How can you set up your governance systems to achieve results? Reply

mark-johnson-imageGuest blogger: Mark Johnson is a solicitor and company secretary helping charities, social enterprises and SME businesses to flourish. His company Elderflower Legal offers a range of support packages to help organisations with legal compliance, managing risk and good governance. 

Corporate governance has received increased attention in recent years as a result of high-profile scandals involving abuse of corporate power and, in some cases, unlawful activity by corporate officers. Governance is all about the way the organisations are directed, controlled and held accountable to deliver their purpose over the long-term. The organisation’s practices and procedures should be organised so that the organisation achieves its mission and goals, whilst complying with the law and sound ethical practice.

Putting in place a well-defined and enforced governance structure can provide a structure which works for the benefit of everyone concerned, by ensuring that your organisation adheres to accepted ethical standards and best practices, as well as formal laws. However, it is important that the systems are proportionate to the size of the organisation and the risks it faces. We set out below our ten top tips for effective governance.

Positive benefits of good governance include:

  • People will trust your organisation (including members, service users, funders, suppliers and the public), leading to improved trading terms
  • The organisation will know where it is going
  • The board will be fully connected with members and wider stakeholders
  • Good and timely decisions will be made
  • The Board will be better able to identify and manage risks
  • The organisation will have greater resilience to cope with problems
  • The organisation should enjoy improved financial stability

In our experience, there are common areas that often cause difficulties for organisations. Here are our ten top tips for effective governance.

  1. Mistakes at the start

When setting up a new organisation it is important to have a clear shared view of the vision and mission for the organisation. It is important to plan ahead and bring your supporters with you. Think carefully about your strategy from the start and articulate the vision continually to all your stakeholders. (A stakeholder is any individual or group who depends on the organisation to fulfil their needs and on whom the organisation depends).

  1. Choose the right legal format and corporate structure

Think about what you want your organisation to achieve and choose the right format. Take professional advice and learn from what others have done. Don’t let the tail wag the dog. When selecting a legal format, form should follow function, structure follows strategy. First decide what you want to do, then choose the right structure which facilitates this. Don’t rush into setting up one particular format without understanding what the choices and implications are. It can be expensive to unravel the wrong choice. Professional advice is a sound investment.

  1. Clarity of roles

There may be many roles in a complex organisation. It is important to have clarity about the responsibilities of the Board, individual directors, officers and managers. Write down the key responsibilities and draw up a structure chart and scheme of delegation so that everyone knows who is responsible for what and who has the authority to take decisions. Role descriptions should be easy to understand and new joiners to the organisation should be offered an induction. Roles and responsibilities should be reviewed annually, perhaps as part of an individual appraisal.

  1. Poor Board performance

Board members may fail to perform effectively unless they have the right training and skills and a proper understanding of what their role is (in a documented role description). This can have a knock-on effect on the rest of the organisation, if it is not tackled effectively. There should be regular skills audits of the Board to ensure they are performing well. Group training session can be run to remind the Board of their role and continually improve their skills. A regular formal review of the Board’s effectiveness facilitated by an independent observer can be a useful tool for improvement

  1. Recruitment and succession planning

You need to attract good people onto your board with a wide range of skills. If you have skills gaps and vacancies this can lead to ineffective performance or lack of scrutiny. Cast the net wide in looking for new and diverse talent and plan ahead to refresh the Board at regular intervals. Proper training and induction should be provided to would-be recruits to the Board. Allow them to attend a few meetings as an observer before taking the plunge.

  1. Ineffective meetings

Regular meetings to enable a proper exchange of views are very important to good governance. In a fast world, where digital communication is becoming the norm, some of the nuances of physical meetings, body language and interaction can be lost. Meetings need to be properly run, with a clear agenda and board papers circulated in advance, at regular times and accessible venues. Attendees should not leave feeling unclear about what has been decided; concise minutes should be prepared and circulated promptly after the meeting. The Chair plays a vital role in running effective meetings, supported by a good company secretary.

  1. Dominant founders

Sometimes the original founder of the organisation, a long-serving Chief Executive or Chair may have undue power or influence. Sometimes they may take on too much responsibility and spread themselves too thin. It is important to document the roles and responsibilities of key officers, including the limits on any delegated authority to make decisions (e.g. financial limits on payments, requirements for second signature etc). It is a good idea to write into the constitution a requirement for certain appointments to be refreshed every few years.

  1. Mission drift

If an organisation starts to drift away from its core mission or principles, this can cause a sense of confusion and disengagement for board members, employees, members and customers. There could be a variety of reasons for this. Funding streams or contracts may encourage managers to move into new areas of activity. It is important for the Board to continually review whether the organisation is still fulfilling the objectives written into its constitution. The constitution may need to be reviewed and refreshed to cater for change and this will usually require the members to vote in favour of the change.

  1. Engagement with members and stakeholders

Members and stakeholders need to feel that their voice counts and need to be kept regularly informed about the organisation’s activities. The board must be accountable to and represent the interests of the membership and service users effectively, otherwise a division can arise. This relies on transparent rules and reporting lines, as well as effective regular communication by the Board to keep all stakeholders informed. Members’ meetings should be appealing and easy to attend – think about possible incentives to get people to attend. Cadburys used to give away free chocolate to shareholders who attended its AGM!

  1. Deal with conflict swiftly and decisively

Conflicts occur in most organisations from time to time. Unfortunately, disagreements can quickly escalate and cause rifts within the organisation as positions become entrenched. Conflicts are not always a bad thing- they can help to bring issues to the fore and lead to better debate. The Board, usually through the Chair, needs to deal with conflicts diplomatically, mediating between the different parties to achieve a positive outcome.

This blog was originally published by Elderflower Legal. Read the original article.

Caring for an Ageing Population: Problem or Opportunity for Organisational Life? Reply

Photo of Dr Leah Tomkins
Guest blogger: Dr Leah Tomkins, Senior Lecturer in Organisation Studies at The Open University Business School.

In the West, we are all living longer. Indeed, the fact that our retirement ages keep getting pushed back suggests that we are expected to have many more years of productive life than was the case in previous generations. Whilst this is undoubtedly a triumph in terms of advances in medicine, nutrition and lifestyle, at the same time, it has thrown up a huge challenge for families, communities and institutions who have to work out how to care for elderly people for much longer periods of time than ever before. In particular, it has created a generation of ‘working carers’ who balance caring for an elderly relative with trying to build and sustain a career themselves.

Facts about carers – from the campaigning group Carers UK

  • 1 in 8 adults (around 6.5 million people) is a carer.
  • By 2037, it’s anticipated that the number of carers will increase to 9 million.
  • Every day another 6,000 people take on a caring responsibility – that equals over 2 million people each year.
  • 58% of carers are women and 42% are men.
  • Carers save the economy £132 billion per year, an average of £19,336 per carer.

Working carers

  • Over 3 million people juggle care with work.
  • As of 2014, 30% of working carers were earning at least £20,000 less than before as a result of caring.
  • And the significant demands of caring mean that 1 in 5 carers is forced to give up work altogether.

Carers UK – facts and figures.

A problem for organisational life?

It is easy to see why the increasing numbers of ‘working carers’ might create difficulties for organisations, and for HR and resource planning departments in particular. The advent of caring responsibilities often comes unexpectedly, as an elderly relative suddenly becomes less capable of looking after him- or herself. Caring responsibilities can feel open-ended and unpredictable, and it is impossible to know whether they are going to last for months, years or even decades. It is not easy to adjust workload allocations and expectations when it is unclear how long-lasting or how intensive an employee’s caring duties will be.

For ‘working carers’ themselves, the advent of caring responsibilities can represent a serious challenge to their sense of identity. We live in a world where the idea that professionalism equals dedication reigns supreme. Corporate strategists and culture change specialists strive for high levels of organisational commitment from their employees. The business literature abounds with terms such as ‘employee engagement’ and models of organisational ‘transformation’ which emphasise the importance of employees being inspired by, even devoted to, their leaders and the corporate vision they espouse. Most management consultants and OD strategists would probably agree that employees need to have ‘skin in the game’ if an organisation’s objectives are to be achieved. And for ‘working carers’, of course, there is more than one ‘game’ making claims on their ‘skin’!

Across both private and public sectors, organisations are working hard to try to help the increasing numbers of ‘working carers’ in their midst. Many have established support networks, and introduced a range of policies including paid and unpaid leave to try to acknowledge the complexities of balancing work and care. Appraisal systems are being reworked to try to set ‘performance’ in context, and to focus on quality rather than quantity of contribution. In some of the organisations I have visited, senior leaders talk openly and publically about their own caring responsibilities and about the practical and emotional impact these have had on their work and sense of professional identity. This is powerful stuff, because it can help to dissolve the shame and anxiety that employees feel when their domestic lives make it impossible to be the perfectly ‘engaged’ employee that has traditionally been required for career success.

However, despite the valiant efforts of many organisational leaders, HR professionals and line managers, I think there is still an assumption that becoming a ‘working carer’ is basically a problem – both for the organisation and for the individual. However sympathetic colleagues, managers and support staff try to be, there is an underlying sense that care disrupts, even destroys, careers.

An opportunity for organisational life?

I want to challenge this assumption that care necessarily destroys careers by asking the question:

“What is it that we experience as carers that might help, rather than hinder, us in our organisational lives?”

In other words, I think we might look at our experiences of care as a valuable resource and source of expertise. This relates to our experiences of both giving and receiving care, and to how these inform and shape our interpersonal relationships throughout our lives. I make this somewhat provocative suggestion not because I want to downplay how tough being a ‘working carer’ is. Nor do I deny that having to incorporate different work patterns and unpredictable availabilities can be extremely disruptive in organisational life, and trigger all sorts of resentments amongst colleagues who are left holding the fort.

But there is an extraordinarily powerful upside to having the notion of care at the heart of our organisational lives. This is because care experiences are all about asymmetrical or unequal relationships – about the way in which people interact when one person has more power or capability or capacity than another. And this is precisely the kind of interaction that underpins many key debates in business, including:

  • Relationships between leaders and followers – which are marked by differences in status, power, experience and/or expertise.
  • Decisions over leadership and change management methods – especially those which involve deciding between ‘transactional’ and ‘transformational’ approaches.
  • Ideas about ‘tame’ and ‘wicked’ problems – and the extent to which stakeholders are either directed or empowered to participate in their resolution.

All three of these examples involve understanding the power dynamics of asymmetrical or unequal relationships. All three of them have a noticeable presence on the curricula of both corporate and academic leadership and management development programmes. And, in my view, all three of them are illuminated through the prism of our experiences of care.

This is because caring involves taking decisions about how to manage differences in status, power and expertise, without dominating or infantilising the other person. Caring also means coming to terms with being on the receiving end of a whole host of projected emotions, often in the form of anger, resentment and frustration. These are often completely unfair and unreasonable, but then again, so are the feelings of fury and disappointment that are hurled at leaders when they let us down and prove to be mere mortals after all. Our expectations of both ourselves and others in caring relationships evoke incredibly strong and primitive emotions. Acknowledging and coming to terms with these in our private lives might – just might – help us to acknowledge and come to terms with them in our working lives, too.

These thoughts dovetail with increasing calls for organisational life to be infused by an ‘ethic of care’. For me, the idea that care relates to ethics is really important, because it stimulates reflection on the meaning of our work and our organisational commitments, rather than pushing us always to be looking for ways to get more efficient. Indeed, my arguments about how care might enhance our working lives will lose their power and authenticity if they get leveraged into policies or procedures – or into jargon or sound-bites. In my view, an ‘ethic of care’ is not a shiny new model or theory that can be turned into a recipe for business success. Instead, it involves reconnecting with what we already know as human beings – with our understandings of the emotional dynamics of our selves and our relationships with others. Care is an ‘opportunity’, not in the sense that organisations can colonise and yoke it to issues of business performance, but more in the sense that, as human beings, we might reflect on how our experiences of our lives outside work might not be so different or disconnected from our experiences of our lives inside it.

An ‘ethic of care’ in organisational life involves:

  • Challenging the assumption that care is purely a domestic issue, or something ‘pink and fluffy’.
  • Reconnecting our experiences across the so-called ‘work/life boundary’.
  • Acknowledging the emotional undercurrents of our working, as well as our private, relationships.

If you are intrigued by any of these ideas, and want to learn more about my current and forthcoming publications in this space, please email me. Also, take a look at the videos from the Business Perspectives Masterclass (February 2016).

Video highlights from The Power of Trust masterclass on 22 May Reply

Creating and maintaining trust in organisations
Professor Ros Searle, The Trust Hub, Coventry University

Building trust from the bottom up: a workplace strategy
Anne Sharp, Chief Executive, Acas

Trusting you, trusting me – An exploration of trust in the recruitment and selection context,Volker Patent, The Open University

Can trust be managed? Ann Francke, Chief Executive, CMI

Further video highlights from Dr Steven Chase, Director of People, Thames Valley Police; Ruth Sutherland, Chief Executive, Relate and Dr Diannah Lowry, OUBS are showcased via The Power of Trust webinar.

4 ways to build trust: A billion ways to lose it. 7

Richard Byford
Guest blogger: Richard Byford, Open University Business School MBA alumnus and Director of Stablebridge Ltd, a company specialising in business resilience and repairing broken business relationships.

It used to be that you could build your reputation or brand simply by spending money on advertising and clever PR. As long as your name didn’t make it into a scandal story on the television or newspapers, you could buy a reputation as easily as writing a cheque.

Now, however, everybody with an Internet connection is waiting to take a poke at you for no other reason than that you have annoyed them. Last week I spent an interesting day at the Open University Business School’s Business Perspectives ‘The Power of Trust’ event, learning how trust is won and lost in a world where you can be demonised by a single tweet. It was a good day to pull together all my thinking about the subject:

1. Be capable

People trust people and brands who consistently deliver what is expected. Don’t promise a product that doesn’t do what it says on the tin. Don’t promise services you can’t deliver. Meet or exceed peoples’ expectations.

2. Be benevolent

It is not enough to ‘do no evil’; you need to actively do good. People will only trust you if they know that you are acting in their interests. No amount of words will compensate for being caught doing something bad. Make sure your staff fully understand that you expect them to ‘do good’ as well. Align your reward systems to ‘doing good’ as well as meeting KPIs.

3. Be authentic

Have integrity. Know what your values are, propagate them through your organisation and make sure that everybody sticks to them – even when nobody is watching. Integrity is all about living your values. Making values explicit is a key trait of leadership.

4. Be fair

Be consistent and predictable in your dealings with everybody. Align your processes and procedures so that everybody knows where they stand all the time. Set peoples’ expectations and stick to the plan. People will trust you if they understand that justice and consistency is built into all your systems.

 

 

Financial Management summary report Reply

Financial Management summary report imageHere we introduce you to our sixth Business Perspectives summary report in the series, which concludes the financial management quarter.

This report takes a look at the wider world of Financial Management and the latest trends relating to organisation, data, responsibility, people and customer 3.0.

We invite you to download and share the report and send us any comments. If you would like to contribute your perspective towards future themes, please contact our Business Perspectives Editor at oubs-alumni@open.ac.uk.

Click here to download the report.