A&O Consulting – Governance to Grow
Words by A&O Consulting
Following our Governance to Grow webinar (delivered in November as part of the Founders Toolkit series), and for those that couldn’t attend, we have included a summary read out of the key elements you should consider when thinking about how you approach your company’s governance arrangements:
Governance is the framework by which senior leadership set and oversee the strategic direction of a company, and includes the processes by which key decisions are agreed, implemented, and reviewed across an organisation. In this way, good governance provides the foundations for a successful business, enabling effective oversight and decision making, and clear communication between all levels of the organisation.
A firm’s governance arrangements should be proportionate to the size, complexity and nature of the business. A good governance framework is not necessarily one that has additional committees or policies and procedures – the purpose of governance is not to overburden a firm with bureaucracy, but rather to support the business in overseeing and executing on its strategy in the right way.
An effective governance framework encompasses a range of factors, including:
Roles and Responsibilities – Senior leadership should have clearly defined and documented roles and responsibilities, with clear lines of accountability between business lines and functions.
Key Committees – A company is expected to have in place a Board and an Executive Committee, with formal arrangements in place to determine their purpose, membership, and to designate clear decision making authorities between them.
Information flow – Senior leadership should be receiving regular management information on business activities – including financial performance, risk and strategy – on a timely basis within relevant forums; this involves tailored reporting materials, provided in advance and clear escalation thresholds between forums.
Operation – A company is expected to ensure that its governance framework operates effectively in practice (in addition to being suitable in its design), which includes ensuring that committee discussions are appropriate in nature with a sufficient level of debate and challenge.
Strategy –The governance framework comprises the internal structure and processes by which a firm agrees, implements, and reviews a business strategy that aligns across all business lines and functions (including finance, risk and controls, and culture).
Risk and Controls – Senior leadership oversee a proportionate risk management framework, ensuring business strategy is in line with risk appetite and that a proactive approach is taken to managing risk.
Culture & People – The Governance framework is a means by which senior leadership establish and drive the focus and agenda on culture and people through the organisation.
If you have any questions on the above, or want to know more, please don’t hesitate to get in touch with A&OC at aocscaleups@allenovery.com and we would be delighted to assist.
Don’t forget to access our free know-how site containing further resources on governance, risk management, culture, compliance, and business model and strategy - see video demo here: https://video.ibm.com/embed/recorded/128312888. Access can be requested using the same email address above.