The need for an effective board is important in all industries and sizes of organisations. Governance is too often conveniently associated to listed companies and financial services. Our services are aimed at Boards and Executives or Management of organisations that range from SME’s to Listed entities, including, private, public, family and not-for-profit organisations.
Changes in the Governance Landscape
Many regulators in the public and private sector now have ‘outcomes based’ regulation that follows the “comply or explain” principle of the UK Corporate Governance Code as laid out for the FTSE 350. This means that the organisation has to determine the applicability, implementation and monitoring that it wishes to implement and not purely follow a checklist and not take full ownership.
The regulator will then, on an organisation by organisation basis, determine if their implementation of the regulations and abiding thereby is appropriate. A moving and undefined goalpost which makes many executives, company secretaries and directors very uncomfortable.
Top performing Boards are open to being transparent to stakeholders. Stakeholders are demanding communication and understanding of what happens at Board level. This ownership of governance by Boards is what investors are calling for.
What is the effective balance between what occurs in the Board room and what is known as general public knowledge? In the private sector these barriers are higher than they should be. In the public sector, the concept of a public board meeting is more acceptable and practised but some matters are still reserved for the private board meeting.
The goal is the balance between giving directors the rein to direct and lead and reporting back without undermining their own ability to perform their own roles.