Governance reviews: trick or treat?

13 October 2023

As we approach Halloween, GGI chief executive Andrew Corbett-Nolan says it’s time to look into the darkest corners

Reviews are a fundamental tool of good governance. Pretty much universally, codes of governance recommend that every board should review its working arrangements every year, and every three years this should be externally facilitated to bring in an outside perspective.

GGI works in the reviews market, and indeed we would say that ‘every improvement journey begins with a review’. We could add that in any organisation claiming to be improvement-driven the same discipline should be applied to the board and that the annual and tri-annual reviews are the critical ‘S’ within their own ‘PDSA’ cycle.

So, as we approach Halloween what’s ‘this year’s black’ in the review market? GGI would say the bar has been raised, and any governance (or well-led or board effectiveness) review should look at those dark corners inhabited by potential ‘HILPs’ (high impact low probability events) – the sort of thing that can leap up from nowhere and subsume an organisation. The current list of tender areas would include Freedom to Speak Up, equality, diversity and inclusion (EDI), health and safety, sexual safety – parts of the board’s accountabilities usually pushed down to management and often brought to the board once a year rather than being an ongoing, everyday part of the contract between leaders and staff.

We look more now at impact and evaluate how the board has actually added value to the organisation and what the board can claim to have changed. Here we turn to King IV’s four meaningful outcomes – ethical culture, better control, value creation and legitimacy – as the high-level mission of every board.

The questions go something like ‘as a result of the board’s work this year, has the organisation progressed its ethical culture?’ and then we look at decisions, discussions, the feedback from peers (stakeholders) and some metrics that indicate fairness, trust etc., such as Workforce Race Equality Standard (WRES) data and staff surveys.

No modern Halloween would be complete without a nod to AI and GGI governance reviews are no different. We are starting to use and experiment with using AI to understand board preoccupations by analysis of large volumes of documentation over time, and then relating this to impact indicators such as organisational productivity, staff churn or the successful reduction of risks over time. We are unaware of any other company doing this and the initial forays into this area have been fascinating. The machines haven’t quite got to replace the humans yet, but we are looking at how we can borrow from how other disciplines are using AI such as marketing and sentiment analysis. In true Dr. Frankenstein mode we’re looking for guinea-pigs who are up for being experimented on.

So, trick or treat? Reviews are important and should be a treat – indeed the most usual feedback comment we get after a review from directors is ‘I didn’t expect to enjoy the process, but I really did’. Too often reviews are a trick – just comparing the board to some standards such as ‘number of NEDs per hectare’, display the difference and say ‘there you go that’s your development plan’ with no thought for context, impact, relevance or usefulness.

This month at our webinars and in this newsletter, we explore some issues that may be useful to think about when commissioning or going through a review. They should be the most valuable document a board gets and rooted in ongoing improvement. Expect nothing less!

Meet the author: Andrew Corbett-Nolan

Chief Executive

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Prepared by GGI Development and Research LLP for the Good Governance Institute.

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