Like everything else, the leadership for good business growth comes form the top. Most of the business case studies on inspirational leadership concentrate on individuals – what is their management philosophy, their strategies, what kind of superman or wonder woman are they!!
The company board of directors and non executive directors very rarely get a look in and when they do its usually negative e.g. in the UK the HSBC board were subjected to a humiliating and extremely uncomfortable public interrogation on what the hell have they been doing to combat unethical practices by the bank’s investment division. In the case of one of my previous employers Tesco, the whole board in the last year has been practically replaced.
With the current questions about the effectiveness of Company Board’s, I decided to embark on a small investigation to determine what these collections of individuals should actually be doing to secure good growth for a business. This investigation involved attending training courses, individual discussions with existing board directors, recruitment specialists and actually reading the UK Corporate Governance Code.
The board of directors play a vital role in Good Business Growth, not a lip service but leadership in the set up, vision and the running of the company:
1. The basic elements that a company board works with are the 4P’s of Policy, People, Profits and Principles. This is done with a diverse board membership; representing society and the company customer base. Behaving with integrity through honesty and transparency, whilst avoiding ‘groupthink’..
2. To secure a sustainable business the board of directors should provide the company with the following:
- Leadership through a collective responsibility that constructively challenges and develops proposals on strategy.
- Effectiveness as a group with balanced skills and experience, using a rigorous self evaluation on their performance as a board. The members should contribute sufficient time to the role. Be a worthy and transparently appointed group of executive and non executive directors.
- Secure Accountability through fair and balanced assessment of the business. Understanding and managing risk with internal controls.
- Promote long term success of the company through a formal and transparent remuneration package for the directors.
- Create a dialogue and relationship with shareholders that is mutually understanding and encouraging to achieve the business objectives.
3. In relation to Good Business Growth, what does this mean for the board when working with the executive management team of the business.
- Work with strategy and long term sustainability – secure the ‘Why’ in the business.
- Secure the business Code of Conduct and Company values.
- Understand the Customer Experience of the product or service.
- Help develop strategy and business longevity product through the use of Democratic Design and Price with a meaning.
- Understand and guide the company Responsibilities in the Supply Chain.
- Understand the Risks in the business and how are these risks being identified and eliminated.
- Determine the right KPI Tools to judge the business in terms of good business growth, remuneration and legal requirements.
- Use Process Flow Charts to understand the operational parts of the business on a one page holistic view.
- Where practical understand and follow up the operational management tools employed in the business.
- All types of auditing activities within the business are followed up. The long term goal should be to secure legal, ethical and profitable practices are assured through business processes rather than auditing.
The board cannot go into operational detail, that is for the executive management team. However, the above points can create a framework to apply in their agendas, reports and information packs used in the regular Board of Directors meetings.
4. The company board should be nurturing the success of an organisation through;
- Enabling the love of all its stakeholders
- Securing a company set of core values, policies and operating systems.
- Helping to create a broader purpose to the corporate vision
- Create the conditions for a humble, modest and self effacing business leadership
- Promoting emotional leadership in the business
- Aligning the business incentives and culture
In Conclusion: a company board shapes culture, provides a conscious leadership and secures business functions/capability. It should be able to read the signals and join the dots when reviewing performance and understanding the risks in the real world. By doing this the board secures the 4P’s and achieve Good Business Growth..