Internal governance an ongoing process, not a laundry list

Organizations with successful internal governance often have boards that are fully engaged and are able to “wrestle with and get into heated debates” over the issues and questions that drive an organization’s strategy, said Paul Ledwell, president of the Institute on Governance.
Ledwell spoke at the Canadian Association of Mutual Insurance Companies mid-term meeting in Toronto. In his speech he suggested that organizations think of internal governance as a framework and not a laundry list to be checked off.
The framework should be based on three modes of governance that boards should be engaged in. These three modes include:
•    Fiduciary — “If your board is not fulfilling this role, then you have a deep problem. But if it is only fulfilling this role, you equally have a problem,” Ledwell said.
•    Strategic — “This is where the board and management work together to develop priorities and strategy, where there is openness to address big picture questions.”
•    Generative — “What is often overlooked in the midst of urgent and immediate, and even strategic, but it is important to developing true leadership at the board level,” Ledwell said. “This is the early thinking on wicked problems that helps frame mission, strategy and problem solving and when done properly, brings the board in at the very first stages before mission is drafted and strategy proposed.”
The latter category may be a frightening thing for a CEO to admit to a board that he/she has not fully worked through a solution to a problem or a plan for a perceived opportunity, Ledwell continued. “But, if we can’t have these discussions around the board table where can we?” he asked.
“And all indications are that these are the issues that really engage boards and compel them to govern more robustly.”