Governance...

Good governance is about making the right decisions, at the right time, by the right people.  It is also about how power and control is shared within the organization. Sounds easy, but many firms find that when their governance model is not working well, they have a tough time making decisions, often with too many people at the table. In addition, it is difficult to get others to buy into the firm when a good governance model is not in place.

Several years ago I began focusing on building strong governance models.  I found that that a firm can have a great strategy, but be incapable of implementing the strategy if the governance process is not working.  So, while my practice is focused on strategy, I help organizations improve their governance allowing them to successfully implement their strategy.

One of the biggest governance challenges in A/E firms is defining the roles and responsibilities of owners, board members, and management.  To address this I have developed a Governance Framework defining the five major areas of governance (financial, risk, strategy, leadership succession and ownership transition).  For each of these areas the shareholders have questions, the board has questions and management has questions to address.  When the governance model is working well each group understands their responsibility and accountability for each of the five areas.  The Governance Framework I have developed list the main questions each group should be asking in each area of governance.

To help firms improve their governance I have developed the Good Governance Workshop.  The workshop is typically held with the board of directors.  The key elements of the workshop are:

• Evaluation of the current governance process.  I have developed an assessment that is completed by board members and possibly shareholders in order to understand how the firm compares to the standards of good governance.  The assessment can be tailored to the firm's specific model.

• Telephone interviews with selected board members and shareholders to better understand the challenges facing the firm.
  

• Preparation of a report summarizing the results of the survey and a list of key issues identified and recommendations for improvement.

• Facilitation of a workshop with board members.  The workshop begins with a presentation on what good governance looks like in professional service firms.  Followed by a review of the firm's current governance process - based on the assessment and interviews. Finally, the team defines the vision for their governance process and the required action needed to achieve that vision.

• Documentation of the workshop is provided within two weeks of the retreat.

• Follow up phone calls to discuss implementation progress.

In addition to the workshop, I also can help you address specific governance issues, including:

• Bringing outside directors onto the board. To help firms maximize the benefit of an expanded board I provide guidelines for recruiting and integrating outside directors into your board.
• Board evaluations.  Shareholders are looking for transparency with the board of directors. One of the best ways to achieve this is through board evaluations.  These evaluations can be done as a self-assessment or I can provide an independent review which often makes for a meaningful assessment due to the anonymity of the responses and an outsiders view.
• Board development.  One of the challenges of boards in an A/E firm is that usually all of the board members work together on projects and management issues, but do not have a model for appropriate behaviors in the board room.  During board development retreats, the board discusses what content they should be covering and the challenges of having open and insightful discussions on the issues. These sessions often include defining the roles and responsibilities of committees.
  

Some recent engagements include:

• A family-owned design firm is transitioned to a broad-based ownership model with a fully functioning board made up of both internal, non-family members and outside directors.  The engagement included the development of governance guidelines and board training.  In addition, criteria were developed for selecting outside board members and potential candidates were evaluated. 

• A consulting engineering firm with nearly 800 employees and over 100 owners wanted to have a balanced scorecard to use in evaluating their board based on a framework of good governance. The engagement involved developing the board evaluation tool and creation of a process to integrate the evaluation into their existing performance evaluation system . 

• A design firm that had close to 20 owners and most 'sat at the table'.  The engagement involved creating an organizational structure that clearly separated owner roles, management roles and training of the shareholders group on good governance. 

• A 200 person firm on its second generation of leadership seeking to improve its governance model.  The engagement included a review of by-laws and governance guidelines to help build a stronger board and a better link between the board and shareholders.

• A founder's firm moving towards its first significant ownership transition.  The engagement included developing a framework for the new governance model including board membership, content of board meetings and communication with shareholders.

• Evaluation of the structure of the board and the process used to nominate board candidates.  By improving the nominations process the firm increased the relationship with shareholders and improved the way the board functions.

• A 1,000 person firm with over 100 owners wanted to take their governance process to the next level.  The Governance Assessment and Workshop provided the board with an opportunity to discuss the challenges facing the firm and the opportunities for improvement.  As a result of the workshop they implemented the changes and brought two outside directors to their board.