Structure and Governance
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Structure and Governance Development
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Questions for your board?
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? Is the current structure the most effective and efficient to meet business and regulatory needs.
? Do issues fall between cracks or is there duplication
? Is the structure, TOR of Committees and constituency up-to-date and appropriate
? Are Board Committees appropriate and effective
? Are decision making and authorisation levels clear and followed
? Is there the right balance of key business functions represented on the board
? Is the strategy up-to-date, known be all and stress tested
? Are communications to key stakeholders clear and understood
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Structure and Governance
One of the key lessons from the international financial crisis has been the importance of an appropriate structure of governance. Having clear and workable lines of direction, authority and decision making that are followed in practice is essential.
Our work with clients has provided us with experience of common problem areas in structures and we look, amongst other things, for:
- dotted lines, often these indicate a lack of clarity about the role and where it fits into the structure. Sometimes it can reflect a discomfort by the individuals involved rather than clarity about the role
- disparate levels of function reporting to the CEO, sometimes a new venture requiring close focus from the top or a long serving senior person who sees reporting to the CEO as a status symbol
- new or geographically distant offices who seem to be adrift from the main structure; limited number of board committees creating long board meetings where delegation would help
- disparate activities grouped under the same director, often because the structure has been built around the particular mix of skills a director has rather than recruiting to fit the right structure.
How we work to improve governance
Clients normally call for our help when an issue arises that prompts them to seek independent expertise. Examples include:
- the fast growth of a new venture
- a catastrophe that calls their structure into question
- a high proportion of new board members
- a new Non-Executie Director that challenges the effectiveness of the structure
We always create a clear plan of work that sets out what we propose to do in terms of documentation review, interviews, observations and reporting. We normally report to the Chairman or the Senior Independent Director during the term of the assignment.
Our report will identify the gaps between your current practices and the standards in your jurisdiction plus any changes anticipated particularly in today's climate. We also take into account the size and compexity of your business and the culture and historical perspective. The regulators are watching, so take action now!
“Two years ago I said that we would take action against senior management of firms in the interests of ensuring proper attention to governance and controls and holding individuals to account for their own action and inaction. The recent significant fines on senior directors of Northern Rock are examples of this,” Margaret Cole, FSA Enforcement Director, June 2010.
CTP Global supports Global Boards to ensure that they are working at their most effective. To discuss your Board development and support requirements contact us now in confidence...
CTP Global – Good Governance: Great Performance
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