02 Feb Governance: Underpinning working experiences
“Corporate governance may not feature prominently on the doorstep during campaigning at election time, nor often in party manifestos, but it underpins the working experience of most of us.”
Those remarks by Rachel Reeves MP, the Chair of the Commons BEIS committee, preface a thought provoking article on the impact of governance on organisations and their interactions with workers. Highlighting areas such as the gender pay gap, executive remuneration and the treatment of employees the article calls for a bold approach in instilling strong governance practices across business. Along the way it touches on the challenge of working to eliminate exploitative or questionable working practices including some which have been investigated by the committee in recent times.
One comment which particularly struck a chord was that when it comes to working practices, “if good corporate governance was in place, and enforced, then there would be no need for the courts to intervene”. And you could equally say that with good corporate governance so many of the failures seen in recent times may not have happened. As Rachel Reeves MP highlights, “Whilst it is possible for well-run boards to simply make bad decisions, weak governance has been a feature of most recent major corporate failures.”
Maybe part of the perception gap is that when things go well corporate governance is rarely mentioned. We may ascribe success to leadership or culture, we may comment on strong internal and external partnerships or praise the product mix but in those circumstances good governance is something which is more assumed than highlighted.
On the other side of the coin, when corporate failings come to light invariably poor governance is listed as one of the prime culprits. This can lead to an approach which seems to be more geared towards highlighting and stopping poor practices rather than promoting the positives which come from great corporate governance. And let’s face it, if your aim is for engaged employees to deliver customer excellence and in the process build a strong reputation and good investor returns then delivering those ambitions starts with good corporate governance.
Corporate governance isn’t a magic art; it comes from a genuine desire within the executive team to translate the vision and strategy into tangible and positive results. Along the way this encompasses basic leadership skills including people management, risk appraisal and communication. It also requires boards to have a balanced make up and to be prepared to be self-critical, to question and to explore in order to deliver great outcomes. So yes, let’s be bold about corporate governance but let’s do so in a way which accentuates the good rather than uses it as a whipping boy to failure.