Anyone hear the word ‘governance’ and want to run a mile these days? I wonder if the word has slightly transformed in meaning over the recent past to become more a synonym for compliance with external regulations. Good governance practices, in a wider and more traditional sense, were around some time before the level of focus we have today on the requirements of regulators, legislation, funders and securitisation needs. Taken as a more pure definition, governance in this context requires three things: rules under which business processes are operated; methods of checking and controlling that processes are within those rules; and a method of dealing with any nonconformity.
This starts at the top with the board of directors of course, but having departmental meetings is just as much a part of governance for me. Indeed those department meetings are often where the engagement for conformity actually happens. Communication is a vital part of the process. Systems are becoming more sophisticated at keeping things uniform and preventing deviation. However they can’t completely cover every eventuality, and never will.
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Performance within guidelines does not just happen because someone wrote down a policy or a procedure. It happens for me in two ways. The person performing a role or function does the best they can to ‘get it right’; and also because of the education processes which support and improve those rules. These can be training, supervisory oversight, experience and department meetings. However there needs to be a connection between the control of the rules and what is happening in the processes in order to develop and improve. People don’t intentionally come to work in the morning to do things wrong. Everyone likes to get it right and be recognised for doing a good job. Systems can’t do that, people do that. I find no satisfaction in having a ‘team meeting’ with a website and scoring 10 out of 10 on the test at the end. People need communication to be part of the process.
Many companies have the more formal structures for meetings. But for me, you can’t beat the ability for the higher-ups to engage with the people doing the work day to day. Touch and feel what is going on and it makes a difference. Governance is about more than just the compliance and there is nothing wrong with that. Some of your best work can be done first thing in the morning or at the end of the day by walking around and talking to people! A few open questions ready to go and you can be surprised what you can find out about governance.
Ian Dewsnap is director of European operations at BenchMark Consulting International
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