This blog is part of our Expert Commentary series, bringing you insights into some of the unspoken challenges women face in the workplace, from experts with lived experience. The series explores a range of topics and perspectives to highlight the ways inclusive and compassionate leadership practices can benefit everyone.
My personal success measure for my role as a non-executive director is that the organisation should be in a better state when I leave than it was when I joined. For that to be true, the organisation needs to be well-governed to mitigate intolerable risks and take advantage of opportunities to increase value.
Good governance is the key to sustaining a successful business that achieves its goals, in the short and long term, while remaining legally compliant and maintaining a positive reputation in the eyes of shareholders, regulators and the community.
The difference between a well-governed organisation and one that needs help in that area, is pretty obvious in my opinion. You can feel it in the culture around the board table and the relationship between board and management. The style of the Chair is also critically important as equal information and an equal voice for all directors is an important feature of a well-functioning board.
Every time that I have sensed that I didn’t have all of the information that I needed to be able to support or challenge a recommendation from management, my instinct proved right. Don’t be afraid to scratch that itch and ask for greater clarity.
Your organisation’s success may depend on your line of questioning. Certainly when things have gone horribly wrong for organisations, there has been shown to be a disconnect between board and management with critical information often not being brought to the board by management or requested of management by the board.
There are a number of factors that collectively contribute to good governance. Well-functioning boards are usually collaborative and consensus-oriented, placing a high level of importance on accountability and transparency.
Well-governed organisations are responsive, effective, efficient and follow the rule of law. They are also equitable, inclusive and diverse.
It’s the impact of diversity, in all its forms, that can often be underestimated. The key to understanding the optimum mix of diverse views is to consider the customer base of your business. What does your addressable market look like and how does that compare with the decision makers in the organisation? Diverse perspectives at the board and senior management level ensure that a broader range of scenarios are considered before taking a course of action in order to maximise a sustainably successful outcome. Diversity requires inclusion to be effective. Without it is like being invited to play a team sport but no one passing you the ball.
An investment in getting the governance of an organisation right will reap rewards.
It will provide the organisation with a clear vision for business growth, ensure the organisation is ready to mitigate any major risk and remain compliant, and improve the reputation of the business.
Governing bodies are responsible for overseeing the strategy that leads to sustainable business growth and that involves creating a clear vision of what the company could be in the future. Determine where the business can win and discover the right opportunities to act on. That will improve performance over time and create a strong narrative for the business that will make it easier to attract investment.
To be risk-ready, get on top of current risks and gain insights about possible future risks. Create strategies for mitigating risk and learn from the experience of others.
A focus on improving compliance should ultimately result in less time and resources spent on compliance because it will be embedded into the culture, systems and processes of the organisation. The starting point is to be clear about your legal responsibilities and regulatory requirements. It is important to understand the lines of defence and accountability at the operational level.
A positive reputation can be achieved through best-practice governance. If you develop a culture of doing the right thing then that tells customers a lot about the business they are engaging with. A positive reputation is critical for business sustainability and delivering increased shareholder value.
About the Author
Marina Go is Chair of the Super Netball Commission, Ovarian Cancer Australia and The Walkley Foundation, and a non-executive director on the boards of Energy Australia, 7-Eleven, Autosports Group, Pro-Pac, Adore Beauty and Booktopia. Marina has been actively progressing equitable outcomes for women and culturally diverse Australians in her working life and as a volunteer for more than three decades.