The principles of corporate governance are straightforward. The challenge is putting them into practice.
These are the principles set out in ISO 37000 Governance of organizations:
The challenges for a real-world organization are a) how to implement these principles as physical activities that the organization’s personnel are aware of and carry out automatically as part of the routine of their work, and b) how to do this without burdening the organization with bureaucracy that serves only to tick the boxes of compliance with a standard.
The following notes are some suggested approaches to this task.
Articulate what you want for your organization. Don’t start with ISO 37000 or any other standard. Compliance with a standard is only a means to an end. It’s up to you to define that ‘end’. What has to be in place for you to be confident that your organization is functioning as intended?
A simple approach is to produce a set of statements that define what it means to say that your organization is well governed. A short list of simple statements like
The fundamental purpose of your governance system is to ensure that the statements are true.
Review of the current state of your organization’s governance framework:
Use our governance self-assessment questionnaire as a starting point. These questions might help you identify weaknesses and gaps in your current governance systems. You can download the questionnaire as a report, which might be useful for internal purposes to support a governance improvement project. Click here to use the questionnaire.
A compliance requirement is any formal statement that affects how the organization operates and how its personnel behave.
Your set of requirements will typically include:
There’s no need to include every conceivable obligation. The concern is only with those that specifically constrain the organization’s activities, or with which your personnel should be familiar.
Your organization’s policies are the foundation of your corporate governance system. If you need to prove that your organization is effectively governed, you need to be able to demonstrate that your policies are under control:
Having a standard process for managing compliance requirements improves the effectiveness and reliability of the organization’s governance system, reduces the total workload, and creates greater opportunity for system integration.
Each compliance requirement should be assigned to a manager with accountability for these tasks:
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