Deciding on Conformance vs Performance Assessments ...
This section assists you further in helping you determine what Type or Level of Board Performance Review you should engage your Board with.
The Pressure to Perform …
Practically and simply, Directors and their Governing Bodies are engaged in one of the most highly competitive team sports, with a limited set of players, with high expectations and uncompromising stakes, requiring the highest performance levels, in arguably one of the most challenging periods of business history.
If your Governing Body and its Directors wish to win, they need to understand how to perform at the highest levels in this competitive game’s requirements.
This requires improving the Board’s Performance. It requires effort, commitment, and just does not happen by Chance.
We will help your Board improve its Performance through engaging with GRC Consulting’s Corporate Governance Maturity Ladder.
Recapping the Simple Decision Criteria from our Maturity Ladder …
The GRC Consulting Corporate Governance Maturity Ladder concluded two Simple Decision Criteria:
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.
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.
Additional Simple Decision Criteria …
You may also wish to consider assessing your Board to determine what Type or Level of Board Performance Review, “Conformance” or “Performance“, in terms of the “Additional Simple Decision Criteria:, as shown in the model below:
Corporate Governance Framework Criteria ...
Board Maturity and Process Criteria ...
Detailed Criteria ...
Additional Simple Decision Criteria - Corporate Governance Framework …
Whilst the following 4 questions are deliberately positioned at a Summary “Very High Level” to keep this simple, please self-assess them in this sub-model to summarise which Type or Level of Board Performance Review, “Conformance” or “Performance“, may be appropriate for your Board.
Please place an assessment against each question.
A Summary of “No” on balance would indicate a “Conformance” whilst, conversely, a Summary of “Yes” would indicate a “Performance”, subject to a conclusion as to your Board’s capability of demonstrating to an Independent Expert “Mastery” of its Local Corporate Governance framework.
Decision Logic ...
Summary "Very High Level" Question ...
1. Ensuring Independence ...
Have you, as a Board, completed an Annual Directors’ Independence Assessment of all Directors, formulated and implemented an appropriate remedial plan and related actions for all Director submissions?
2. Ensuring Independence ...
Have you, as a Board, undertaken a Directors’ Independence Assessment of all Directors, before any material consideration before the Board, and formulated and taken appropriate managed remedial plan and related action concerning all Director submissions?
3. Reducing Liability ...
Have you, as a Board, undertaken an Annual Directors’ Liability Assessment of all Directors of the Corporate Governance Risks arising from your Regulatory and Mandatory Corporate Governance framework, and formulated and taken appropriate managed remedial plan and related action concerning all Director submissions?
4. Corporate Governance Compliance ...
Have you, as a Board, undertaken an Annual Assessment of the Board’s Regulatory and Mandatory Corporate Governance Compliance, and where appropriate, conducted an independently led assessment by a professional Service Provider, and formulated and taken an appropriate managed remedial plan and related action concerning all Board and respective Director shortfalls arising?
Additional Simple Decision Criteria - Board Maturity …
For Board Maturity, we provide you with Two Internationally acclaimed Subject Matter Experts and their simple models to assess the maturity of Boards, to which we have added a current view, as formulated and utilised by GRC Consulting.
The Two acclaimed Subject Matter Experts are: Mr. Ram Charan (2005), and Mr. Geoffrey Kiel (2018).
Whilst the following questions are deliberately positioned at a Summary “Very High Level” to keep this simple, please self-assess them in each sub-model to “Select” which Type or Level of Board Performance Review, “Conformance” or “Performance“, may be appropriate for your Board.
Select only One Level in each of the three following models.
A Summary of “No” on balance would indicate a “Conformance” whilst, conversely, a Summary of “Yes” would indicate a “Performance”, subject to a conclusion as to your Board’s capability of demonstrating “Mastery” of its Local Corporate Governance framework.
Please note that we provide a combined view of these three models to assist you in placing your assessment of whether this indicates “Conformance” or “Performance”.
Additional Simple Decision Criteria - Board Maturity - Ram Charan (2005) …
Decision Logic ...
Summary "Very High Level" Question ...
1. Ceremonial ...
Where the Boards primarily performed a compliance role; Director appointments were prestigious with little communication between them or with the CEO and executive team, let alone wider; Fulfilled their explicit obligations, attending required meetings and “rubber stamping” management’s resolutions; largely anonymous to the public, rarely publicly reported, and little risk or personal threat.
2. Liberated ...
Mid-1990s and Post Sarbanes-Oxley; Boards expected to actively contribute; Directorship mandate expects active participation, contribution, and mindset; Positions including that of the Chair under pressure and voting for replacement; wide Board and governance reforms, with significant corporate scandals; Governance practices impacting share and corporate pricing; Activist calls being heard and Directors and CEOs pushing change, sometimes in an uncoordinated way destroying value, being ineffective, lacking focus; tenures become limited, particularly CEO’s.
3. Progressive ...
Meticulous legal compliance and in spirit; Team player uniformity, adding value whilst being unique and independent; Active contribution, dialogue, and focus on key issues to reach consensus and closure, eliminating the irrelevant; Individual challenge whilst maintaining Board harmony and without the CEO which energises Directors and provides stimulus and growth, individually and as a Board; Constructive working relationship between Board and CEO, with a confrontation of the thorny issues; Effective leadership at Board level, through working groups’ appointment of SID’s/Corporate Secretary, collating opinions to consensus of Board views constructively communicated with follow-up, collaboration and sincere implementation; adding value paramount and on many levels; Diversity of perspective and thinking, free flowing contributions with added value through their judgements on and suggestions for the CEO and his direct reports; Boards becoming a competitive advantage in and of themselves.
Additional Simple Decision Criteria - Board Maturity - Geoffrey Kiel (2018) …
Decision Logic ...
Summary "Very High Level" Question ...
1. Formative ...
Where development generally, in particular, governance is not formed or poorly evident and functioning.
2. Developing ...
Initial governance is evident, including measurement and improvement processes.
3. Acceptable ...
Minimum level of adequate governance is evident and functioning.
4. Advanced ...
Governance practices are evident that exceed minimum acceptable levels.
5. Leading Practice ...
Independent consensus of governance frameworks performing at best practice levels.
Additional Simple Decision Criteria - Board Maturity - GRC Consulting (Current) …
Decision Logic ...
Summary "Very High Level" Question ...
“The Effectiveness of the Board’s Performance, seen by an independent Observer and adjudged as”: ...
1. Poorly ...
Being “Poorly effective/supportive” – as a consequence, not effective and does not deliver the desired results.
2. Haphazardly ...
Being “Haphazardly effective/supportive” – as a consequence, giving rise to unpredictable effectiveness and delivery of desired results.
3. Somewhat ...
Being “Somewhat effective/supportive” – as a consequence, somewhat effective or marginal in delivering desired results.
4. Averagely ...
Being “Averagely effective/supportive” – as a consequence, averagely effective in delivering desired results.
5. Structured ...
Being “Structured effective/supportive” – as a consequence, demonstrating acknowledged effectiveness in the delivery of desired results.
6. Well Structured ...
Being “Well Structured effective/supporting” – as a consequence, activities are embedded with proactive effectiveness in delivering desired results.
Why are we Showing these Various Guidance Decision Making Frameworks? …
The obvious reason, as professional experts, is to assist you in understanding and making the appropriate decision on whether your Board is more suited to either a “Conformance” or “Performance” Board Performance Review.
From our experience, Governing Bodies, whilst they have an opinion, are often unable to show or conclusively demonstrate, to the independent observer, whether they are best suited to adopt either a “Conformance Oriented” or a “Performance Oriented” approach to their Board Performance Reviews, or that they have arrived at their position through a structured framework of consideration – therefore factually support their approach.
Furthermore, from our experience, Governing Bodies are also often unable to clearly lay out their Corporate Governance Frameworks and substantiate the necessary substance to each component.
In short, being unable to do so means they are unable to effectively plan, and they will never be in a position to aspire to ISO 37000 – Governance for Organisations and its related ISO 37004 – Governance Maturity Model.
By undertaking Corporate Governance Board Performance Assessments in a Structured way, building the necessary foundations with this end goal in sight, Boards can plan properly to achieve the Outcomes that Matter as they progress up the Corporate Governance Maturity Ladder. GRC Consulting will help your Board get there.
We are now able to reflect these two approaches, “Conformance” and “Performance”, in a simple graphic 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.
Time to Bring it all together - "Conformance" vs "Performance" Summary …
Please place your ratings of your Board across the three Maturity Models covered above into the graphic below.
We hope that the results assist you in understanding your Board’s likely position on the GRC Consulting Corporate Governance Maturity Ladder and whether you should request a “Conformance” or “Performance” Board Performance Review.
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.
If you would like to complete this Exercise and have a "Board Paper" for your Board …
The GRC Consulting Report will provide you, Free of Charge, with a “Board Paper” for your Board.
Ideally your should have as many of your Board Colleagues complete this as possible.
This not only brings it foremost in all Directors’ minds and adds greater value and understanding, but is then of greater value to your Board.
Complete the Form below.
Where you are able to gather multiple Board Directors, have them complete the Form as well.
Simply advise us of the names through our email contact at info@grcconsultingltd.com.
Also, advise us in this email whether you wish to have both the combined average together with individual Directors’ submissions, or simply the combined average, or any other request.
We will return the completed “BoardPaper” on this basis.
Contacting us to Provide your Free "Board Paper" ...
Please click the “Complete Form” button opposite for your Free “Board Paper”.
Please complete all the Steps and click on the “Submit” button at the end of the Form. Thank you. We will revert with your “Board Paper”.