Conformance Oriented - Board Performance Reviews ...
The Critical Questions for Governing Bodies to Answer are twofold:
1. How “good” is your Governing Body on the Performance Spectrum?
2. Has your Governing Body demonstrably improved its Performance each year?
GRC Consulting provides a world-class market-leading solution for Governing Bodies that are Performance Driven and Oriented – Independent Board Performance Reviews.
As all Governing Bodies are different, and to make a properly considered decision, one has to consider the Governing Bodies within an appropriate framework and determine within a myriad of factors to ensure it is adopting the correct approach to its Board Performance Review and, therefore, positioning the Governing Body appropriately for a Board Performance Review that adds the most value.
We reflect these two approaches available to the Governing Body graphically as follows:
Reality Check …
This is a sensible check to put egos and aspirations aside and take a good hard reality check regarding the Governing Body’s Competence and Performance.
Not every Governing Body is a Top-Level Performer. This is not about downgrading the view of the Governing Body, its Competence and its Performance. The issue is to ensure that we adopt the correct approach in applying the proper Board Performance Review focus, such that we maximise the outcome for the Governing Body to drive Continual Annual Performance.
No world-class team gets to its leadership position without hard work and repetitive focused training.
Board Performance Reviews are a mechanism for the Governing Body to improve Performance.
GRC Consulting understands this implicitly and can help you select the correct approach and realise Governing Body Performance Improvements through our approach and world-class methodologies.
As we are constantly reminded, “one has to be able to walk before running,” and in the case of Board Performance Reviews, “its horses for courses” or, more succinctly, it is crucial to ensure that we understand the Board’s proper positioning and apply the correct Board Performance Review approach according.
Conformance Oriented Board Performance Reviews …
In considering a “Conformance” positioning, the Governing Body should be able to clearly show that from a Maturity perspective that it demonstrates the characteristics of being:
- Ceremonial to Liberated
- Formative to Developing to Acceptable
That the Effectiveness of the Board’s Performance, seen by an independent Observer and adjudged as:
- Poorly to Haphazardly to Somewhat
They would tend to focus on
- “Conformance”,
- be all about compliance,
- with that focus centered around compliance with their respective Corporate Governance framework.
This would therefore find that the Governing Body’s focus, driven by their respective Corporate Governance framework, to be centered around:
1. Corporate Governance – developing and attaining compliance with the framework’s various sections and individual requirements.
Note: Leading Corporate Governance frameworks require, in addition to conducting Board Performance Reviews, that the Governing Body has developed and implemented a broad-ranging scope of oversight, compliance and related requirements of the Board and its Directors to implement and achieve by way of structures, processes, controls, and other operational aspects, a comprehensive and effective governance framework.
2. Director Liability – endeavouring to ensure that their Directors understand the scope of their personal Director-oriented risk/personal liabilities arising from both the law and the Corporate Governance framework’s various sections and their individual obligations.
Note: Leading Corporate Governance frameworks, by their very nature, give rise to a range of personal liability risks for the individual account and responsibility of every Director. This is not to be confused with Board risk or organisational risk of various forms – this is personal and for every Director to ensure compliance and should be assessed at a minimum annually.
3. Director Independence – endeavouring to ensure that their Directors are and are seen to be independent in their positions on the Board, personally and in the conduct of business.
Note: Leading Corporate Governance frameworks, by their very nature, require an annual Independence Confirmation from all Directors to ensure that there are no relationships or circumstances that affect or may affect either a Director’s independence or, collectively, that of the Board. Best Practice further dictates that each Board should actively consider in advance the nature of the matters to come before it and where these would be “judged by the normal person” to be material to the business of the Board/organisation’s interest, then a separate position of independence should be sought of all Directors for the Board collectively. Further, this may require to be sought both specifically and generally, depending on the circumstance.
From the above, we are therefore able to conclude that following a “Conformance Oriented” positioning for a Governing Body, that a Board Performance Review should consider, among other matters, addressing the following three elements within the scope of its work:
- Corporate Governance Assessment
- Director Liability Assessment
- Director Independence Assessment
to meet the minimum “threshold level” being driven by leading Corporate Governance frameworks.
Further References and Reading ...
While both the Director’s Liability and Directors Independence Reviews are both somewhat explanatory, relatively simpler to understand, and driven by the specifics of the respective Corporate Governance framework, to assist in the understanding of the Governing body’s positing for a Board Performance Review, notwithstanding that all three are generally mandatory requirements of the Corporate Governance framework or related regulatory authority, and that if this “Conformance Oriented” approach is the correct approach for your Governing Body, then please read the detail around our “Conformance Oriented” Service, currently structured to meet the specific Corporate Governance requirements of the two Regulatory Authorities, SAMA and CMA, of Saudi Arabia:
Corporate Governance Assessments – KSA – SAMA-CMA
– To read further on this Service, please click the “Read More” button.
Director Liability Assessments – KSA – SAMA-CMA
– To read further on this Service, please click the “Read More” button.
Director Independence Assessments – KSA – SAMA-CMA
– To read further on this Service, please click the “Read More” button.
If you feel that your Governing Body would benefit from a structured GRC Consulting online Assessment to confirm the Governing Body’s correct positioning as to its “Performance Oriented” versus “Conformance Oriented” approach, then please read further on our Service, applicable for any International Governing Body:
Decision Support – Performance vs Conformance Assessments – To read further, please click the “Read More” button.