Understanding Your Evaluation of Each Principle of the UK Corporate Governance Code 2018 – Principle A

Understanding Your Evaluation of Each Principle of the UK Corporate Governance Code 2018 - Principle A

Outcomes-based Principles

This is the first of a series of articles where we will unpack some of the desired outcomes embedded in the principles of the UK Corporate Governance Code 2018 (“Code”). The Code requires the Board to focus on how the Principles have been applied, articulating what action has been taken and the resulting outcomes.

To do this a Board needs to understand what outcomes it should be striving for.

The Code, being principles-based as opposed to rules-based, sets best-practice goals in the form of desired outcomes as well as a set of processes.

The desired outcomes are stated as lofty and praiseworthy goals; the processes are, in general, a compliance list.

We are principally concerned with the desired outcomes, which by their nature may never be fully achieved by the Board, but alignment with which must nevertheless be continuously strived for.

The desired outcomes are not only what the regulator would like to see Boards striving for but reporting against them is what an interrogative stakeholder will use to assess the raison d’etre or purpose of a company, as well as the direction of its moral compass. Therefore, formulating an appropriate response to every desired outcome should be an important and necessary annual core focus of the Board.

This article will deal with Principle A, which gets straight to the point. Like most of the Principles, it is worded in a manner which requires the Board to deliver a considered, relevant and narrative response. Anything remotely ‘tick-box’ in approach or smacking of self-assuredness could be deemed inappropriate, leaving a Board open to well-earned criticism for failing to understand the purport of the Principle.

So how to formulate a considered, relevant and narrative response?

Principle A

A successful company is led by an effective and entrepreneurial board, whose role is to promote the long-term sustainable success of the company, generating value for shareholders and contributing to wider society.

Desired outcomes:

We start by extracting each of the desired outcomes embedded in the Principle. There are several:

• an effective Board;
• an entrepreneurial Board;
• a Board which promotes the long-term sustainable success of the company;
• a company which generates value for shareholders;
• a company which contributes to wider society.

Taking only the outcomes above, we review the eight provisions in this Section 1 on Board Leadership and Company Purpose for guidance on the depth of issues to be considered in building the Board’s related outcome narrative:

Outcomes matrix:

Principle A, Provision 1

– an effective Board;
o Prov 1: The Board should address the sustainability of the company’s business model
o Prov 1: The Board should address how its governance contributes to the delivery of its strategy

– an entrepreneurial Board;
o Prov 1: The Board should assess the opportunities available to increase or ensure future success

– a Board which promotes the long-term sustainable success of the company;
o Prov 1: The Board should assess the basis on which the company preserves value
o Prov 1: The Board should assess the risks that could interfere with the future success

– a company which generates value for shareholders;
o Prov 1: The Board should assess the basis on which the company generates value

– a company which contributes to wider society.

To complete this exercise the rest of the seven provisions need to be mapped in the same way.

Steps to own delivery against the outcomes:

Above we have shown the beginning of the matrix needed to ensure the narrative is valid, robust and will stand up to scrutiny. In the above example, we have linked to these desired outcomes only the requirements in Provision 1 as an example of how to address this second step.

The third step would be responding to this matrix complete as relevant from all eight Provisions as they are relevant, which evidence that these desired outcomes are not just compliance processes to tick off, but factors which, if fully considered, go to the core of the business, its purpose and its strategy.

We have evidenced how each of these desired five outcomes for the first Principle are separate lofty and praiseworthy goals requiring the annual considered attention of the Board.

The fourth step would be to discuss the Board’s position regarding each outcome, a process which could be done in the form of a gap analysis – structured approach or a discussion – conversational approach.

The fifth step would be to formulate the general steps a Board should follow in order to strive for improving or addressing the gaps evident in each desired outcome.

The sixth step would be the Board, with the guidance of the Company Secretary, to define any actions needed to deliver progress on whichever outcomes this is required.

The seventh step would be Board monitoring and holding to account actions to deliver the outcomes.

The last step being the creation of the narrative annually of the company’s mapping against these outcomes.

Key message of Principle A

In our view, Principle A defines the highest order of achievement – an effective board.

Therefore, directly in relation to Principle A, we would expect the Board to:
– include a ‘tone at the top’ statement which defines how the Board will lead, set its moral compass, what it expects delivered and how the company should embed this culture, such that delivery of the outcomes becomes seamless
– be complemented with competencies to allow for entrepreneurialism to flourish within the risk appetite of the business
– have risk assessment competencies at board level to consider the corporate and reputational risks, combined and contagion risks and the risk register as built by the company
– have the right composition and structure to deliver and effective board
– be led by an effective Chair, aligned to the business cycle of the business, delivering a clear message of the appropriate business culture
– consider the shareholders, but equally in terms of the Companies Act 2006, Sections 171 to 177, particularly S 172, all stakeholders, both internal and external
– include in the stakeholder matrix, the wider society that provides the purpose of the company
– consider its assessment of success as more than a forecast in the form of extrapolated numbers, but to include robust strategic planning, delivery to defined plans and accountability
– review the policies, procedures, plans and other relevant documents that will support embedding the actions and outcomes, but also the cultures desired.

Each year the Board will assess its alignment to the outcomes, aiming for continuous improvement.

Stakeholder assessment of the Board:

A Board needs to keep in mind that an interrogative stakeholder will scrutinise any disclosure relating to these steps and processes, or lack thereof, to assess the credibility of the Board’s statements around any desired outcome.


Genius’ Code Outcomes Plan

Our Outcomes Plan will create the framework for a Board to deliver against and meet the requirements of Principle A. We will support the matrix formulation, the gap analysis, the determination of actions, assessment of accountability and finally supporting the creation of the robust and supported narrative against the outcomes.


Authored by John Nassel-Henderson and Sharon Constançon

Visit the website here

By |2019-11-06T13:05:28+00:00November 6th, 2019|Uncategorized|Comments Off on Understanding Your Evaluation of Each Principle of the UK Corporate Governance Code 2018 – Principle A

How Open to Constructive Criticism Are You?



The larger the company and more senior the Board Directors and Chairman, the lower the appetite to receive constructive criticism.

Although long-serving Directors will know their company inside out, they have reached a point where they are competent to challenge, but uncomfortable in receiving constructive criticism.

“New Blood”

When “new blood”, as in new Directors or those with different skills are introduced, there is a natural resistance to these disruptive forces. A Board evaluation can equally be uncomfortable where Directors are able to view themselves through the eyes of an outsider. All are perceived in some way or another as a threat.

Directors and particularly Chairmen can become entrenched in their ways; where they have been in the role for up to nine years, they have found a place of personal comfort and naturally do not want disruption during their “watch”.

We are human

These human, emotional reactions are totally counter-intuitive to what we rationally know as a way to support continuous improvement. It is always rewarding to see the healthy approach taken by some Directors when constructive comment is taken positively.


What’s your view on the tenure of Directors – Is nine years too long or not long enough, particularly in the case of the Chairman?

By |2019-09-11T13:17:49+00:00July 31st, 2019|News & Events, Uncategorized|0 Comments

“Asleep at The Wheel? What is the role of a NED regarding board effectiveness”

Sharon Constançon will be speaking at the CISI Corporate Finance Forum on 24 April.

“Asleep at The Wheel? What is the role of a NED regarding board effectiveness” will look at case studies where board effectiveness has been beneficial to a business, but also where the opposite has been the case as well as considering other areas relating to board effectiveness that NEDs need to consider.

By |2019-08-01T12:41:39+00:00April 15th, 2019|Uncategorized|Comments Off on “Asleep at The Wheel? What is the role of a NED regarding board effectiveness”

Bullying in the Board Room; an Emotional Tsunami

bully-free-zoneMinorities suffer the impact whilst the solutions to exit the patronising epidemic is everyone’s responsibility
By Karen Bertoli

Subtle and blatant bullying is not the most “feel good” topic to analyse in an already tumultuous global business environment. However, there is no skirting the issue (no pun intended); and bullying in the Board Room is infectious often creating its own version of Chinese whispers with subtle connotations and falsities undermining relationships, communication and Board effectiveness..

Let’s first define common bullying behaviours

Interrupting, ignoring, speaking above others, forming silos, patronising responses, not taking a challenge seriously, not listening nor taking advice, assuming an incorrect level of knowledge, undermining competencies, gender, age or ethnicity ability framing (asking the female director to make the tea or take the minutes) … and so I could continue. Consciously or sub consciously, thereby neglecting the duty of governance as a Director responsible to shareholders and stakeholders.

The common or blatant bully has aggressive, blocking, imposing or negative body mannerisms, bad or loud language, excessive technical word usage, pigeon holes individuals and treats others as inferior.

The more dangerous, subtle and, often invisible to others, a style of bullying includes primarily patronising engagement, pigeon holing, framing and other engagement faux pas listed above.

It is important to understand who is the target of bullying

Women and “other minorities” which here may be defined as not the majority in the group of the Board based on gender, ethnicity, religion, age, location, school, education, competencies, professional training, experiences, direct subject knowledge, EQ or IQ focus and role titles …. and so I could continue!!

Bullying is not limited to recipients being women, often any minority group which includes minorities for example that have different skills sets and experience. I have witnessed a vast variety of bullying behaviour including man on man, to the extreme of a CEO bullying a Chairman, GFD bullying a CEO and a Chairman bullying a SID, just to identify a few.

There is no doubt that humans by nature generally gravitate towards those who are similar as it’s the most comfortable. We must remember that the purpose of a Board is to offer independent guidance and governance to a Chief Executive and management.

In contrast, best practice, because of corporate experiences, evidences that a diversity of perspective, challenge and input provides for a more robust conversation, which will lead to the right decisions.

Neutralisation of ancient mindsets

Communication, listening and being made aware of such behaviour patterns is crucial. It is not easy to see this fully without an external evaluator explaining how the interplays are impacting the Board’s effectiveness. Good governance is a powerful support as is process and structure; these are leading guides to help prevent and address bullying in the Boardroom.

It is also the responsibility of the bullied to work out, in that environment, how to address the issue for the greater improvement in the Board’s effectiveness. This is not a single conversation, this is a time and people game that requires good communication, trust, applied EQ (social awareness), persistence and third party help internally, and for full benefit, external input, handled appropriately.

If business and Boards do not address these ineffective contributors, the subtle (most often) and less subtle bullying behaviours will continue to challenge minorities and Board effectiveness. Governance, leadership, structure and culture will support discussions existing in the right forum, minuted, actions defined and accountabilities set.

Time to change?

With the rise in understanding the value of diversities and given we operate in a more open worldwide community, bullies in the Boardroom should find themselves losing steam as Board effectiveness is a genuine focus.

Chairmen, you can often be unwitting culprits, but it is your call to lead on “we embrace diversity and we have a safe culture for all to contribute”. This tone from the top will underpin an effective Board.

> Contact Us

By |2017-11-20T12:34:47+00:00November 20th, 2017|Uncategorized|Comments Off on Bullying in the Board Room; an Emotional Tsunami

Diversity Today and Moving Forward


It’s not about diversity it’s about acceptance. This is where we are – so what now?

By Karen Bertoli

CEOs being incentivised on diversity seems inappropriate. Extra coaching for women to get to the top is painful for them to absorb being singled out. Identifying the best people for the benefit of a company’s success seems more logical. Years have been spent trying to understand how we got where we are today with regards to women and men and the lack of representation in the board room and top roles. Enough already on the one diversity the market harps on – it is still only one of the many diversity challenges business and people face.

Developing fair practices for talent scouting and hiring where all candidates are given equal measure doesn’t seem too impossible in our new world of data crunching and metrics tracking, but yet we are not yet getting it right…. When role briefs require a titled person!!

Sir Winfried noted “Lloyds want, by 2020, 40% of management roles to be filled by women.” This we know will be a challenge (but again we measure just one diversity). Perhaps the onus is on big business to create and set the standard of the balanced cultural corporate skeleton.

Responsibility for change needs accountability and liability. A Chairman’s one role is good governance. The Board’s role is a fiduciary duty to shareholders and stakeholders. If we are to see change which is more inclusive, we need to create a forum and a measure.  How about a Board Committee to address “Diversity”, a remit that ranges from Boardroom to Customer. Again, I ask, are we creating a false space, should we not be doing the right thing naturally. Should it not be normal that we create a balanced environment. We should accept that we are all different and bring different perspectives and capabilities? Unfortunately, we know we only achieve what we measure.

Finally, one crucial element which needs to be built into this never-ending paradigm of lack of equal representation is the third party coming to the table. How will women and men fair with Robots performing active roles? This is a reality, it is already happening. Robots are not our enemies but are future reality. However, if we cannot seem to actively solve past and current complexities, how in the world will we manage with the influx of technical driven characters who are programmed to be “us” and we are not even sure how to integrate “us” correctly yet.

Something to ponder until next time. . .

By |2019-05-25T05:37:04+00:00October 26th, 2017|Uncategorized|Comments Off on Diversity Today and Moving Forward

NEDonBoard – How do you become an (effective) Non-Executive Director?

This specialised course is dedicated to business leaders on track to become a non-executive director or committee chairman, or those newly in a non-exec role. It is designed to also benefit directors and stakeholders needing to strengthen their knowledge in implementing an effective boardroom.


For further information please click here:


By |2017-10-25T10:43:14+00:00October 25th, 2017|Uncategorized|Comments Off on NEDonBoard – How do you become an (effective) Non-Executive Director?

Sharon Constançon and David Howells Masterclass – The Effective Director – GTA University Centre – March 15th – 12 to 8pm

Sharon Constancon, together with David Howells,  will provide a mixture of presentations / practical exercises / case studies / and delegate discussion in order to achieve a palatable exchange of information, experience, and ideas from both presenter and delegates. 

The aim of the Masterclass is to provide delegates firstly with a clear understanding of just how powerful director behaviour is in affecting Boardroom decision making and overall Board effectiveness; and secondly to examine in what ways behaviour can be altered to produce improved decision making and Board performance.

Course at a Glance

  • Date: 15 March 2016

  • CPD Points: 8

  • Course Cost: £450.00

  • Course Length: 8 hours (12.00pm – 8.00pm)

  • Location: GTA University Centre, Guernsey

  • Tutor: Sharon Constançon and David Howells


By |2016-03-03T19:32:11+00:00March 3rd, 2016|Uncategorized|Comments Off on Sharon Constançon and David Howells Masterclass – The Effective Director – GTA University Centre – March 15th – 12 to 8pm

Sharon Constançon – CPD Session – Common Board Room Mistakes – 15th March – Guernsey University Centre

The aim of the session is to provide delegates with a clear understanding of what goes wrong on Boards, why it does so, what part individual character traits have in the equation, and how Board members and Chairmen can alter behaviour in order to create a more effective Board.

Course at a Glance

  • Next Start Date: 15 March 2016
  • CPD Points: 1.5
  • Course Cost: £60.00
  • Course Length: 1.5 hours (8.30am – 10.00am)
  • Location: GTA University Centre, Guernsey
  • Tutor: Sharon Constançon


By |2016-03-03T19:27:36+00:00March 3rd, 2016|Uncategorized|Comments Off on Sharon Constançon – CPD Session – Common Board Room Mistakes – 15th March – Guernsey University Centre

Genius Methods Masterclass on Board Behaviour – Sharon Constancon – David Howells – Andrew Kakabadse

Sharon Constançon led a highly productive and enjoyable Masterclass on ‘Board Behaviour’ on the afternoon of November 24th at her London offices. A capacity room heard excellent presentations from David Howells of Kiddy International, and Sharon Constançon. They heard a formal case study and participated vociferously in a practical exercise. Later in the evening, after breaking to enjoy some more relaxed socialising and discussion, we were delighted that Professor Andrew Kakabadse of the Henley Business School came to address the delegates and provide a fascinating insight into his research to date.

This was the first in a programme of Masterclasses which will be run though 2016. Anyone interested in attending any of these should contact Genius Methods on events@geniusmethods.com 

By |2015-11-30T19:30:34+00:00November 30th, 2015|Uncategorized|Comments Off on Genius Methods Masterclass on Board Behaviour – Sharon Constancon – David Howells – Andrew Kakabadse
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