Organizational Excellence Framework-Governance

GOVERNANCE
This is an introductory course on governance
Participants will learn about best management practices related to the topic and have an opportunity to self-assess against the practices and develop an improvement plan to address gaps.
Note to Facilitator
This workshop is part of a consulting toolkit that includes:
•Organizational Excellence Framework publication downloadable at no charge at http://organizationalexcellencespecialists.ca/
•Games – to illustrate the current state versus future state for the organization
•Holistic workshops for micro size (1-25 employees) and larger size organizations (small 26-100, medium 101-999, large 1000+)
•Modular workshops for each key management area: governance, leadership, planning, customers, employees, work processes, suppliers and partners, resource management, continuous improvement & performance measurement)
•Specialty workshop – combined OEF and ISO 9001
•Addendum materials – to customize workshops (e.g. video clips, pictures, quotes, success stories, best in class examples, hands on exercises
•Automated assessments – online assessments that provide a report for the client (automatic) or consultant (editable) that includes a description of the process, the respondent ratings and an action-oriented improvement plan
Professionals can purchase the materials only or acquire the materials by attending an online or in-person workshop.
A train-the-trainer program is available for professionals that wish to become Registered or Certified with the Organizational Excellence Specialists consortium that enjoys other benefits of participation. Contact the Principal and Author, Dawn Ringrose, via the ‘Contact Us’ tab at http://organizationalexcellencespecialists.ca/ to learn more.
1

What is Governance?
4
Icebreaker Exercise - this is a good way to get people engaged at the start of a workshop.
Ask the question to the group, What is governance?
Once everyone has contributed their thoughts, do a round table and capture key points on a
flip chart. Compare the group definition to the definition on the next slide.
4
This document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/oef-workshop-governance-module-1417

Organizational
Excellence Framework
7
High level introduction of the OEF
•Published in 2010 by Dawn Ringrose
•Based on leading excellence frameworks
•Grounded in 20+ years of research that validates the positive relationship between
implementing an excellence framework and improving organizational performance
•Applicable to any size and type of organization
•Comprised of principles and best management practices used by high performing
organizations
•Unique in that it includes ‘implementation guidelines’ for the practitioner
7

Key Management Areas
1. Governance
2. Leadership
3. Planning
4. Customers
5. Employees
6. Work Processes
7. Suppliers and Partners
8. Resource Management
9. Continuous Improvement & Performance
Measurement
10
Best management practices fall into key management areas that are typical of most
organizations.
The OEF matches practices within each key management to size of organization (micro, small,
medium, large) – Appendix 1:
1.Governance ‐ identifying governance responsibility to stakeholders, implementing an
effective governance system and acting as a model of good practice to internal and external
stakeholders.
2.Leadership – creating a culture committed to excellence, developing a strategic plan and
communicating it to stakeholders, sharing responsibility and accountability throughout the
organization, communicating openly about organizational performance, and removing barriers
to organizational effectiveness.
3.Planning – creating a business plan that aligns with strategic direction, communicating the
plan to stakeholders, allocating resources to ensure effective implementation, monitoring and
reviewing the plan regularly and making changes as required.
4.Customers – understanding the customer, aligning employees on the importance of the
customer, making it easy for the customer to do business and provide feedback, and
reaffirming the organization’s presence and approach in the marketplace.
5.Employees – undertaking human resource planning that supports organizational plans,
recruiting, selecting, training, and developing employees, encouraging employees to share
suggestions and ideas aimed at improvement, rewarding and recognizing strong performance
of individuals and teams, and ensuring a healthy workplace environment.
6.Work Processes – designing, documenting, and managing work processes, analyzing and
improving work processes, taking corrective action when problems occur, preventing
recurrence of problems by making changes to work processes, and using benchmarking to
evaluate performance.
7.Suppliers and Partners ‐ using criteria to select suppliers and partners, developing win‐win 10

Example - Adapted from Board of Directors Manual of an Ontario Children’s Aid Society
(Canada)
The following governance policies outline the legislative and legal jurisdiction for the agency
and the duties, roles and responsibilities of the various groups and individuals within the
agency’s governance structure. This model reflects what the Board of Directors has determined
will serve the agency best at this time. These policies will be reviewed at a minimum every
three years to determine if adjustments are required to respond to the changing needs of the
agency.
Governance Cycle
The agency has adopted the following governance cycle. All governance policies must
incorporate each of the stages of this cycle and apply at various scales within the agency:
•the agency as a whole (e.g. in strategic planning and policy development)
•specific programs (program development and evaluation)
•financial planning (budget development and approval)
•specific projects or activities
The cycle is comprised of the following stages and a breakdown in any of these stages
undermines the agency’s governance and accountability:
•Leadership/Direction – leadership is exercised in determining how the organization is meeting
the Mission, actualizing the Values and achieving outcomes through a collaborative process of
consultation. It is seldom the case that the various sources of input will be in total agreement
and the agency makes choices in setting its direction. These choices are to be guided by the
agency’s vision, mission and values. The final decisions regarding these choices are the
responsibility of the Board of Directors who are accountable to the community and any other
stakeholders.
13

Independent Structure
• In exercising its role and responsibility in representing
stakeholder interests without being encumbered by
senior management
• In developing a set of governance policies that provide
the framework for advancing the Mission-Vision of the
organization
• In appointing Directors and having a majority of
external and unconnected Directors
• In reviewing financial stewardship with a audit
committee chaired by an independent external Director
• In reviewing the performance of the CEO
In order to serve the organization, the Board must have a clear understanding of the
differences in its role and that of the Agency staff and the need to operate as a partnership
with distinct and complementary roles. The role of the Board is to set direction, monitor
implementation and evaluate the results achieved. A fundamental part of this relationship is
that the Executive Director is the sole employee of the Board and that the Board affects the
direction, plans and actions of the Agency through the Executive Director.
Board members refrain from attempting to direct the work of Agency staff members:
•The Board relies on the ability, training, expertise and experience of management and staff to
plan for and to provide services within the Agency’s mandate.
•To complement this, the role of management is to:
− bring forward information and recommendations to the Board as support for their
decision‐making without undue influence
− implement the directions established in the most effective and efficient manner (i.e.
full responsibility for the management and operational aspects of the agency’s
work)
− provide ongoing reports on implementation to enable the Board to monitor the
achievement of the intended results
Authority to Act:
•The agency’s governance model call for delegation to management in a manner that provides
them with a range of freedom to exercise their creativity and judgment to achieve the goals
established in a manner that is consistent with the agency’s policies and guidelines.
•The Board gives the Executive Director the authority and responsibility to lead and manage
consistent with agreed Board policies, with strategic and operational plans and approved
budgets.
16

Director Roles & Responsibilities
• Duties: care, honesty, obedience, diligence and good
faith, exercise power, loyalty, avoid conflict of
interest, confidence, continue
• Roles and responsibilities: leadership & mission,
accountability, community outreach & advocacy,
monitoring & evaluation, employment of Executive
Director, human resources, authority
The roles and responsibilities of the Directors of the Board.
Each member of the Board of Directors has the following duties:
•Duty of Care ‐ Directors must exercise reasonableness and prudence in carrying out their
duties.
• Duty to Act Honestly ‐ Directors must deal honestly with the corporation; directors must not
act fraudulently.
• Duty of Obedience ‐ Directors must comply with all applicable legislation and the
corporation’s governing documents (ex: letters patent, by‐laws) and ensure that corporate
decisions are implemented.
• Duty of Diligence and Good Faith ‐ Directors must be diligent in carrying out their duties by
being familiar with the corporation’s operations to ensure compliance with applicable
legislation and governing documents. Directors must regularly attend, and participate, at board
meetings and review minutes of meetings. Where advice of a specialized nature is required by
the corporation, directors must obtain the services of qualified professionals.
•Duty to Exercise Power ‐ Directors are responsible for the effective operations of the
corporation in its pursuit of established goals and objectives. In order to justify accounts and
decisions, Directors must properly maintain books, records, documents, and minutes of the
corporation. Certain responsibilities and authority can be delegated to management, staff, and
volunteers but the Directors must supervise such delegation.
•Duty of Loyalty ‐ A Director’s sole interest is the corporation and the interests of the Director
must not be placed in conflict with those of the corporation.
•Duty to Avoid Conflict of Interest ‐ Directors must declare, and avoid, any conflicts of interest
or anything that gives the appearance of a personal benefit. Where a conflict of interest arises,
it must be declared and the director must not participate in any discussion or vote.
•Duty of Confidence ‐ Directors must not disclose confidential information regarding the
corporation to outside parties.
19

Strategic
Planning
Operational
Planning
Organizational Values
Guiding Principles
Vision/Aspiration Statement
Long Term Goals
Mission
How to achieve the Vision
Key Strategies
Actions to be taken to achieve
the future statement
Strategic Goals
Result(s) to be achieved by end
of the plan period
Objectives
SMART objectives to achieve
the envisioned future
Activities/Tactics
Actions to implement
strategic initiatives and
achieve objectives
Board
Executive Management
ENDS MEANS
Example - Strategic Planning
[1] Adapted from Nathan Garber & Associates http://garberconsulting.com
This is an example of how the Board takes a lead role in developing the strategic plan for the
organization.
The essential point is to understand the concept of Ends which is a Board role and Means
which is the role of the senior management.
22

Consensus Decision Making
• Consensus is achieved when the Board reaches a
decision that everyone understands, can support and
is willing to implement
• Board members must understand the strategic and
cost impacts of decisions
• Provision must be made for handling dissenting
views
Speak about decision-making – by consensus
The Board seeks to achieve consensus wherever possible and formalizes its decisions through formal
motions to ensure clarity of decisions. When a consensus cannot be achieved a majority vote is utilized.
To support a consensus decision model the Board and Executive Director work to ensure that
information is provided in a timely manner before decisions are required so that Board members have
time to consider the issues:
•information is to be provided in advance of a meeting when a decision is required
•there is adequate discussion of the issues with all members having the opportunity and taking their
responsibility to participate in the discussion
•the issues and concerns of all constituents relevant to the decision are identified
•decisions are well informed:
• the Board seeks to ensure that a diversity of perspectives are considered
• if additional information is required the decision will be deferred (if possible) until it is
obtained
• all Board members support the decision in public providing a positive description of the
decision and its rationale
In cases where a Director holds a dissenting view, the Board will make note of the concerns expressed,
and monitor them in the implementation of the decision. While it is acceptable for the individual
Director to identify his reservations, he is required to support the decision taken and provide a positive
description of the decisions.
25

Example - Governance Manual
• Prepare a table of contents for the governance
manual
• Gather information for each section of the manual,
including process maps
• Create a governance committee to review the draft
manual
• On the basis of the review, update the manual
• Make the manual available to all stakeholders
Refer to contents of Governance Manual in OEF publication
Review important points:
•Include a description of the governance structure in the Governance manual:
Legislation or authority under which the governing body operates (e.g. Provincial statute,
government regulation, etc)
•By‐laws that guide the organization
•Relationship with CEO/CAO including policies on executive limitations (what authorities and
limits are place on the CEO/CAO)
Develop a governance orientation program to orient all new members to the roles and
responsibilities including the fiduciary and legal responsibilities
Develop a formal Governance training program to ensure that all members are provided with
best practices in governance training
28

Examples – Vodaphone,
ASB Bank, Air New Zealand
VODAFONE
•Finalist in the Kensington Swan Responsible Governance Award and its predecessor category
six times since 2001. Won award in 2000 & 2001. Also a finalist in the Top 200 Business Ethics
Award in 2001. Judges said Vodafone provides New Zealand's "benchmark of best practice"
when it comes to responsible governance.
•The company's commitment to responsible governance is total and global.
•"founding ethical principles are enshrined within Business Principles which are set within the
Vodafone Code of Conduct". This code explains how employees should apply the principles in
practice. The Code and the Principles are both global Vodafone policies.
•Vodafone's documentation, communication and implementation of organisation‐wide
performance standards are rigorously led and managed.
•The company operates an externally facilitated whistle‐blower programme called "Speak Up",
which is coupled with a Duty to Report Policy that is included under its Code of Conduct. Speak
Up is anonymous and widely promoted via the company's global internal audit team.
•Group publishes a global sustainability report which is supplemented by local operating
market reports.
•Approach to dealing with cybersafety and txt bullying combined commercial decision‐making
with a fine balance between precompetitive issues and taking an opportunity to differentiate 31

Exercise – Communication Plan
• Divide in small teams
• Develop a plan to communicate key messages
to the community
• Identify a measurement method to gauge the
success of communications
Conduct the exercise to develop a communication plan
•Divide in small teams
•Develop a plan to communicate key messages to the community (e.g. meetings, newsletters,
email, website, public consultations, annual report)
•Identify a measurement method to gauge the success of communications (e.g. phone calls,
web comments, publicity, surveys)
34

Governance Measures
• Key management area:
− Stakeholder understanding of governance
• Organization:
− Community perception of organizational governance
37
Discuss governance measures
37

Continual Improvement
The key value of governance measurement lies
in the changes and improvements that are made
as a result of the information gathered
40
Review the PDSA process
•Ask the same governance questions each year
•Benchmark an organizations performance against its history and objectives
•Use the results of surveys to identify areas for improvement
•Develop an action plan to address performance gaps
•Request, evaluate and act on stakeholder recommendations for improvement
•Communicate and execute the plan and hold people accountable for results
•Set specific measures for each performance objective
•Insist on regular implementation updates
•Publicize the fact that results will be measured and reported on and that those involved will
be held accountable for results
40

Exercise – Round Table
Each participant share one action plan with the
larger group
43
Ask participants to share their most important action plan
43

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