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CoSteer partners with the Good Governance Academy

CoSteer partners with the Good Governance Academy

Perrin Carey

28 July 2022 at 23:00:00

CoSteer partners with the Good Governance Academy

Modern governance is perhaps moving into its post-modern era. It’s shifting, often ill-defined and somewhat troublesome. Recently, regulators, movements and academics around the world have been recognising that current codification is adding little to resolve the corporate failures and corporate ethical issues.

Much of the focus of corporate governance codes around the world is to negate the ‘agency problem’ identified by Jensen and Meckling in 1976. Fully negating or de-risking this ‘agency problem’, however, is a challenge, and other theories of governance, such as Stewardship (Davis et al, 1997), have begun to consider this problem to be more human.

Bartlett and Ghoshal (1994) were maybe not the first, but they pushed academics to take a good look at organisational ‘purpose’ and suggested that it could be the driver to effective strategic management. They noted a shift from the “old doctrine of strategy, structure, and systems” to “a softer, more organic model built on the development of purpose, process, and people.” They argued that the principal responsibility of the board is not solely to develop strategy, but to instil a unified sense of ‘purpose’ across and through an organisation.

Governance is inherently very difficult to measure (Darko et al, 2014) and the codification of corporate governance has also led organisations to slide towards a ‘tick box’ approach, despite the requirements for ‘comply or explain’ statements in certain countries.

The measures that do exist are simply not enough, and in fact, don’t really get at the heart of the question, “how well are both the organisation, and the people within the organisation, ‘being steered’ and how well are they ‘steering’?”.

Most measures of corporate governance focus on compliance related issues. Numerous rating models also seem to focus on the inputs of governance, such as the composition of boards and the separation of the CEO and chairman roles and diversity.

All admirable, however, Argüden (2010) argues that these measures simply do not pay sufficient attention to the quality of information, decision-making processes, nor do they link the effectiveness of governance to output measures such as the brand image, employee and customer satisfaction indices, or profitability and value creation.

We are on a road of discovery through research and learning. This programme will focus on exploring the interconnections between organisational culture, the quality and ethics of decision-making and the operational efficacy and performance within organisations.

We are seeking organisations to participate in this research and to therefore contribute to developing a practical, more human and more scientific approach to measuring organisational governance linked to purpose, values and behaviours.

Want to know more? Then sign up on the GGA Website here...

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