Governance and governance . . .


“It is clear that good corporate governance makes good sense. The name of the game for a company in the 21st Century will be conform while it performs.“   -Mervyn King, Governor of the Bank of England

As a result of the banking crisis and current global economic recession we hear a lot of talk about “governance”.  Was the banking crisis a failure of governance?  Where was the governance process around the Madoff companies?  What about the governance process of BP leading to the Deepwater Horizon explosion and the resultant oil spill in the Gulf of Mexico?

It is obvious that the term governance has a much broader and deeper usefulness inside of modern organizations than just the traditional focus on compliance to government and legal requirements.

In my experience consulting on turnarounds, culture change and strategy execution, governance is a useful term if properly understood and exercised with good leadership.  I see governance as having, like an onion, several important layers.

The first layer of this particular “onion” is the most obvious, I call it Governance with a capital “G”.  This is the compliance and conformity to legal and governmental requirements.  Timely and accurate business reporting is an example of Governance.  As are accurate minutes of Board of Director meetings, regular filing of various legal and tax forms, and reporting of bank and insurance company reserves.  Big G governance is usually the responsibility of a few key individuals in the organization, notably the CEO, CFO, Chief Legal Consul and head of the Tax Department, among others.

If good governance were really that simple, we wouldn’t have all the scandals, bankruptcies and lawsuits that abound in today’s business world.

But there is more to good governance, much more.  This is what I call “little g” governance. In this case it is the effective exercise of leadership and the governance of self.

Leadership governance has an outer and an inner layer.  The outer layer deals with the effective governance of business and management processes that are critical in the performance of the organization.  Such processes as staff meetings, strategy reviews, performance reviews, operational reviews, project and programme reviews are critical to effective business performance and unless carried out with good leadership and governance, can waste time, energy and resources.

The inner layer of leadership governance deals with behaviors.  Do leaders respect the corporate culture and role model the stated behaviors or do they say one thing and yet behave as if they are exempt?  Do they coach or criticize?  Do they accept accountability or point fingers and pass the blame?  The effective governance of leadership behaviors has proven to be instrumental in either superior performance or corporate demise.

That brings me to the last of the little “g” governance principles.  The governance of self.  The governance of self is perhaps the most important and in many ways the core of all other governance.  Those who fail to exercise self governance will have a very difficult time adhering to other governance requirements.  After all, governance in any situation requires discipline.

The discipline of self governance applies to each of us in the ways we set our own personal goals, how well we keep agreements and commitments, and the degree to which we actually live our espoused values.  Without disciplined self governance it is difficult to face the challenges and pressures of organisational and business governance.  Good governance requires discipline and leadership, not just in name, but in day to day practice.

If we want better governance in our social and business institutions, then we need to elect and promote those who display disciplined self governance.

Tight Lines . . .

John R Childress

E | john@johnrchildress.com      T | +44 207 584 3774      M | +44 7833 493 999

About johnrchildress

John Childress is currently Visiting Professor in Strategy and Culture at IE Business School in Madrid and a pioneer in the field of strategy execution, culture change, executive leadership and organization effectiveness, author of several books and numerous articles on leadership, an effective public speaker and workshop facilitator for Boards and senior executive teams. In 1978 John co-founded The Senn-Delaney Leadership Consulting Group, the first international consulting firm to focus exclusively on culture change, leadership development and senior team alignment. Between 1978 and 2000 he served as its President and CEO and guided the international expansion of the company. His work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (natural gas pipelines, telecommunications and the breakup of The Bell Telephone Companies), mergers and acquisitions and classic business turnaround scenarios with global organizations from the Fortune 500 and FTSE 250 ranks. He has designed and conducted consulting engagements in the US, UK, Europe, Middle East, Africa, China and Asia. Currently John is an independent advisor to CEO’s, Boards, management teams and organisations on strategy execution, corporate culture, leadership team effectiveness, business performance and executive development. John was born in the Cascade Mountains of Oregon and eventually moved to Carmel Highlands, California during most of his business career. John is a Phi Beta Kappa scholar with a BA degree (Magna cum Laude) from the University of California, a Masters Degree from Harvard University and was a PhD candidate at the University of Hawaii before deciding on a career as a business entrepreneur in the mid-70s. In 1968-69 he attended the American University of Beirut and it was there that his interest in cultures, leadership and group dynamics began to take shape. John Childress resides in London and the south of France with his family and is an avid flyfisherman, with recent trips to Alaska, the Amazon River, Tierra del Fuego, and Kamchatka in the far east of Russia. He is a trustee for Young Virtuosi, a foundation to support talented young musicians. You can reach John at john@johnrchildress.com or john.childress@theprincipiagroup.com
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