What is organisational design and how does it relate to corporate governance?

The concept of organisational design is a simple one. It works to enhance efficiencies and productivity by aligning an organisation’s structure with its objectives. Simple in concept, but perhaps more complex in practice. It requires a Board and senior leadership to have a robust knowledge of all areas of the business, so they can properly assess whether an entity is structured to support its goals. It also means more than merely creating a structure for an organisation, but involves careful consideration of communication channels, responsibilities, accountabilities, knowledge, skills and experience groups and geographical constraints or boundaries, service or product offerings and customer or client requirements.

We are seeing unprecedented change in technology, communication, regulation and industry. And as such the time for organisations to be static is long gone - it is imperative to assess any organisational structure to make sure it is fit for purpose. In this context it quickly becomes clear how this plays a core role in an approach to effective governance. 

Considerations should cover:

  • change management and governance;
  • how might this impact staff – can you legally make the changes that you want to;
  • communications – how are any changes going to be shared; 
  • understanding of the market – what the market is demanding; and 
  • what further changes might be needed in the near future – whether anyone is horizon scanning for issues.  

In the context of corporate governance, organisations need to consider accountability under the organisational design framework. Determining the flow of responsibility and remit empowers the right people to make positive change and subsequently enables any organisation to be much more efficient, but also more effective in meeting their organisational purpose, as well as reducing internal tensions from poor organisational design. 

For more information on tackling organisational design, contact Hannah Gibson Patel