Sunday, December 28, 2008

Psst. Goverance means responsibility.

As a career strategic planner, professional communicator, writer, reporter, policy analyst, and now enterprise risk manager, I have been able to work with some of the best boards and executive managers as they strive to see into the future, understand impacts and the highly improbable, and set a course for the future. I have worked with and been a part of management teams who summon their best and brightest minds, and set sail for the horizon. They mark their future with milestones: "By 2010, our profitability will be X. Our employee engagement will be Y. Our workforce will look like this. And our community will see us that way."

In the midst of all this chart setting, ship sailing and target marking, I fear we have lost sight of the reason that we actually do all this. We are too fixated on the targets, our actions are too tactical, and we are rewarded for taking small steps, instead of forging new paths and creating new futures to explore.

I question as to whether this is by choice, because of the consequences of forging into the new and unknown, or are we actually stunted by a fragmented view of the future. I wonder, if we gave all the leaders in the world a paint brush what kind of picture would we paint, and what would the canvas look like in the end?

Cutting to the chase, it does not matter whether the organization sells shoes, builds cars, or cures cancer, there are universal and common goals: to create value for people and society, to create a legacy for the future, and finally to demonstrate responsible governance. These goals speak to the greater reason that organizations exist, transcending market relevance, competition and political agendas. These goals should be on the mind of every leader, and they should be modeled as if they are part of the leader's DNA, keeping at bay wild cards like free will, and personal and political ideologies.

From my vantage point as a facilitator and an observer of leadership, as well as a practitioner in governance and accountability systems, I believe that instead of painting a canvas for good governance to occur, we are too focused on the colors and the style, not the substance.

The canvas to which I am referring is the one that paints the picture of what a well governed, responsible organization looks like, acts like, walks like and talks like. Governance is the full responsibility of the corporate stewards - those being the Board of Directors, CEO, the top executive managers and their direct reports, most commonly referred to as senior managers.

The roles and accountability's of each of these people must be clearly defined, as well as the standards to which they will be held. For without these clear standards, accountability weakens, and the governance house of cards falls down, bringing down the reputation of the entity, and in fact impacting the trust that we all place in our leaders.

According to the OECD, (Organisation for Economic Co-operation and Development - http://en.wikipedia.org/wiki/OECD#Objectives) the term “corporate responsibility” refers to the actions taken by businesses in response to such expectations in order to enhance the mutually dependent relationship between business and societies.

This is a a lofty ideal and a vision that should be shared by every organization in the world, large or small. So, what are we looking at this is so distracting?

According to Nassim Nicholas Taleb, author of "The Black Swan", we are seeing the details and not the picture that is before us. He says that as humans, we are hardwired to learn specifics when we should be focused on generalities. His view is that we restrict our thinking to the irrelevant and the inconsequential, while larger events continue to surprise us and shape our world: 9-11, the success of Google, and Enron to name only three.

According to the Conference Board of Canada, Corporate Social Responsibility (CSR) is fast becoming an important factor in exercising good and responsible governance. CSR is essentally defined as the stakeholder's voices. It is the mechanism through which we balance the economic and social interests of the business and society. Stakeholder buy in is essential to the success and acceptance of business as it is the social conscience of our actions, and assures that we create value for society, leave a legacy for the future, and demonstrate effective and responsible governance.

CSR is a relative new comer to the governance and responsibility scenario, but it the proof of its importance is in the news papers and in our own experiences. We can all point to examples where organizations that were once giants have failed, or are now flailing, because they lost their ability to make good decisions, act responsibility, and create stakeholder / community engagement and buy in.

Great visions require action and supporting systems and frameworks to guide the process. In order for organizations and leaders to see the picture, assure responsiblity and good governance, it is imperative to integrate the core governance functions that are the within the purvue of the board's responsibilities: strategic planning and performance management, enterprise risk management, corporate and stakeholder communications and corporate social responsibilty.

By integrating these aspects, we give voice to the communities and various stakeholders, generate edge of the seat intelligence that will help boards to see past the haze of the tactics to find the picture that is emerging, and to set directions to meet the needs of both business and society.

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