While there are many definitions of Corporate Governance, all are consistent with the view that the Board of Directors are the primary force of influence in its implementation.
Boards influence a business by (i) setting the strategic vision, (ii) articulating policies to influence culture and set down controls, and (iii) designing and resourcing the organisation structure by which the business should operate. In recent posts I have suggested that (i) the core policy statements should be separated from the Roles & Responsibilities, Tasks and the Procedures documentation and (ii) the core policy statements should be concise (targeting single page policies).
The objective in suggesting this is to seek to re-direct the focus of Board discussion to the core policies of the business, ensuring their alignment with commercial strategic goals and the board’s risk appetite.
Building on this approach, and further supporting the shift of emphasis from process and procedures back to core policy, it will be helpful to the Board and its Committees, if, at the annual review of the policy, the Executive provides:
- Some narrative from the policy owner describing the structures, processes and controls which have been put in place to implement the policy; and
- An attestation from the individual responsible managers that the controls put in place have operated effectively during the period.
With confirmation provided that the policy has been fully and appropriately implemented, the conversation at board can focus on (i) do the directors have a consistent view of what the company policy should be?, (ii) is it aligned to the company’s strategic goals?, and (iii) does it protect the business from exceeding the board’s risk appetite?.
October 2020To discuss any of your Governance needs call Governance Matters on +353 (0)87 6408750 or email your query to firstname.lastname@example.org