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.

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