I often wonder how many company managers today consider their individual and collective responsibilities as a board member particularly in compliance with the Australian Corporations Act?
In a number of my discussions with senior entity individuals I hear comments like, “But our organisation is not a business”. My reply is simple, you as a senior representative of this organisation must understand what is ethical, what is moral, and what is legal. All of these areas can be easily expanded on to better understand an individual’s role and responsibilities under the act. But more so under the law.
There are many senior people I have been in discussion with who simply do not understand their roles and responsibilities in leading by example or maintaining the organisations need for a standard of excellence and the initiatives which drive this.
I believe that every board member must have specific skills in their responsibilities and if these criteria are not evident then the appropriate training must be delivered. Board members must be free of any personal agenda and willing to address the ‘sacred cows’ which may have dominated the decision making processes for many years.
I have found that the best boards and board members identify and work religiously to key performance indicators which give an overall appreciation of the trends which are vital to the ongoing success of the business and support sustainable growth and prosperity. Examples would hinge around financial management and the liquidity strength/trend of all operations including the organisation responsible for operational excellence.
Every organisation should have a master business plan/objective which the board has a responsibility to review and recommend improvement strategies in support of operational management. Without a Strategic Business Plan I could confidently predict that negative consequences will be predictable. This Plan is your primary source direction and financial strength.
It is also important for a board to be free of subjectivity or ingrown perspective. This is where the assistance of independent outside counsel could add substantial value to your decision making process
Board members should always be looking for ways to improve and continually look at both individual and collective ways the business can succeed. One positive strategy is to have a leadership development programme where all personnel feel total support in their growth and subsequent qualities required to make sound strategic input to the organisation.
Boards and individual members do not always need to agree with each other providing productive debate results in positive outcomes. The board must set an example through the creation of supportive attitudes where people truly respect and care for each other.
The rules of good governance engagement is through the development of a ‘Strategic Business Plan’ which will act as the guide for future growth and turn strategies into realities.