The Board Sets the Direction — Moreover It Sets the Tone
In this insight about board dynamics, I offer lessons from 25+ years as a CEO and my broad experience as a board member. An organization’s chief executive officer is the…
WHAT WE DO...
We offer a variety of services to our clients including
Governance Audit
Annual audit to identify the degree of compliance with policies and alignment of governance documents, and provide recommendations on the gapsComplete Governance Refresh
Audit and alignment of governance documents, update articles of incorporation, bylaws and policies in consultation with leaders and employees. Identify the evidence needed to demonstrate compliance with policies. Classify each system by risk level.Board Selection
Assistance in selecting high performing Board members with the right mix of skills and expertise. Support to the Nominating and Governance Committee to find the right talent. A customized Board Skills Matrix to facilitate the assessment process.Board Services
We help clients improve the effectiveness of the board of directors through alignment, capability building, developing new insights, and monitoring compliance with board policies.
A capable board of directors has a better understanding of where their company creates value, the potential risks, and their strategy.
These boards evaluate resource allocation, embrace robust feedback, and debate alternative strategies. They also assess trends and uncertainties and discuss where to create value. Unengaged boards, on the other hand, can destroy value by focusing exclusively on fiduciary activities or overemphasizing short-term financial results.
Many of today's boards struggle to master the critical governance challenges stemming from regulatory, industry, and macroeconomic trends. We help clients improve the collaboration between management and the board by, for example, facilitating strategic discussions and CEO succession plans.
Effective boards
Useful boards find the right balance between providing strategic direction and ensuring adequate oversight. However, most boards still fall short. In fact, in a recent survey more than a quarter of directors said that their board's decisions and activities only have moderate to low impact on the company's long-term value creation.
We lead group and one-on-one discussions with board members and chairs to improve the knowledge of the board and help directors build a long-term mindset.
Build a forward-looking board
Many boards spend significantly more time on fiduciary activities than on value-enhancing discussions. Our recent research has shown that useful boards interact more often with their management teams and engage in continuous improvement activities such as regular feedback and performance discussions.
We support our clients with their regular Board-effectiveness discussions by analyzing how they spend their time, how they work together, and how they perceive board performance overall.
The single biggest problem in communication is the illusion that it has taken place.”— George Bernard Shaw
Communication is a core part of the human experience — yet, we still struggle. Despite the explosion of communication technology, under-communication prevents organizations from reaching their full potential.
Governance documents (articles, bylaws, board policies, operational policies) are the foundation of organizational communication and provide direction for meeting organizational objectives. They define the corporate culture. Governance documents must be aligned and reviewed and adjusted regularly to remain productive.
In our governance refresh, we engage organization leaders and employees to increase motivation, productive relationships and overall workplace productivity. We challenge “policy owners” and users to become innovative problem solvers, involved in the process of defining and implementing a governance system tailored to work for their organization.
OUR APPROACH ...
Creating an evidence-based system that works for you
Our approach results in policies that are:
- Reflective of the desired culture of your organization
- Essential, as determined through our risk-based analysis
- The right size and complexity for your organization
- Written in plain English
- Tested to be user-friendly (ensures that users can interpret and apply the policies)
- Achievable
- Auditable to ensure policy compliance (we identify the evidence required to demonstrate compliance with each policy)
- Evolving, to address new and inherent risks
Organizations evolve and so must their policies
Design policies to:
- prevent specific issues from reoccurring
- eliminate potential problems before they happen
- maintain organizational order and efficiency
Oversight and accountability is complex and challenging
Policies provide clarity regarding responsibility for activities that are of critical importance to the organization such as health and safety, legal liabilities, regulatory requirements or matters that have serious consequences. Without a control mechanism, even the most sensible policies will fade, allowing problems to creep in. To succeed, regardless of the size of an organization, all governance documents must be relevant and have an accountability factor.
Fact: Employees are testing your organization’s policies every day. Some employees adhere to every procedure, and others will keep checking every rule to find a weakness — to see a chance to mould the organization to their likes and preferences.
Governance documents guide your organization
Our strategies to ensure your governance documents are guiding your organization
Governance documents need to demonstrate a compelling and transparent communication style to ensure that everyone understands the intent of the material without further interpretation. They must present ideas clearly to all groups. Below is our approach.
1. Policies are nothing without accountability.
Some leaders write policies and procedure manuals focusing that every “I” dotted and “T” crossed. They believe they will achieve compliance by having employees sign off indicating that they have read and understood every word. However, they soon discover that the problems persist. The leadership team needs to be paying attention to help employees function within the policies, identify and coach their team through infractions when they occur. They need to fix policies that are not working. Otherwise, breaking the non-compliance becomes the norm.
We have identified 26 behavioral competencies. Only one is a key competency of employees who consistently exceed expectations: Maintains Accountability.
It is the courage to step up to the plate and take responsibility for a specific job, task or situation. It means wanting to be the one most accountable for the results of a team, activity or project, in spite of criticisms or lack of responsible involvement from others. It is about making every conceivable effort to ensure that things go right and being prepared to assume the ultimate blame or consequences for what goes wrong by always believing that it could have been done better.
2. Everyone must be subject to the same policies
Any preferential treatment creates a double standard. Special privileges can be earned through clearly defined qualifiers. However, allowing indiscriminate rule-breaking or bending is a guaranteed way to contaminate your organization’s culture. Build and maintain a dynamic culture where everyone from the Board throughout the workforce strives to do what’s best for the organization.
3. Every policy should serve a purpose — users need to understand why
Without understanding, some employees may interpret policies as an infringement on their freedom. Invest the time and energy to educate your team on why specific policies, especially unpopular ones, were created. For example, consider whether your signing authorities are negatively impacting the ability of employees to get work done.
4. Define what is non-negotiable — make it crystal clear
While some policies allow a little wiggle room, some policies cannot allow any. Some policies are the foundation of what the organization is built on and pertain directly to integrity, trust and respect for leadership, employees, customers, vendors, stakeholders and stockholders/members. Certain infractions may have immediate termination as the only option. Others may require probation, reassignment, demotion or specified skill training. Whatever it is, leadership must define where the line is drawn on foundational rules, because non-compliance is a compromise of the highest order.
5. Open and transparent
“No win” situations for leaders and employees will occur — it is impossible to anticipate everything. When a matter arises, hold an emergency the staff meeting to clarify policies and what can and cannot happen for the organization to continue to function operationally and financially. Once the employees understand the conditions, ask them to work together to find a solution that reasonably will satisfy the business needs and their needs. This approach requires the team to work together to achieve an acceptable outcome. More importantly, this method shifts the solution to those directly involved. If the situation is likely to reoccur — consider capturing it in policy.
6. Governance documents set out accountability to protect the integrity of the organization — it is everyone’s responsibility
Everyone means everyone — no matter what the role or position. Playing the “catch them doing something wrong” game means not paying attention to where the organization is going. Every employee needs to be the eyes and ears for what’s going right or wrong — and must know they can speak up without retribution or fear. No one likes a “snitch,” but everyone likes to get his or her paycheck. There’s a difference between a snitch and someone who believes in and protects the organization.
Annual policy audit to strengthen your organization
You have gone to the effort of creating policies in your organization and implementing them. How do you know that they are being enforced and used? That is where a policy audit comes in.
Many organizations are good at establishing policies but have an uneven ability to get their staff to follow them. It is crucial that an organization enforce its policies — If they are important enough to create and approve, they are important enough to execute.
An annual policy audit is the best way to make sure your organization follows your approved policies. Our simple three-step process ensures your governance documents are current, relevant and adhered to.
Related services
Governance Alignment — ensures that all resources increasingly contribute to achieving your mission and vision. Our analytics enables you to objectively align your governance chains for success.
Board Selection — assistance to the Nominating and Governance Committee to identify high performing Board members with the right behavioural competencies, skills and expertise,
Developing Strategy — board working with management to develop the strategy — what to change → what to change to after understanding the current realities and what is possible.
Financial Health Check-Up — looks at 100% of your general ledger transactions and finds the anomalies with the Ai Auditor. We provide a risk-based ranking of the anomalies to save you time and money whether you are investigating past activities, detecting active inadmissible behaviour or preventing potential transgressions — all keep your good reputation.
Leadership Ladder — develop your current leaders and create evidence-based succession plans for high potential employees to fill all leadership positions.
Learn More
Insights — Governance Refresh
Promising Practices in Governance
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Generative Governing Increases Board Effectiveness
There is urgent interest in the problems of boards, and a growing demand for more accountability. Boards do not think about or debate governing; they just do it. Many boards…
What are the governance processes?
Governance processes are defined by the Institute of Internal Auditors definition: Governance processes deal with the procedures utilized by the representatives of the organization’s stakeholders to provide oversight of risk…
Three types of boardroom breakdowns
Boardroom breakdowns set the tone in the organization. This disfunction permenates throughout the entity. Boardroom Breakdowns — Collapse of competence This is when executives take on problems beyond their capabilities…
FAQ — Governance Refresh
Why should I hire Allenvision as a consultant?
Seven Reasons to Hire Allenvision
We believe that your success growth is mutually beneficial. We offer strategic insights and process to jointly determine what needs to be done. Unlike many consultants who will tell you what to do, we work with you to show you how to do it. While we are happy to undertake the complete implementation of a project, we prefer to transfer knowledge, coach and teach your team how to do it.
From filling a short-term executive gap to the implementation of a major program of organizational structural change — hire Allenvision. We provide valuable expertise and insights to help you achieve your goals and execute a strategy.
When is the right time to hire Allenvision?
What on-going steps should you take to ensure you get the best out of a client-consultant relationship?
- External validation: Allenvision has a broad overview, understanding, and external perspective. We use an evidence-based approach in all of our work. A second opinion can provide reassurance before making a critical business decision.
- More time and cost-effective: We focus on a project and see it through on deadline, without distractions and day-to-day pressures. This often makes bringing us in much more time and cost efficient than running a project in-house.
- Specific knowledge, skills, and experience: Allenvision gives you the opportunity to bring in niche skills, without the commitment of employing someone.
- Ability to challenge: Our objective position means Allenvision can bring a fresh perspective. We are not afraid to challenge, and our unique position means we can do so without the fear of reprisals that your employees might have.
- Impartial advice: Hiring Allenvision can offer you a way to reach or justify a desired conclusion and avoid internal conflict. This can be particularly valuable in stressful situations such as job cuts and significant operational or strategic changes.
- Knowledge of best practice: Allenvision works with multiple clients and often serving various clients facing similar problems across different sectors.
- Access to information and resources: Allenvision specializes in dealing with matters related to people, money, and governance. We can bring in data and systems that may not be financially viable for your company.
Overall, Allenvision brings a wealth of strengths to your business and can deliver a full range of services. So, if you are seeking a solution to a particular business problem, developing your employees, creating succession plans, undergoing organizational change or can see new market opportunities but lack the resources to follow them up, Allenvision may be the answer you need.
Learn more about our team members and partners.
What are the main good governance characteristics?
Good governance means that the board makes sure that all resources increasingly contribute to achieving the organization’s mission and vision. Our governance alignment program provides analytics and methodologies give boards and management with the tools to rapidly model, assess and optimizes your organization. This requires generative thinking and governing.
Good governance is accountable
Accountability is a fundamental requirement of good governance. The organization must report, explain and be answerable for the consequences of decisions it has made on behalf of the people serves — shareholders, customers workforce and other stakeholders.
Good governance uses generative thinking
Boards govern more effectively when they take a leadership approach to their work.
- The fiduciary mode — the stewardship of tangible assets. This mode is the bedrock of governance. Fiduciary work makes sure that organizations are faithful to its mission, accountable for performance, and compliant with relevant laws and regulations. Without fiduciary mode, governance has no legitimacy. If a board fails as fiduciary, the organization — not to mention its shareholders, stakeholder (i.e. donors, clients, employees, or community) — could be harmed. This is the central focus of most board work.
- The strategic mode — develop the strategy with management to set the organization’s priorities and course and to deploy resources accordingly. Without the strategic mode, governance has little power or influence. Some boards are more about staying on course than setting the course.
- The generative mode — boards and management frame problems and make sense of ambiguous situations. This shapes the organization’s strategies, plans, and decisions. Most organizations lack frameworks and practices for this work and boards become bystanders to it — even though it is central to governance. Governance must focus on optimized alignment of its structures to overall strategies. Few boards are good at being engaged in generative governing.
Good governance focuses on optimized alignment of its structures to your overall strategies
We view these structures collectively as “governance chains.” Good governance means that you make sure that all resources increasingly contribute to achieving your mission and vision. Our analytics enables you to align your governance chains for success objectively.
Good governance is transparent
People should be able to follow and understand the decision-making process. This means that they will be able to see how and why a decision was made clearly – what information, advice and consultation were considered, and which legislative requirements (when relevant) were followed.
Good governance follows the rule of law
This means that decisions are consistent with relevant legislation or common law and are within the powers of the board.
Good governance is responsive
The organization should always try to serve the needs of shareholders, customers workforce and other stakeholders while balancing competing interests in a timely, proper and sensitive way.
Good governance is fair and inclusive
Feelings of well-being results from shareholders, customers workforce and other stakeholders are considered by the board in the decision-making process. This means that all groups, particularly the most vulnerable, should have opportunities to take part in the process.
Good governance is effective and efficient
The organization implements decisions and follow processes that make the best use of the available people, resources and time to make sure the best possible results.
Good governance is participatory
Provide an opportunity for anyone affected by or interested in a decision to take part in the process of making that decision. This can happen in several ways:
- provide interested parties with information
- ask for their opinion
- offer the opportunity to make recommendations
- make them part of the decision-making process
What comes first structure or strategy?
Aligning organizational structure with its strategy is essential for an organization to deliver its plans and achieve success.
Here is how we define:
- Strategy is how your organization goes about its work is its strategy (vs. your strategic plan document). This includes the plans that set out how your organization will use its major resources to meet specific goals.
- Structure is the way the pieces of your organization fit together to meet a common goal. The structure is much more than an organization chart. It is the people, positions, procedures, processes, culture, technology and related elements. It defines how all the pieces, parts and processes work together.
- Alignment means that every human, organizational, technical and financial resource increasingly supports and contributes to the achieving strategy in a fashion that is: demonstrable, measurable, efficient and effective, and comply with your principles, policy directives and constraints.
- Workforce is the resources to deliver your plans. It includes staff, partners, outsourced work, and consultants.
Do not view structure separate from strategy
Your organization’s structure is a powerful force. It can support your efforts or work against them. You cannot direct your organization to do something for any length of time unless the structure is capable of supporting your strategy. Task overlap creates confusion, inefficiencies and lack of accountability because it is not clear who does what by when. A strong foundation for long-term productivity requires you to structure your entire workforce to avoid task overlap and confusion.
With our Governance Alignment Program, you optimize your structure. It provides a platform to adjust the structure every time you adjust your priorities.
Aligning structure with your strategy improves efficiency, promotes teamwork, creates work together, and reduces cost. Structure and strategy are dependent on each other. You can create the most efficient and team oriented structure possible and still end up in the same place you are or worse if a good strategy is not adopted. Great your strategy right first.
With a clear focus on what you want to do, align your structure in such a way to best do this. Be thoughtful. Divide responsibilities for optimal results, create branches and decide whether each effort or group participation is the best method for it to meet your goals. The structure needs to support strategy. The strategy is fluid. When you change your strategy, you must make sure your structure supports the new strategy. Otherwise, the existing structure pulls your organization back to its old strategy.
When you make major changes, you must carefully think out every aspect of the structure required to support the strategy. Every part of your organization, every person working for it needs to focus on supporting the vision and direction. Integrated all the effort and resources support the strategy.
It takes the right structure for a strategy to succeed
Management that is solely focused on results can have a tendency to direct everyone on what they need to do without paying attention to the current way your organization works. While members of the workforce may carry out these actions individually, it is only when their daily work supports strategy that your organization’s direction is sustainable over time.
To carry out such a strategic shift requires a change in your organization itself. A well-thought-out structural change is based on a detailed cause and effect analysis. You do not just change a structure to change it. Make sure the changes support your strategy and your workforce understands the reasons for the change. At the same time, do not just start a better leadership and engagement approach in your company or alter the organizational chart without evaluating how that will affect your ability to carry out your current strategies.
We cover this in detail in our "achieving strategy approach." Our "goal alignment program" provides robust tools and methodologies to create the structure that best supports meeting your strategic goals.
