You appoint the best candidates for leadership positions, you have a rigorous process for ensuring that these individuals partake in personal development and strive to have the space to breath, innovate and manage. Yet, in recent high profile failings across various sectors, the presence of a high trust culture is often lamented as one of the key causes of these organisational failings.
This is because governance is often seen as the antithesis of a high trust culture - a piece of needless bureaucracy that has been developed to restrict innovation, flair and entrepreneurial thinking. It can certainly seem like this if the governance is badly designed, poorly implemented and seems to work against, rather than with, the objectives of the employees and the organisation itself.
Can you realistically have a high trust system within what is an increasingly regulated and litigious society?
Governance should prevent you from making poor, uninformed decisions or wasting time and effort on repetitive and unproductive discussions with unclear outcomes. It should also operate throughout your organisation and, if necessary, provide evidence to external reviewers of the facts. At its very simplest governance is about clear purpose and agenda, appropriate membership, good chairing skills and clear outcomes. An important part of the evidence jigsaw is the presence of high quality minutes – even if this is just a simple record of any outcomes and actions required. You should not see minutes as a piece of bureaucracy to be glanced over or even ignored, but as an essential part of ensuring that good decisions are taken, organisational issues are reduced and areas of concern are addressed.
Poor governance isn’t limited to lack of minuting or poor usage of the limited notes taken. Often the timing, frequency, membership and focus of these meetings mean that from the outset the design and application of your controls undermines their effectiveness. At RSM we often see a great deal of positive practice and good intent ruined by poor administrative processes or culture. A good indicator of a poorly designed or badly implemented governance system is if employees perceive it as merely box ticking or something that adds little value to the organisation.
Instilling the benefits of good governance across your organisation
The glue that bonds an effective governance system together is the people that operate within it. If acceptance and understanding of good governance isn’t bought into, and owned, by the top of the organisation then it is unlikely that the rest of the organisation will buy into it either.
Trust is also key to ensuring your employees are on board with your governance processes. Therefore you should not design a governance system that assumes the worst in everyone and attempts to catch them out. You should be designing systems of governance that support staff to excel, identifies positive outcomes, ensures that autonomy is rewarded and that your staff are given the space to innovate and manage.
Equally, you also need to identify where poor performance is occurring in order that you can understand why. This should not be an exercise that seeks to identify and blame individuals, but one which becomes the starting point of discussions to understand how you can improve.
If your employees regularly query the purpose of your processes, or an organisational review uncovers an unexpected issue, ask yourself if the design and application of your governance systems are aligned to your organisation’s values and objectives.
To find out how to more effectively instil good governance across your organisation, please contact Matthew Humphrey.