Conformance Oriented - Board Performance Reviews ...
This section explains “Conformance” Board Performance Reviews and provides links to related information.
In summary, our “Conformance” Service Offering covers:
Any International Board – “Conformance” Board Performance Review …
Boards within The Kingdom of Saudi Arabia – “Conformance” Board Performance Review …
We reflect the “Conformance” and “Performance” approaches graphically as follows:
"Conformance" - the Focus ...
As a generalisation, “Conformance” oriented Boards may be focused on:
- All about Compliance.
- Inward focus, trying to develop.
- Single dimension focus.
- Focused on its Corporate Governance Framework (Governance Compliance + Director Personal Risk + Director Independence).
"Performance" - the Focus ...
As a generalisation, “Performance” oriented Boards may be focused on:
- All about Competence.
- Outward focus, being the best.
- Multi-dimensional focus.
- Focused on its Competency / Performance Framework.
Conformance Oriented - An Overview ...
In considering a “Conformance” positioning, the Governing Body should demonstrate that, from a Maturity perspective, it displays the characteristics of being:
- Ceremonial to Liberated (Ram Charan (2005)).
- Formative to Developing to Acceptable (Geoffrey Kiel (2018)).
That the Effectiveness of the Board’s Performance, seen by an independent Observer and adjudged as:
- Poorly to Haphazardly to Somewhat (GRC Consulting (Current)).
They would tend to focus on
- “Conformance”,
- be all about compliance,
- with that focus centered around compliance with their respective Corporate Governance framework.
- Be “Single Dimension” in focus.
Conformance Oriented Board Performance Reviews …
This would therefore find that the Governing Body’s focus, driven by their respective Corporate Governance framework, is 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 Local Corporate Governance frameworks.
Recapping the Simple Decision Criteria from our Maturity Ladder …
GRC Consulting's Corporate Governance Maturity Ladder ...
Simple Decision Criteria ...
1. No Board Performance Assessment yet undertaken, and or NOT yet mastered the Local Corporate Governance Code = Undertake a “Conformance” Board Performance Assessment.
2. Mastery of the Local Corporate Governance Code = Undertake a “Performance” Board Performance Assessment.
Sumarising - Selecting a "Conformance" Approach to Board Performance Reviews …
In selecting this approach, you have arrived at the determination of either:
“No” Response:
- Your Board has NOT completed a Board Performance Review.
- May not have completed an Annual Directors’Independence Assessment.
- May not have completed a Directors’ Independence Assessment – Material Decisions.
- May not have completed an Annual Directors’ Liability Assessment.
“Yes” Response – Your Board has completed a Board Performance Review but opts to select a “Conformance” Selection:
Your Board has completed a Board Performance Review, but is not yet sufficiently comfortable with its level of regulatory compliance to be satisfied that it is in material compliance and therefore in a position to move on to focusing on continual “Performance” and, therefore, pragmatically, to adopt a “Conformance” approach to its Board Performance Review.
Consequently, your Board would be characterised as:
All about Conformance, Compliance, with an inward focus, trying to develop its Governance Practices and Processes, with a focus on implementing and perfecting its Regulatory and mandatory Corporate Governance framework, aspiring to undertake a satisfactory Board Performance Review that would elevate the Board from a “Conformance” approach to a “Performance” approach, ensuring that it also undertakes Annual Director Liability and Independence Assessments to complement its governance compliance and Board Best Practices achievements, which for any International and or SAMA/CMA Regulated Board’s is driven as a minimum requirement by the respective Corporate Governance Regulatory Frameworks.
Further References and Reading ...
If this “Conformance Oriented” approach is the correct approach for your Governing Body, but you would like to read more detail, then please read the detailed explanatory section about our “Conformance Oriented” Service, which applies to any International Governing Body:
Conformance Service – Detailed Explanation – To read further, please click the “Read More” button.
GRC Consulting recommends that those Governing Bodies and their Directors who are at and have no concern as to the level of their Governing Body and or individual Director’s Regulatory Corporate Governance Compliance, as a process of maturity development and compliance positioning, they incorporate into their Board Performance Reviews, a program that is more appropriately focused upon addressing their respective Regulatory Corporate Governance positioning first. Please read further on our “Performance Oriented” approach:
Performance Oriented – Board Performance Reviews – To read further, please click the “Read More” button.
Your Next Step:
If you are serious about improving your Corporate Governance Performance, in keeping with our “Principles – Board Performance Reviews” and to work towards a contractual engagement, please provide the preliminary information structured on our form opposite by clicking the “Complete” button. We will review and revert to you.