At the macro level, the attention Theresa May’s government is giving to corporate governance and her call to reform capitalism, so that it “works for everyone, not just the privileged few,” is welcome. But, at the micro-level a lot can be done to improve corporate governance and performance through better boardroom practices and better training of board members.
Pressure is on for stronger governance rules and in time this may lead to shareholders setting pay levels, bonus cultures being curtailed, perhaps pay at the top being linked to pay at the bottom, new responsibilities for non-executive directors, and maybe even workers on boards.
There is however a lot more to improving corporate governance than regulation from above. A great deal can be done to build effective, ethical, corporate governance by improving how company boards and directors operate and in better preparing new and aspiring board members for what is an increasingly complex role.
Based on his extensive research amongst 5,500 boards in 14 countries, Professor Andrew Kakabadse has created the unique Board Directors’ Programme at Henley Business School to improve boardroom performance – to strengthen governance and to inspire better organizational performance; to show both what needs to be done to make a board fully compliant and how a different approach can create sustainable competitive advantages.
Kakabadse’s research suggests that only 20% of global corporations operate with a truly ethical approach, despite the evidence that ethical organizations are statistically more likely to perform better in the medium- to long term, and appear to suffer no commercial disadvantage even in the short-term. His research also finds the majority of boards are not respected by their managers – they see them as being impotent and not appreciating the reality their organization faces.
To truly engage with the reality the organization faces, boards need to raise their thinking beyond just this quarter’s financial results to take a role that is focused on value creation and active involvement in the key strategic initiatives and core business processes of the company, one that inspires innovation, and is firmly focused on customers as well as other stakeholders.
Central to this is the performance of the individual board member and his or her ability to operate effectively as a board director, to harness the potential of the team and of the whole organization, and to inspire respect and admiration from all.
The Board Directors’ Programme has a high level of personal focus, helping current board members, individuals who have ambitions of becoming board members or individuals who work with board members, to understand what it really means to be a board director, and debunking the myths.
During this 2-day residential programme, collaborative learning, individual feedback and a range of psychological instruments are combined with research and the first-hand experiences of guest speakers who have had board leadership roles in a range of organizations. The program will help individuals:
- Lead others to fulfil their individual and collective potential through mentoring
- Recognise the value of sustainability versus financial return, and the value of morality, loyalty and a positive reputation
- Appreciate the difference between performance and compliance, and use of discretion
- Fully understand the role and obligations a board member
- Trade effectively through a range of dilemmas and challenges
- Identify their real competitive advantage(s) and establish their unique competitive space
When board members fully understand their roles and obligations, and appreciate the value of inspiring closer team working and shared goals, their organization will benefit from greater loyalty, retention and productivity, and its improved reputation will attract more and better customers, employees and other stakeholders.
The Board Directors’ Programme is run in June and November 2017.