Enhancing business performance by humanising, modelling and measuring governance

Improving Governance, Enhancing Performance

It was Peter Drucker who said, “If you can’t measure it, you can’t improve it.” 

 

We know from the research that good governance improves organisational performance, uplifts productivity, secures investment and ensures longevity.

 

This is why we are so focuses on modelling and measuring governance in a practical and pragmatic way. To help you.

 

Our GOVindicia® assessment tool and governance model affords organisations the ability to benchmark your own governance position, both against the model and against codes of corporate governance requirements.

 

A programme of improvement can then be designed and implemented on the specific areas identified by the assessment.

Governance is not just about Rules

Governance involves many broad themes and some people have attributed principles or indicators, however there is a lacking practicality and humanism in this approach. 

 

What if, there was an operational framework, a practical map that clearly shows, not what it is, or how it can be defined, but how it can be achieved. The things we need to do to get it!

 

Several studies, including Arjoon[12], have emphasised the importance of a strong ethical organisational DNA to create and promote an effective corporate governance culture of trust, integrity and intellectual honesty. These studies go on to suggest that the way forward for effective corporate governance is to strike an optimal balance between rules-based and principles-based approaches.

 

This concurs with the view of Staite[13], where she notes governance “…is developed, achieved and maintained by the continual application of effort, self-awareness, and mutual trust. 

 

It cannot be imposed by the introduction of standards, rules or protocols. 

 

Rather, it is continually co-produced by members of the organisation, in all their diverse roles, by the way in which they learn how to blend rules, processes and controls with strong values and positive behaviours…”

 

It’s simply no longer enough, to depend upon policies, procedures and controls.

 

Decision-making and the implementation of those decisions, interfaces, almost continually, with our personal values, with our experiences, and with our beliefs.

 

Governance is a way of life within our organisations.

Making governance pragmatic

There are many models of governance. There are many theories. GOVindicia® draws upon the three principal theories of:

Agency Theory[14]

Stewardship Theory[15]

Stakeholder Theory,

which has its origins in 1951 and Frank Abrams, Chairman of Standard Oil who said

‘The job of management is to maintain an equitable and working balance among the claims of the various directly interested groups - stockholders, employees, customers and the public at large’

GOVindicia® has also been aligned against numerous global corporate governance codes, as well as the emerging ISO37000 Standards of Organisational Governance and affords organisations the ability to use a practical and pragmatic approach to governance.

The foundation of the GOVindicia® model is organisational culture, which integrates with both decision-making and decision implementation.

 

These each have three periphery components, meaning that under this model there are nine pragmatic areas that an organisation can focus to improve their overall governance and performance.

All elements and periphery components are interconnected.

 

You cannot disconnect the decisions being made in an organisation and the culture, human behaviour and values extant within the organisation.

[12] Arjoon, S. Striking a Balance Between Rules and Principles-based Approaches for Effective Governance: A Risks-based Approach. J Bus Ethics 68, 53–82 (2006).

[13] Staite, C. (2019). States of Guernsey, Meeting the challenge: towards better governance. The Committee for Home Affairs: Governance Review Report

[14]  Jensen, M. and Mecklin, W. (1976) ‘Theory of the Firm: Management Behaviour, Agency Costs and Ownership Structure’

[15]  Davis, J. H., Schoorman, F. D., & Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management Review, 22, 20–47.

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"Enhancing performance 

through governance"

© 2020-2021

by Perrin Carey®

GOVindicia®

Perrin Carey Limited is a company registered in Guernsey under company no. 68118