Board Excellence
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Guidelines that Impact many Companies and act as guidance for other market sectors The Board Evaluation became a suggested requirement with the Walker Review (Nov.2009). The recommendations have been adopted by the FRC in the new UK Corporate Governance Code which is applicable to premium listed organisations (Premium Listing) on the “comply of explain” basis June 2010 saw the FRC publish The UK Stewardship Code The FRC issued in March 2011 their Guidance on Board Effectivenss
Guidelines & Regulations are in existence in many other market sectors For example, the Housing Sector, the NHS, Investment Companies, Legal, Financial Services, Charities etc and these are overlaid by cross industry requirements, for example - sustainability, CSR, data protection, diversity and equality, immigration, employment, IT security etc In addition market is impacted by new regulations regularly of which the Bribery Act 2010 which came into force in July 2011 is far reaching. New guidance and a quick start guide has been welcomed.
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EXCELLENCE IS A JOURNEY TOWARDS A GOAL
For organisations to stay sharp, displaying full transparency towards stakeholders and the general public, best practice militates in favour of Board Evaluations even when there is no regulatory requirement to undertake them. A reluctant business owner now feels differently – please view our case study
The UK Corporate Governance Code states that the underlying principles of good governance are:-
“accountability, transparency, objectivity & focus on the sustainable success of an entity over the longer term”
Board Excellence should be viewed in the same way we view preparing to compete in a sport. In sport we understand the role of the Manager, the Coach, the players and the team. We know we need to learn, to practice, to work together, to understand the competition and improve continually to have any hope in winning.
If management can embrace this understanding, which should be easier in times where the Olympics is part of our daily lives, business will benefit tremendously. Have a coach, or external input is allowing input from others with different experiences to complement your own and to internalise where appropriate.
We want our children to achieve, we want the best for them, we need business to be continually improving to provide that better place where our children can excel yet further than us.
To improve and grow, new blood needs to be injected, this can be done by a degree of change (not too much too often) of directors on the board and can also be achieved with varying degrees of external facilitation exercises from one year to another. This could be in various forms of leadership, change management, personal development and other board development options, the board evaluation probably being the most direct and specific for the purpose.
Frequency of evaluations
Most guidance indicates that a form of Board Evaluation should be carried out annually. We support that as we can see in cases where we have carried out the evaluations in consecutive years how different issues are at the forefront from one year to another.
In some market sectors (FTSE350 for example) there are requirements that the evaluation should be externally facilitated at least once in every three years.
At a debate held at the IoD in June 2010 at the launch of the The Director’s Handbook the panel agreed that Best Practice would include an external evaluation for other businesses, particular financial services organisations. The panel led by Dr Roger Barker, head of Policy and Governance at the IoD confirmed that there is tremendous value in the external evaluation provided it is handled correctly. One of the panelists confirmed their company has an external evaluation every 2 years due to the value it provides.
The Code states the requirement of transparency, notification in the annual accounts of the process followed, actions defined as a result of the exercise and disclosure of any connections between external consultants and the company.
Further information
Please view additional pages on Board Evaluation either via the drop down menus above on the Board Evaluation tab or click on links below:
Who should carry out a Board Evaluation?
Do do or not to do a Board Evaluation?
Evaluate your approach to a Board Evaluation
Progressive Approach to evolving Board Governance
Find out more…
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Email us on boardevaluations@geniusmethods.com requesting access to the trial copy
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Quis custodiet ipsos custodes?*
(From ‘The Satires of Juvenal’)
‘Who will guard the guards themselves?’; also sometimes translated as ‘Who watches the watchmen?’
A succinct encapsulation of the true spirit of corporate governance.