Leading change? Consider a governance review
Out of the many tools that help organizations navigate growth and change, a governance review has a high ROI. Whether you’re a business trying to navigate a complex regulatory landscape or a not-for-profit aiming to streamline decision-making, a governance review provides a compass to guide you through the fog, ensuring you stay on course towards your goals.
First, what’s the problem you need to solve?
Imagine this: your business or charity is experiencing decision-making bottlenecks left and right. You're juggling conflicting priorities, struggling to adapt to changing regulations, and sensing a disconnect between your organizational goals and your board's direction. Sometimes you’re even tripping over basic questions like “who needs to approve this decision?” Sound familiar? Well, a governance review could be the beacon of light you need in this storm. By delving deep into your governance structures, policies, and practices, a well-crafted review can untangle these knots and pave the way for smoother, more efficient operations.
In the realm of effective organizational management, governance reviews stand as essential tools that ensure transparency, accountability, and sustainability. And you have options to produce the right roadmap to achieve these aims.
What are my options for a governance review?
For businesses and charities alike, understanding the nuances of governance reviews can help you choose the right one for enhanced operations and long-term success.
A governance review serves as a strategic assessment of an organization's decision-making processes, structures, and overall effectiveness in achieving its goals. It acts as a compass, guiding entities towards best practices, compliance, and optimal performance.
Let’s briefly look at several models for governance reviews. These aren’t set in stone, and in fact most reviews that I provide are some combination of these models. But they will give you a picture of the different ways a governance review can serve various business scenarios and achieve the objective you need.
1. Compliance-Oriented Governance Review
In the business world, picture a company struggling with outdated governance policies that no longer serve its need to ensure that investors, customers and regulatory bodies are all satisfied in an evolving business landscape. A compliance-oriented review could help everyone get on the same page with your new situation, identify gaps, and revamp these policies to ensure legal adherence and operational efficiency.
Your objective: Ensuring adherence to regulatory frameworks and legal requirements.
Who needs it: Ideal for organizations facing legal scrutiny, significant regulatory changes, or those aiming to mitigate compliance risks.
Costs: Average costs range from $5,000 to $15,000, depending on the complexity and scale of the organization.
This kind of review can take about a month, and usually includes the following steps:
Conduct a thorough review of existing policies, bylaws, and governance documents.
Identify gaps between current practices and regulatory standards, and recommendations to address them.
Outline a plan to make necessary changes to align with legal requirements.
Develop a monitoring framework to ensure ongoing compliance.
2. Performance-Focused Governance Review
Or consider the case of an organization where decision-making structures are strained and communication channels are clogged. A performance-focused governance review could analyze these pain points and offer tailored solutions to enhance workflow, boost productivity, and foster a culture of transparency. In essence, whether it's resolving conflicts, updating outdated practices, or streamlining operations, a governance review acts as a trusted ally in the journey towards organizational excellence.
Your objective: Enhancing organizational clarity, efficiency, effectiveness, and goal attainment.
Who needs it: Recommended for entities experiencing operational challenges, inefficiencies, or seeking to optimize performance.
Costs: Average costs vary from $10,000 to $25,000, based on the scope and depth of the review.
This kind of review can take about two to three months, and may include the following steps:
Review relevant governance statues and bylaws to identify any significant gaps, inconsistencies and/or overlaps in existing governance policies and processes.
Collect and analyze performance data, including key metrics and KPIs, and assess how decisions are currently made in terms of clarity and efficiency.
Engage with stakeholders to gather feedback on perceptions of current governance practices.
Evaluate decision-making processes, roles and responsibilities, competencies and structures. Develop options and recommendations.
Facilitate workshop with board and employees to present the results of the initial evaluation; often this workshop is an opportunity to clarify the differences between Board and Operational responsibilities, and differences between policy and processes.
Develop options and recommendations, including drafting or updating core governance policies that form the foundation of good governance practices within organizations, promoting transparency, accountability, and ethical behavior. These may include some or all of the following:
Governance Structure and Decision-Making Policy
Code of Ethics and Conduct Policy (may include Conflict of Interest or Whistleblower clauses, if required)
Board Roles and Responsibilities Policy
Financial Management and Controls Policy
Risk Management Policy
ESG policy or Sustainability Policy
Diversity and Inclusion Policy
Board Meeting Procedures Policy
Records Retention and Document Management Policy
Succession Planning Policy
Develop recommendations for creating or updating committee Terms of Reference (TOR) to align with the current organizational context. Draft these TOR for the organization, as required.
3. Strategic Governance Review
Another real-world scenario: a charity grappling with internal conflicts among board members, hindering critical decision-making. Everyone means well, but are hampered by lack of consensus about vision, roles and which competencies are needed to serve those roles. A strategic governance review here could uncover underlying issues, facilitate candid discussions, and realign the board's focus towards the organization's mission.
Your objective: Aligning governance structures with long-term organizational vision and goals.
Who needs it: Suited for organizations undergoing significant transformations, strategic shifts, or seeking to enhance long-term sustainability. This approach combines a strategic planning process with a governance review or update.
Costs: Average costs typically range from $30,000 to $50,000, considering the strategic nature and complexity of the review.
This approach can take four to six months, and may include the following steps:
Conduct a comprehensive review of the organization's mission, vision, and strategic objectives.
Assess board composition, dynamics, and alignment with strategic goals.
Facilitate scenario planning exercises to envision future challenges and opportunities.
Workshop the initial findings to develop clarity between governance and operations (as above).
Design a strategic governance roadmap with actionable steps for implementation.
Update policies and terms of reference (as above).
Update board competencies, board recruitment criteria and roles that will support good governance and efficiency in your context.
Set up annual planning and organizational and board review processes.
I’m interested. What are my first steps?
As you can tell, each governance review approach offers a specific focus to evaluate governance practices and help your organization navigate challenges, capitalize on opportunities, and build resilient foundations for the future. They require different levels of participation and buy-in so results can be put into action. It’s important to agree on the objectives and priorities for a review with your decision-makers. As a starting point for discussion, sharing this article may be helpful!
Ultimately, all governance practices require agreement on expectations about the parameters of authority and responsibility. This topic is difficult to negotiate well internally, which is why organizations usually engage a qualified and objective consultant to conduct the review. A consultant can tailor governance reviews to your specific objectives and organizational contexts to drive positive change, foster innovation, and achieve sustainable growth. Whatever approach you choose, it will require close teamwork between the consultant, employees and board directors.
If you think your organization would benefit from a governance review, contact GrowthPoints today for a complimentary consult. We’ll help you consider your options and find the approach that will work best for you.