passion and prudence: signs of good governance ilm 2010 bangkok, thailand murray baird...
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Passion and Prudence:Signs of Good Governance
Passion and Prudence:Signs of Good Governance
ILM 2010 Bangkok, ThailandMurray [email protected]
ILM 2010 Bangkok, ThailandMurray [email protected]
Welcome…Our time today will be
Welcome…Our time today will be
informalnon prescriptiveaware of diversity of approacheslearning togetherA mix of basics and stretches
informalnon prescriptiveaware of diversity of approacheslearning togetherA mix of basics and stretches
RoadmapRoadmap
What is governance?Biblical approaches to
governanceWhat does a board do?What makes a good board?Some tips on good governance
What is governance?Biblical approaches to
governanceWhat does a board do?What makes a good board?Some tips on good governance
Governance …Governance …
What is it? Some definitions Two sides of governance Management vs. governance? Biblical reflections on governance
Accountability and communication
What is it? Some definitions Two sides of governance Management vs. governance? Biblical reflections on governance
Accountability and communication
1
Latin: To pilot or steer the ship
Greek – kubernetes – helmsman of a ship (direction giving)
American - Cybernetics - the study of organization, communication and control in complex systems – connectedness
Cyberspace – the place of connectedness
Latin: To pilot or steer the ship
Greek – kubernetes – helmsman of a ship (direction giving)
American - Cybernetics - the study of organization, communication and control in complex systems – connectedness
Cyberspace – the place of connectedness
What is Corporate Governance?
What is Corporate Governance?
“The System by which Entities are directed and controlled” Australian Institute of Company Directors/Cadbury Report 1992
“The System by which Companies are directed and managed” Australian Stock Exchange 2003
“The way in which an organisation is steered and stewarded” Institute of Chartered Secretaries and Administrators
“The System by which Entities are directed and controlled” Australian Institute of Company Directors/Cadbury Report 1992
“The System by which Companies are directed and managed” Australian Stock Exchange 2003
“The way in which an organisation is steered and stewarded” Institute of Chartered Secretaries and Administrators
Some definitionsSome definitions
“Corporate Governance concerns the Directing of the Company as distinct from the Managing of the Company” Directors Manual CCH
Directors set the direction; Managers implement the strategies.
Directors are the Mind; Managers are the Hands
“Corporate Governance concerns the Directing of the Company as distinct from the Managing of the Company” Directors Manual CCH
Directors set the direction; Managers implement the strategies.
Directors are the Mind; Managers are the Hands
Governance v. Management?Governance v. Management?
Two sides of the Governance coinTwo sides of the Governance coin
steward and steer managed and
mentored accountable and
creative protect and direct manage and
direct accountable and
entrepreneurial prudence and
passion
steward and steer managed and
mentored accountable and
creative protect and direct manage and
direct accountable and
entrepreneurial prudence and
passion
The Directors’ DilemmaThe Directors’ Dilemma
“The essential board tasks are simultaneously to drive the enterprise forward whilst keeping it under prudent control”
Professor Bob Garratt Cass Business
School , London.
“The essential board tasks are simultaneously to drive the enterprise forward whilst keeping it under prudent control”
Professor Bob Garratt Cass Business
School , London.
Biblical approaches to decision making
Biblical approaches to decision making
A sampling … The Direct Presence of God (Exodus 13:21 – Pillars of
cloud and fire)
Decision by Lot (Exodus 28:15-30 – Urim & Thummin, Acts 1:26 – The lot fell to Matthias)
A Council of Leaders (Acts 15:28 “It seemed good to the Holy Spirit and to us …”)
Dreams & Visions (Acts 16:9 – Paul had a vision)
Leadership Succession (Titus 1:5 Appoint elders as I directed you)
The Spiritual Gift of Leadership – Rom. 12:6-8 “If a man’s gift is … leadership, let him lead diligently.”
A sampling … The Direct Presence of God (Exodus 13:21 – Pillars of
cloud and fire)
Decision by Lot (Exodus 28:15-30 – Urim & Thummin, Acts 1:26 – The lot fell to Matthias)
A Council of Leaders (Acts 15:28 “It seemed good to the Holy Spirit and to us …”)
Dreams & Visions (Acts 16:9 – Paul had a vision)
Leadership Succession (Titus 1:5 Appoint elders as I directed you)
The Spiritual Gift of Leadership – Rom. 12:6-8 “If a man’s gift is … leadership, let him lead diligently.”
Principles from ScripturePrinciples from Scripture
Reliance upon the Holy Spirit An atmosphere of trust and unityClearly defined lines of
accountability and authorityOpen and continuous two-way
communication
Reliance upon the Holy Spirit An atmosphere of trust and unityClearly defined lines of
accountability and authorityOpen and continuous two-way
communication
Relationships in good governance
Relationships in good governance
Owners
Board
STAFF
Customers
CEO
Aut
horit
y
Acc
ount
abili
ty
Com
mun
icat
ion
Owners – the stakeholders/
initiators
Field board
Field Leader
Key workers
Ministry recipients / our
world The Imperfect Board Member, Jossey-Bass, 2006
What does a board do? What does a board do?
Models and Lists A simple model List of 12 things for a board to do
Models and Lists A simple model List of 12 things for a board to do
2
A model of what a board does
A model of what a board does
Policy making
Strategy formulation
Future Oriented
Provide accountability
Monitoring & Supervising
Achieve Mission working through CEO
Achieve Mission working through CEO
External Role
Internal Role
Past & PresentOrientation
Compliance roles Performance roles
Source: Tricker, 1994:149
What Boards Do #1What Boards Do #1
Determine Mission and Purpose of Organisation
Select, Support and Review the CEO
Approve and Monitor Programs and Services
Ensure Adequate ResourcesEffective Fiscal Management
and Legal Compliance
Determine Mission and Purpose of Organisation
Select, Support and Review the CEO
Approve and Monitor Programs and Services
Ensure Adequate ResourcesEffective Fiscal Management
and Legal Compliance
What Boards Do #2What Boards Do #2
Engage in Strategic PlanningSelect and Orient Board MembersUnderstand Relationship Between
Board and StaffEnhance and Protect ReputationOrganise so Board operates efficientlyRisk Management
Engage in Strategic PlanningSelect and Orient Board MembersUnderstand Relationship Between
Board and StaffEnhance and Protect ReputationOrganise so Board operates efficientlyRisk Management
What makes a good board?
What makes a good board?
5 essential qualities of a board member
Structuring a board
5 essential qualities of a board member
Structuring a board
3
Essential qualities of Board members
Essential qualities of Board members
Teamwork
Time
Teamwork
Time
Heart
Vision
Fiscal
Heart
Vision
Fiscal
Source: The Imperfect Board Member, Jossey-Bass, 2006
Structuring the boardStructuring the board
Composition: Right mix of: skills, experience, personality, understanding of the organisation, context and constituencies (stakeholder groups)
Be intentional about what you needSuccession planning
Use a nomination or succession committee Chair takes the lead
Rotation PolicyCo-option powers
Composition: Right mix of: skills, experience, personality, understanding of the organisation, context and constituencies (stakeholder groups)
Be intentional about what you needSuccession planning
Use a nomination or succession committee Chair takes the lead
Rotation PolicyCo-option powers
Some tips on good governance
Some tips on good governance
Assessing the board Good directors The Chair What works
Assessing the board Good directors The Chair What works
4
Assessing the BoardAssessing the Board
Define your Functions Rate how you are doing Ask for improvement
suggestions Collate and identify areas for
improvement Discuss priorities Plan and Act
Define your Functions Rate how you are doing Ask for improvement
suggestions Collate and identify areas for
improvement Discuss priorities Plan and Act
www.boardsource.org
www.federationpress.com.au
www.boardsource.org
www.federationpress.com.au
Signs of good DirectorsSigns of good Directors
Guide and monitor ManagementUnderstand the field’ and the economic
contextSeek specialist knowledge or expert
advice when requiredBring an informed, independent
judgementActive participation without dominatingEnquire into untoward circumstancesTeam Player
Guide and monitor ManagementUnderstand the field’ and the economic
contextSeek specialist knowledge or expert
advice when requiredBring an informed, independent
judgementActive participation without dominatingEnquire into untoward circumstancesTeam Player
The ChairThe Chair
Role of Chair:Set it out in a charter or role
descriptionGatekeeper of information flow to the
board- must not prevent key information flowing
Candour and confidentiality without compromise
Foster constructive collegialitySet the standardsWork with senior management
Role of Chair:Set it out in a charter or role
descriptionGatekeeper of information flow to the
board- must not prevent key information flowing
Candour and confidentiality without compromise
Foster constructive collegialitySet the standardsWork with senior management
What Works Best?What Works Best?
Small is Good - 8-12Take responsibility for succession
and balanceService your Board and
Communicate between MeetingsRefresh and renewChair is CriticalHave an Annual Agenda CycleGet good advice
Small is Good - 8-12Take responsibility for succession
and balanceService your Board and
Communicate between MeetingsRefresh and renewChair is CriticalHave an Annual Agenda CycleGet good advice