Measuring Governance | An art or a science?
24 February 2023 at 10:30:00
Governance is troublesome, not because its unimportant, it's critical, but because it's very difficult to measure. What if we could, what if we could create an index that allowed boards and their directors to reflect on the perception of governance across and throughout their organisation? Well, you can.
"If it can't be measured - it doesn't exist". Joan Freeman
This has been quoted a lot, and perhaps is embraced under another, which emerged nearly 40-years ago from Peter Drucker,
"If you can't measure it, you can't improve it".
Governance, the 'steering' of an organisation and its people, is troublesome.
Not in principle, because we all appreciate its benefit, but the fact that measuring or quantifying governance is challenging.
How effective is your governance?
How does it enhance aspects of your business, and indeed,
What level or quality of governance is present in your organisation?
Not easy questions to answer.
Perhaps I also need to be specific here, I'm not talking about Corporate Governance, which has codes and regulations associated with it; where in most jurisdictions, organisations which are listed have to document and publish 'comply or explain' statements.
Here, assessment is measured against compliance, ratios of non-executive vs executive directors, overall board diversity, incidences of non-compliance, employee satisfaction outcomes and other indices.
I'm referring to governance in its broadest sense.
How well your organisation is steered and governed?
How well your organisation is operated?
What is the quality of the decisions made?
What is the efficacy of implementation?
How clear are your values and are they lived?
Over the last 3-years, I have trawled the literature in governance, operational efficiency, behavioural science and neurobiology. I have also ventured into philosophy, Buddhism and the Skeptics. Why?
Well, because if we accept that governance is about 'steering' people, then we have to embrace the humanity that exists in our organisations and include these aspects in any model we produce.
All of these have informed my model of governance.
As an academic though, as well as a practitioner, I have also had to use the skills of a researcher to consider carefully how best to assess governance.
The measures for Corporate Governance 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'?"
In this vein then, I have created a methodology for assessing the quality of governance in organisations using the nine periphery and three core elements of my Model.
There are 36 statements.
Each statement requires a sliding scale response.
Each of the nine elements is internally validated.
Each of the statement responses is given a confidence rating.
All three core elements have outcomes
All nine periphery elements have additional outcomes
This index, the GOVindicia, produces outcomes for each of the elements and provides a quantitative view of the governance within your organisation. A view driven by the people within your organisation.
These data outcomes can be used to implement and drive governance improvements. They allow the board to internally assess its organisation's position against each of these elements and provides a comprehensive system by which that can reflect, enhance and monitor their governance.
Want to find out more, please visit my website, or contact us for a demonstration.