Skip to main content
Loading
Join
Cart
LinkedIn
Facebook
Twitter
Toggle search
Toggle navigation
Keyword Search
Sign In
Share this page
Share on Facebook
Share on Twitter
Share on LinkedIn
Email
More options
select
Bookmarks
Google+
MySpace
Reddit
StumbleUpon
Tumblr
Yammer
Blog posts
Compliance v Performance – where does your board spend most of its time?
By
Mark C. Schultz, FAICD FCPA
on
September 26, 2016
A board of management has 2 primary functions, namely Compliance and Performance. How your organisation performs over the long term can be dependent upon what your priorities and focus are in relation to these 2 obligations.
Both these responsibilities of the board are important for good governance. Compliance because it reviews, monitors and assesses the activities and outcomes generated, against the expectations set by the board. This function also ensures legal and stakeholder requirements are being addressed, thereby protecting the organisation against any adverse events or actions. The focus is generally the past and reviewing what has been done, rather than what should or could be done in the future.
On the other hand, Performance is about the future, it’s about sustainability and the focus is on strategy and creating a business model that can survive in both predictable and turbulent times. It works with “unknowns “and requires detailed analysis and critical thinking. Robust risk management underpins performance management and development and without a board focusing on Performance, an organisation can be left to wander, without a clear direction and common understanding of what will drive and deliver value over the long term.
Both functions are undoubtedly important to good governance. It is beneficial to know where you have been and how you got to where you are today, however this knowledge has little value by itself. Whilst lack of Compliance may cause problems for an organisation, a sole focus on this function will also be problematic. A board must decide how it will allocate its time and resources to ensure both these functions are addressed and be comfortable with its focus – and a good definition of comfortable, in this case, is an organisational business model that meets the challenges of an ever changing external environment and is able to meet stakeholder expectations over the long term. A board need to think about this and make specific decisions about how it will manage these functions.
Mark Schultz
0 replies
Archive
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
December 2015
November 2015
October 2015
September 2015
Private Network - Library Sign In
Hide Private Network - Library Sign In
Username
Forgot?
Password
Forgot?
Forgot username?
|
Forgot password?
Join Our Private Network - it's FREE
{1}
##LOC[OK]##
{1}
##LOC[OK]##
##LOC[Cancel]##
{1}
##LOC[OK]##
##LOC[Cancel]##