Excellence in Governance

Transcription

1 Excellence in Governance A presentation to the NZ Aged Care Association Conference Embracing the New Normal, September 2018 Graeme Nahkies BoardWorks International

2 Introduction NZACA Conference Embracing the New Normal 2

3 As governors do we set a high enough standard for ourselves? [The board has] a dynamic obligation to be an insistent driving force obliging an institution to move towards distinction. if a strong board sets distinction as its goal, invests the time and energy, organizes itself for the task, and stays with it, distinction is practically assured. Robert Greenleaf ( Servant Leadership, 1977) NZACA Conference Embracing the New Normal

4 Boards that reach a high standard of performance 1. Adopt an outcomes focus 2. Work hard to ensure they make the best use of their time 3. Use policy as their principal means of direction and control 4. Get the information that supports their governance role NZACA Conference Embracing the New Normal 4

5 Adopting an outcomes orientation NZACA Conference Embracing the New Normal 5

6 1. Adopting an outcomes focus The strategic plans of most organisations are of limited, if any, use at the board level NZACA Conference Embracing the New Normal 6

7 Get rid of the Organisations serve a purpose. They exist to achieve something worthwhile for someone: outcomes results benefits (needs met) Doing stuff is how results are achieved not an end in themselves NZACA Conference Embracing the New Normal 7

8 The starting point for the board s work "Governance is the use of authority to set an organisation's purposes, and to ensure it serves those purposes effectively and efficiently. (Chait, Ryan and Taylor) Everything comes back to organisational purpose and whether that is fulfilled NZACA Conference Embracing the New Normal

9 Ends distinguish purpose from path, results from process, and where one is going from how one is going to get there. (Carver and Oliver) Reporting to the Board 9

10 Plan to Make the Best Use of the Board s Time NZACA Conference Embracing the New Normal 10

11 most of what governing boards do either does not need to be done or is a waste of time when the board does it. Conversely, most of what boards need to do for strategic leadership is not done. (John Carver) NZACA Conference Embracing the New Normal 11

12 To have impact a board must be highly disciplined and focused - in how it uses its time NZACA Conference Embracing the New Normal 12

13 Board impact is typically diminished by the failure to escape the gravitational pull of BAU NZACA Conference Embracing the New Normal 13

14 Deep work is the killer app of the 21 st century knowledge economy (The Economist) Deep work: professional activities performed in a state of distraction-free concentration that push your cognitive capabilities to their limit. Value creating. Shallow work: non-cognitively demanding, logistical-style tasks often performed while distracted. Easily replicated and delegated. NZACA Conference Embracing the New Normal 14

15 Take a long term view of what your board will spend its time on What is it that, if we focused on it, would produce 80% of the result we want? Two key tools: Annual agenda Inverted agenda NZACA Conference Embracing the New Normal 15

16 Sequence the agenda around the biorhythm of a meeting Attendance, energy level and focus decision fatigue Limbering up (social engagement) Deal with the preliminaries The substance - requiring concentration and mental acuity The wind-down compliance, reports etc Start the meeting proper Board-only time? Close the meeting NZACA Conference Embracing the New Normal 16

17 Use the Policy Making Function as the Principal Board Means NZACA Conference Embracing the New Normal 17

18 Effective policy making is the most powerful tool available to a governing board Policy making is the way the board gives direction to, and exercises control over, the organisation s performance It allows the board to be fully accountable for the organisation s performance without having to make all the decisions itself NZACA Conference Embracing the New Normal 18

19 Governance Processes Ends Policy How the board goes about its own business The board s strategic outcomes Prescription Governance (after John Carver) The board s relationship with the CEO Setting limits to the CEO s freedoms Proscription Board-CEO Inter-relationship Executive Limitations NZACA Conference Embracing the New Normal 19

20 How much policy is needed? In policy terms, the board has said as much as it needs to say when it is ready to delegate a reasonable interpretation (ie implementation) of its policy pronouncement to someone else NZACA Conference Embracing the New Normal 20

21 Closing the loop: Measuring and Monitoring the Right Things NZACA Conference Embracing the New Normal 21

22 Too many governing boards are little more than spectators to management activity diverted from the thought leadership that is essential to their direction giving role and responsibility NZACA Conference Embracing the New Normal 22

23 Reduce the clutter We get too much of the wrong stuff NZACA Conference Embracing the New Normal 23

24 Don t get distracted by history Much of what is reported to governing bodies is historical after the fact Are you concentrating on where you ve been or where you are going? NZACA Conference Embracing the New Normal 24

25 Criterion (i.e. policy) referenced monitoring 2.00 Policy making 1.50 Target ratio 1.00 Insolvency risk Long-run trend Policy non-compliance Month by month actual vs. target current ratio NZACA Conference Embracing the New Normal 25

26 Measure and monitor what matters Lead measures not lag (after the fact) measures Lag - weight loss Lead calorie intake, calorie consumption NZACA Conference Embracing the New Normal 26

27 In conclusion Good governance seldom happens by chance - it must be designed and it must be led by the board Boards need to be intentional and purposeful in how they go about their work They need to remember - when they are trying to do someone else s job they are neglecting their own NZACA Conference Embracing the New Normal 27