BoDs guide the senior management team through effective questioning, coaching, advising, and assessment of cross-management disciplines and performance results, and improve the overall organizational maturity.
The governing body such as corporate directors must define the management’s job, which is embraced in the purpose, policy, strategy, objectives of the organization, focusing more on the following aspects to improve overall organizational effectiveness, agility, and maturity.
Oversee an integral and increasingly important aspect of business strategy: Corporate boards oversee the business strategy effectiveness and agility. De facto, every organization has a dynamism of strategies: competitive marketing, product, technology, etc. In the networked society, strategy and execution are more and more intertwined. The strategy is not a strategy when isolated from the business ecosystem. The strategy only works if it is coherent to get implemented for delivering well-set business results.
The BoDs need to ask insightful questions such as: Is the strategy executable by the organization, providing competitive advantage? Do strategists consider the external environment (social, political, economic, technological, industry, market, stakeholders, etc.) and the internal environment (resources, capabilities, systems, structure, culture, stakeholders, etc.) when designing a strategy? Does strategy management take people, management, and leadership into account and put it in perspective? Etc. The corporate board’s strategic oversight is crucial to identify and strengthen the weakest link in strategy management, inspect strategy suitability and agility for steering the business in the right direction.
Ensure management and governance are interdependent and complementary disciplines: The more complex contemporary organizations become, the broader scope of corporate governance turns out to be. Corporate governance needs to have direct links to business management discipline and its processes to make sure that management is doing its job properly; provide monitoring, measuring, and enforcement mechanisms to corporate management. So the corporate board directors as governing body needs to develop a good sense of the appropriate scope of decisions, and what is pertinent to its role versus what is really the purview of management. Insightful BoDs need to ponder: How resilient the classic management has been when the business world is shifted from the industrial age to information age, now digital age, from business modernism to postmodernism? Which management style is best fit based on the sector and nature of the business? How are the important management works achieved in terms of planning, use of available resources, clarity of direction, capital investment? Etc.
In fact, the governance and management disciplines go hand in glove, and the corporate board decides what the expectations of management are, pulling management out of the trees to see the forest by enforcing governance disciplines. Setting policies is the co-responsibility of the governance body and management team for guiding, influencing, and regulating the decisions and behaviors of the entire workforce, management included, to drive sustainable value-creation to varying shareholders in a structural way. When the management responsibilities keep evolving for adapting to the business dynamic, the governance structure, process, or practices should also periodically be assessed and make adjustments accordingly.
Set policy to influence and monitor performance results: The corporate BoDs must monitor the management’s performance and conformance in order to verify that what was specified is what is actually happening. The disconnect occurs or the performance blind spot is created when the wishful thinking at higher levels detaches from reality at lower levels. The BoD’s performance monitoring is crucial to close blind spots which perhaps further cause the management decision ineffectiveness or dysfunctional business system.
In modern socially responsible companies, it isn't just about what - the performance result you have achieved, but also about “how” you have achieved performance. So the good principles and guidance need to be formulated for making effective decisions and deployed on consistently measuring and interpreting these "softer" aspects of achieving high-performance results. The issue of Performance Management measurement isn't about accuracy, but of validity. The fair performance assessment from corporate boards helps the management get objective perspectives on understanding what’s blocking achievements, targets and how to improve performance management effectiveness.
The corporate board’s strategic oversight is crucial to identify and strengthen the weakest link in strategy management, close decision blind spots, guide the senior management team through effective questioning, coaching, advising, and assessment of cross-management disciplines and performance results, and improve the overall organizational maturity.
The BoDs need to ask insightful questions such as: Is the strategy executable by the organization, providing competitive advantage? Do strategists consider the external environment (social, political, economic, technological, industry, market, stakeholders, etc.) and the internal environment (resources, capabilities, systems, structure, culture, stakeholders, etc.) when designing a strategy? Does strategy management take people, management, and leadership into account and put it in perspective? Etc. The corporate board’s strategic oversight is crucial to identify and strengthen the weakest link in strategy management, inspect strategy suitability and agility for steering the business in the right direction.
Ensure management and governance are interdependent and complementary disciplines: The more complex contemporary organizations become, the broader scope of corporate governance turns out to be. Corporate governance needs to have direct links to business management discipline and its processes to make sure that management is doing its job properly; provide monitoring, measuring, and enforcement mechanisms to corporate management. So the corporate board directors as governing body needs to develop a good sense of the appropriate scope of decisions, and what is pertinent to its role versus what is really the purview of management. Insightful BoDs need to ponder: How resilient the classic management has been when the business world is shifted from the industrial age to information age, now digital age, from business modernism to postmodernism? Which management style is best fit based on the sector and nature of the business? How are the important management works achieved in terms of planning, use of available resources, clarity of direction, capital investment? Etc.
In fact, the governance and management disciplines go hand in glove, and the corporate board decides what the expectations of management are, pulling management out of the trees to see the forest by enforcing governance disciplines. Setting policies is the co-responsibility of the governance body and management team for guiding, influencing, and regulating the decisions and behaviors of the entire workforce, management included, to drive sustainable value-creation to varying shareholders in a structural way. When the management responsibilities keep evolving for adapting to the business dynamic, the governance structure, process, or practices should also periodically be assessed and make adjustments accordingly.
In modern socially responsible companies, it isn't just about what - the performance result you have achieved, but also about “how” you have achieved performance. So the good principles and guidance need to be formulated for making effective decisions and deployed on consistently measuring and interpreting these "softer" aspects of achieving high-performance results. The issue of Performance Management measurement isn't about accuracy, but of validity. The fair performance assessment from corporate boards helps the management get objective perspectives on understanding what’s blocking achievements, targets and how to improve performance management effectiveness.
The corporate board’s strategic oversight is crucial to identify and strengthen the weakest link in strategy management, close decision blind spots, guide the senior management team through effective questioning, coaching, advising, and assessment of cross-management disciplines and performance results, and improve the overall organizational maturity.
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