Peter Day and I really enjoyed presenting at the Governance Institute of Australia National Conference last week. Our topic was: Management Governance: The New Frontier. We argued that boards have a fundamental role in determining how the management of the organisation should be governed. The board is responsible for ensuring the framework by which management is governed is both adequate and functioning effectively. Leading boards:
- delegate authority to the CEO
- set a top down view of the boundaries on conduct within which management must always operate
- set the organisation’s mission and objectives and ensure these are cascaded to individuals
- approve key controls on decision-making by management
- establish appropriate assurance mechanisms, and monitor both performance and conformance.
The primary purpose of doing so is to improve the organisation’s performance. It’s about unlocking the power of your people by empowering them to do what they need to do with confidence they’re on the right track and staying within the boundaries. When everybody in the organisation is empowered with appropriate authority, pursues their objectives and knows what they can and can’t do, they simply make better, faster decisions.
We outlined the key elements of management governance, what good looks like, and how to go about implementing it. You can check out our presentation on our Resources page.
Good governance of management has never been more important. In today’s information age, organisations need rapid, decentralised decision-making by people who are close to the action. The old command and control approach no longer works in large organisations and is largely dead.