{"id":1468,"date":"2019-06-08T23:48:32","date_gmt":"2019-06-08T23:48:32","guid":{"rendered":"http:\/\/www.realworldconsulting.kiwi\/rwc\/?p=1468"},"modified":"2019-06-09T00:05:34","modified_gmt":"2019-06-09T00:05:34","slug":"the-good-governance-practices-book-doesnt-need-to-be-re-written-it-only-needs-to-be-taken-heed-of-and-acted-upon","status":"publish","type":"post","link":"https:\/\/www.realworldconsulting.kiwi\/rwc\/rwc-blog\/the-good-governance-practices-book-doesnt-need-to-be-re-written-it-only-needs-to-be-taken-heed-of-and-acted-upon\/","title":{"rendered":"The “Good Governance Practices” Book Doesn’t Need to be Re-written…It Only Needs to be Taken Heed of and Acted Upon"},"content":{"rendered":"

I continue to enjoy the various posts\/ articles published in the LinkedIn environment that centre on the topic of what comprises “good governance”. Some time ago I contributed my thoughts on this important topic also – and included a Chapter on this subject in my\u00a0first book<\/a>\u00a0that I had published in 2016.\u00a0<\/span><\/p>\n

I think it’s worthwhile highlighting here a few salient points in respect of what constitutes “good governance” with a view to help particularly directors of SME scale businesses. Here’s a\u00a0starting conversation<\/a>.\u00a0<\/span><\/p>\n

In a nutshell, I have found that a recurring line of reasoning as to why a business owner\/ director cannot lift their game where thinking and acting at a governance level is concerned is simply due to their perception that the scale of their operation won’t allow them to subrogate sufficient\u00a0operation level<\/strong>\u00a0activities to appropriately skilled\/ qualified\/ experienced employees, for these other people to take care of what is required in this regard.<\/span><\/p>\n

When I dig deeper into the psychology of the above thinking, I see that it boils down to reluctance on the business owner’s part to “trust” such an employee to do what is required – and do so in a way which is strictly in accordance with how the employer would perform the task and to their standard of execution.<\/span><\/p>\n

In my view and experience, owners of particularly SME’s cannot hope to markedly improve their governance capability and prowess unless they transfer as many operational level activities to other people within their organisation who are competent\/ capable to carry-out the required tasks. At the end of the day, this amounts to “trusting” and “empowering” those who you need to perform operational tasks, so that they can create the time and “head-space” opportunity for you to concentrate on governance considerations\/ practices.<\/span><\/p>\n

As mentioned in the book that I had published in 2016, here are some more practices that have been proven to help directors (regardless of the scale of operation in question) become effective governance leaders of their organisations…<\/span><\/p>\n

Establish a ‘Board Code of Conduct<\/strong>‘. This important document should be signed by each director who is elected onto a Board of Directors. The most important function that this document serves is to “unite<\/strong>” the focus and direction of the given set of directors, to then minimise\/ avoid occasions when a Board resolution is later not supported (or worse still, opposed) by one or more director who voted against the given resolution at the time the resolution was put to the vote.<\/span><\/p>\n

The reason why it is so important that a Board\u00a0demonstrates unanimous support<\/strong>\u00a0when a Board resolution is communicated to all shareholders, is that if one or more dissenting Board member decides to communicate their disagreement with the formed resolution to one or more shareholder this could have the effect of causing shareholders to lose confidence in the unity and decision-making maturity that they feel exists among Board members – and this lack of confidence could impact their own commercial performances.<\/span><\/p>\n

So a ‘Board Code of Conduct’ often includes a provision which specifies that when any given Board resolution is formed\/ made, the Board as a whole (despite opposing votes being cast by the minority of dissenting directors at the time) undertake to support the resolution when it is communicated to the wider shareholder population. This is a superb measure to bring into play to help solidify a desirable workplace culture – and it is remarkable to see how quickly directors gain the respect and confidence of shareholders when directors demonstrate a good amount of solidarity\/ unity to those who they are elected to represent.<\/span><\/p>\n

‘Code of Conduct’ documents that I have been involved in composing to date have also typically included these provisions:<\/span><\/p>\n