A Governance Excellence framework will provide the road map to good corporate governance, however without the right culture and leadership, successful implementation will be difficult, if not impossible to achieve.
I would imagine that if we looked further into all the most recent governance failures, (Commonwealth Bank financial planning, Essendon football Club and the outcomes from the Trade Union Royal Commission to name just a few), we would find Mission and Vision Statements, Values and Principles Statements and probably even Codes of Conduct, yet the result was still disastrous for many stakeholders.
Why…? I would suggest because the prevailing culture accepted and even rewarded behaviour that allowed these particular situations to unfold. If the CBA really did have a culture that cared for its customer’s first and personal reward second, then the situation that arose in this business would not have been tolerated.
From governance perspective, boards collectively and board members individually must have a more “enquiring mid”. Evidence rather than verbal reassurance must be sought and failure by management to “buy into” this approach should be viewed with much scepticism. Board members must also be prepared to really understand the business to enable them to ask the right questions. Lack of real knowledge and understanding severely limits a board member’s ability to contribute and lead an organisation.
And finally, if you create a reward system tied to specific outcomes, you had better make sure those outcomes are aligned with your long term goals and consistent with your Mission, Values and Culture.
Good governance is best achieved when culture is aligned with strategy.