The Royal Commission: Corporate culture spotlight – Where is all this heading
Article Two – How did we get here?
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has thrown the spotlight on corporate governance and culture at some of Australia’s largest and oldest companies. The almost daily acknowledgement of errors (or worse) by senior executives and CEOs for a litany of issues has exposed serious concerns, not only about how these companies are governed, but also about the people working for them. Against this backdrop, we have to ask ourselves how corporate Australia got into this position.The Royal Commission: Corporate culture spotlight – Where is all this heading
Article One – Setting the Scene.
Headed by Commissioner Kenneth Hayne AC QC, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was established in 2017 to inquire into and report on misconduct in the banking, superannuation and financial services industries. The Commission was given the power to recommend changes to the Australian Government that is necessary to improve:Dealing with Disputes in the Boardroom
In accordance with their fiduciary duties to the organisation, directors have a responsibility to implement good governance. The board is expected to operate collegially. Each director brings to the boardroom their own particular skills, knowledge and experience, and has a duty to apply that skills, knowledge and experience. An effective board seeks to stimulate the flow of ideas, identify key issues, consider alternatives and make informed decisions.
The value of a board of advisers for family business
An advisory board is a good choice where the family owners or the company need ongoing professional advice and contacts. This is especially the case when their own statutory boards of directors comprise only family members and perhaps a few non-family senior managers from the company. Nonetheless, establishing an advisory board is a major step for any family business. For those family businesses that are considering it, or those that have already done so, it is worthwhile discussing the value an effective board of advisers can bring.
The Next Stage of Growth for eG
After 22 years of organic growth to become Australia’s largest governance consulting practice, Effective Governance is excited to announce that we now have the ability to offer our clients the extensive legal services of HopgoodGanim.
Boards micromanaging
A common refrain I hear from CEOs and senior managers when discussing their boards is that they micromanage, i.e. the directors delve too deeply into operational matters. This is not only frustrating to management, but wastes the board members’ often limited time to do their actual job – directing, NOT managing the organisation.
Getting the most from strategy retreats
Strategic development is a joint board-management responsibility. It is the key stage of the strategy process where the board and senior management team work together to develop the organisation’s strategy. At this stage, the attention is on the top-level strategy; the overall corporate strategy and, depending on the size of the organisation, the business strategies of the major divisions. It is now common for the board and management team go off-site for a board retreat to discuss the current strategy in detail. If the strategy is working and is well understood by both directors and managers, this stage might involve nothing more than an annual review of progress, discussion of changes in the strategic landscape and a reaffirmation of the core strategies. On the other hand, if current results are poor or if major changes are forecast for the external environment, a far more searching review and re-evaluation of strategy might be required. This may take a longer than one retreat and may require a number of follow-up workshops.
Do your senior managers see board meetings as a chore?
If you asked the senior management team whether they saw value in attending board meetings, what would their response be? All too often, from our experience, senior management teams get treated as though their time is limitless; with all board requests for information receiving high priority regardless of the managers’ capacity to action them. Similarly, senior managers may have to devote considerable time each month not only to attending board meetings, but also compiling papers and/or presentations for the board. And then there are those situations in which board meetings are fraught with dysfunction: the directors are at war with each other or with the CEO and management team—hardly encouraging for the management team.
The board evaluation cycle: How often should you review the board?
A question I am asked regularly is how often a board should be reviewed. For a board that is not obliged to annually assess its performance such as ASX listed companies and APRA regulated entities, the question is a valid one. But even for those organisations where board reviews are mandatory, there are still considerations to be made as to the type and scope of an annual evaluation. Some boards will decide to evaluate their performance on an ‘as needs’ basis, while others will prefer to conduct a major review every two or three years. Many boards conduct an annual or even a semi-annual review. Finally, others will opt to include performance evaluation as a regular agenda item at each board meeting. There are advantages and disadvantages of these different review cycles.
