Governance, accountability and transparency are much more than the current buzzwords of Board room discussions. Achieving and maintaining sound governance practices with a fully engaged Board of Directors/Trustees, while holding members and management accountable for achieving an organization’s mission and vision, and implementing a culture of transparency with stakeholders, are critical to an organization’s long-term success. Just ask those who failed one, if not all three, of these goals. It doesn’t take much of a Google search to find examples of organizations run amuck by failed systems of governance and accountability, including some that seemingly closed overnight due to lack of financial resources or ethical failures of senior executives to outright fraud.
As Board members of leading organizations, what questions should you be asking?
- First and foremost – The tough questions.
- Second, those questions that lead to robust dialogue and consideration of the strategic direction of an organization, and the manner in which the strategic priorities will be achieved.
- Finally, thoughtful and reflective questions that challenge management on the information provided. Is the information complete? How do you know? How well informed are you regarding the operating environment and the related risks (financial and otherwise)?
As senior executives of leading organizations, what action should you be taking?
- Embracing and promoting a culture that upholds the highest ethical standards.
- Fully engaging with your Board in setting the strategic direction of the organization, and implementing policies and processes that respond to that direction.
- Implementing and maintaining a culture of transparency.
In the wake of corporate collapses and scandals, there has been a wave of new regulations, rules and compliance requirements imposed upon organizations. Ultimately, the responsibility of the Board isn’t merely to be aware of best practices, but to embrace the responsibilities of expected corporate behavior. Under these principles, organizations can truly thrive.
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