TOWARDS DYNAMIC GOVERNANCE 2014
European Corporate Governance Report
DYNAMIC GOVERNANCE IN CONCLUSION
Of course, compliance is necessary and important. But, the route to excellence in corporate governance lies in understanding and acting on the six elements that achieve truly dynamic governance.
You may wish to assess the position of your own board on its journey towards dynamic governance by considering the following questions.
Deep business knowledge • In what ways does the board demonstrate it understands the commercial DNA of the company?
• What steps have been taken to ensure that the board is not flying blind and can hold the executive management properly to account?
Diversity of thought • How does the board demonstrate that it has the right balance of skills, knowledge and experience to constructively challenge management?
• How would you describe your organisation’s approach to diversity? Is it characterised by diversity for its own sake or is it diversity driven by business needs?
Engaged leadership • How would you describe the leadership style practised by your Chairman and senior board members? Does it add to or diminish the effectiveness of the board – and in what ways?
• What steps have been taken to ensure that the Chairman has an appropriately varied range of skills?
Strategic alignment and execution
• How does your board use its knowledge and experience to help executives develop robust and sustainable strategies?
• In what ways does the board demonstrate it understands, shares and is aligned around these strategies?
Capacity to adapt • Who asks the critical questions about the balance between today’s business and future options? Who assesses the risk of future asteroids that might cross the company’s path?
• What steps has the board taken to challenge the CEO on the balance between today’s activities and future operations?
Leadership talent • How much time does your board invest in planning the flow of leadership talent within the company?
• How robust is your succession process?
How many of the six best practices we have identified do you utilise and implement? 16 Towards Dynamic Governance 2014 – European Corporate Governance Report
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