Imagine if every time you received a text message you had to draft a response in writing, send it in a letter to your big brother who lives on the other side of the world and then await the response before you could send the text? Seems absurd. We would not allow such superfluous and excessive rules in our day to day lives, yet in a plethora of traditional businesses, the processes to make simple decisions are held back by formalities that we can unanimously say are obsolete. If we could free ourselves from such confining conventions, we unlock the ability to streamline our processes and run much faster.
So why, when progressing as an organisation, do we forget to reshape our corporate governance framework in tandem? There is no doubt that governance is important, but the reasoning behind the importance often gets lost in time. When governance is so engrained and rigid, not only employees, but even management begin to stop questioning why they follow such redundant operations.
Refresh your corporate governance: revitalise your entire organisation.
By definition, corporate governance is the system in place, including rules, laws, institutions, processes, rights and procedures, which fuel decision-making.
Just, transparent, effective – INTERACTIVE.
The rules have to be recorded somewhere – but there is no point in having a set of rules for the sake of it. They must be thought out. Each item in the framework must be realistic and have structures which provide space for the item to be exercised. They must be all-encompassing and most importantly, known and understood by the whole organisation. That is to say that the whole organisation must understand the purpose of such governance, not just be able to recite it.
You must be able to actively interact with the governance framework – otherwise it is nothing but words in a document. The organisation and its people must give life and shape to your governance framework.
Who has the power?
Break down bottle-necking in your organisation. Work that becomes congested may be a result of a range of different bottlenecks. Perhaps the bottleneck is a higher power or someone in the organisation with too many responsibilities. Perhaps there is one single authority that must approve an overwhelming amount of work before it can be finalised. When processes are held back by an authoritative figure in the organisation, it is time to delegate and reshape roles and authorities. In other instances, work can become congested by redundant bureaucratic governance, which adds time and unnecessary work to a process which would otherwise be simple.
Automating your governance where possible is an effective way to streamline processes. Technology can eliminate needs for auditing and cross-checking as it removes human error. However, understanding the software thoroughly is imperative. The right software will reduce processes – not add them. Rigid technology that limits your abilities or weakens governance is not the right choice. Every organisation is unique, so not all software will be suitable to all your needs. Reshape your system of processes when implementing technology.
Keep your eye out for blockchain technological advancements, which further the ability to exercise rules which are defined in code. Blockchain can enforce governance by the way of smart contract codes, which stores and executes rules that might be designed to facilitate trade or make decisions.
So what is the process each member of your organisation carries out when they make simple decisions?
Corporate governance goes beyond the labels of relationships within a company. Regardless of the structures in place, whether they are hierarchical or even those which aim to achieve more of a level playing field; governance must be consistently monitored and revived.
Stay tuned for our next article which goes through how to make smarter decisions.