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On Governance…

by Rick Baker
On Jul 20, 2010
William Dimma has served on over 50 corporate boards and 40 not-for-profit boards. He is well-recognized with doctorate and honourary degrees from several Canadian universities, an Order of Ontario, and an Order of Canada.
 
In 2006 Dimma published ‘Tougher Boards for Tougher Times’.
 
Here is an excerpt from page 44:
 
“You know and I know that best practice in governance is a complex synthesis of many things: board composition, structure, process, chemistry, leadership, culture, behaviour, and values. But it’s also influenced, at least to some degree, by a host of largely uncontrollable external variables (what economists like to call exogenous factors).”
 
While the book has a big-enterprise thrust – ie, a subtitle of “Corporate Governance in the Post-Enron Era” and the use university boards as an illustration of a not-for-profit organization – directors of smaller-enterprise boards can learn from the messages Dimma teaches.
 
We can start with the above Dimma quote…his list of things required under the complex synthesis of governance.
 
We need to simplify Dimma’s list.
 
We also need to get to a point where we agree governance does not have to be a complex synthesis.
 
We can start by simplifying the ‘Dimma list’.
 
To simplify the list we can repackage it as follows: Values > Culture > Communication > Value. I have blogged about this …for example.
 
In summary:
 
Values lead to…

Culture, which should include top-notch

Communication, which when done with excellence creates

Value for all stakeholders

Values:
 
By Values, I mean the Personal Values of the directors. To the extent a director holds more power than others the Personal Values of that director will dominate. For example, if one director controls the corporation then that person’s Values ought to reign supreme. This works when a majority owner is a director of a corporate board. It also works for a not-for-profit board where control isn’t through ‘ownership’…consider, for example, the founder. I expect some will argue this is not the correct approach. I expect some will argue it isn’t good governance.
 
If a person in control has Personal Values that conflict with those of the other directors then good governance will not be possible
 
If Values are not genuine or properly ‘encultured’ then good governance will not be possible.
 
Values must be solidified. I designed a process several years ago to address this need: the My Business & Our Business process.
 
Personal Values, when they are genuine and shared by directors, capture chemistry and set the boundaries for behaviour so those two words can be removed from Dimma’s list.
 
Culture:
 
When the Personal Values of the directors are discussed, clarified, well-understood, agreed-to, and aligned we have set the framework for culture. We have set the foundation for process and leadership. This should never be left to chance. This is particularly true when governance is to be overseen by a Board of Directors [rather than a single individual, or a pair of founders, etc].
 
If Personal Values did not capture chemistry and set boundaries on behaviour then Culture better! So, we can remove those two words from Dimma’s list.
 
That simplifies the under-our-control pieces of Governance to:
  • Values
  • Culture
  • Composition
  • Structure
  • Process
  • Leadership
More on simplifying this list [and simplifying governance] in future blogs…
 
PS: some hints…
  • Composition – shared Values is the most-critical factor for selection, next is ability to deliver measurable Value
  • Structure – the simpler the better…have role clarity [process]
  • Process – the key process is Communication
  • Leadership – inspiring the People to prepare, perform, and perfect the Process

Tags:

Leaders' Thoughts | Values: Personal Values

Comments (1) -

rick baker
4/22/2018 8:32:28 AM #

“What do governance and democracy mean in an exponential world?”

Bruno Guissani
European Director, Global Curator, TED

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