Thoughts on governance
Good governance is all about ensuring the right people are in the right place at the right time with the right information and asking the right questions to make the best possible decisions.
I think this is a good rule of thumb to use in thinking about how your governance procedures are performing and what you can do to improve them.
Right people:
- Do the people making the decisions have the right expertise?
- Is there a diversity of perspectives to prevent groupthink?
- Are they able and confident to ask the right questions?
- Do you have a suitable number of people – not too many, but not too few – for the really big decisions?
Right place: the room (actual or virtual) is important because it can make a real difference in how decisions are made. The foundations should be in place to ensure meetings are productive or that information flows work well and support doing the right thing.
Right time: You need to make sure discussions to formulate, refine, recommend or approve decisions are held at the best point in time. Too late in the decision-making process, and there will be a reluctance to turn down poor proposals because of the time and effort already incurred. Too early, and the risk is that proposals are not fully developed and risks are not properly assessed, letting through impractical ideas or resulting in you having to come back to the same decision, again and again, to get it right.
You also need to make sure there is sufficient time to consider a proposal properly, both in the time available in meetings you may have to discuss it, but also in the time provided to decision-proposers and decision-makers to evaluate and respond. While deadlines are helpful in making sure decisions are made when they need to be, they need to be set so people have sufficient time to think.
Just as importantly, time needs to be valued. Are you using people’s time effectively, making sure that decisions are being made or approved at the right level so that they have enough time for the most important decisions? Use the 80:20 rule to focus on the 20% of decisions with the most impact, and minimise the time spent on the 80% that aren’t so critical.
Right information: Good governance lives or dies by the quality of information that forms the basis on which you make decisions. The information must be of high quality and transparent, setting out pros and cons, and – most importantly – be understandable and focused.
Right questions: I think asking the right questions is the most important element of any governance framework. Do decision-makers really understand what is going on? What is important to know? Who should I be talking with to get the answers? If you don’t ask the right questions, you are not going to get the right answers, or you might be satisfied with superficial information that doesn’t tell you what you really need to know. Ask questions that establish the facts, enable you to challenge and scrutinise, identify risks, prompt a thorough discussion, and aid and assure decision making.
Most importantly, you need to foster a culture where it is okay to ask questions, sometimes even the seemingly stupid ones. You may not have thought of the right question, but someone else may have if only they felt confident enough to ask it.
Making the best decisions you possibly can involves rigorously evaluating what you have done so that you can do better in the future. Are you continually appraising the decisions you have made, not only to learn from mistakes but also to learn from successes? Are you getting the right answers from the process that is your system of governance?
This is where the quality of oversight comes into its own. Are your formal structures playing their full role in challenging management to be the best you can be, both at the top level and also down through the organisation?
Continuous improvement is key, as processes are never perfect. Are you actively seeking to improve the quality of the decision-making? If key meetings are rushed, curtailing the opportunity for proper discussion of the merits of important decisions, can they be extended or less important items moved to a different forum?
Making sure you have a code of governance in place is important, but it isn’t enough on its own.
Trustee boards need to live and breathe governance for it to be effective. Otherwise, your code will be just another document gathering electronic dust in the far reaches of your website. Enough to tick a box to say you have one, but not nearly enough to help you steer clear of avoidable disasters.