a competent person who has the appropriate knowledge and skills; the consequences can be the cause of significant organisational friction. The requirements and reporting lines of the position -- by their very nature -- give rise to potential conflict situations, and it is for this reason in particular, that the person appointed to the position must have the necessary maturity, experience and independence to properly carry out their duties and responsibilities, while being objective, impartial and independent. COMBINED ASSURANCE: IS YOUR ORGANISATION ADEQUATELY ASSURED? (2019-10-01) If we have both internal and external auditors, we have combined assurance, right? Wrong! For the board of directors to claim that they have discharged their obligations to implement a Combined Assurance Model requires much more than just the appointment of internal and external auditors. INTERNAL AUDIT REQUIRE GREATER REPRESENTATION ON THE BOARD (2019-08-05) A plethora of corporate governance codes has been written across the world, and in spite of their recommendations which inter alia seek to protect stakeholder interests and shareholder value, many governance failures and organisational collapses continue seemingly unabated. WHY ALL ORGANISATIONS SHOULD PUBLISH A MEANINGFUL INTEGRATED REPORT (2018-03-26) Most modern, well-governed organisations are acutely aware of the need for their businesses to be run in an ethical and socially-conscious manner and for this ethos to be communicated to their stakeholders. This being the case, it is well documented that the influential set of so-called Millennials -- unlike their older generational ‘Baby Boomers’ and Xennials -- actively support organisations whose tenets are based upon transparency, including the preservation of society and the environment. Comments are closed.