With the multitude of publications on corporate governance, it is interesting to read BS13500 the code of practice for delivering effective governance. As a code of practice, it is not a full British Standard of specification, such as ISO9001 2015 etc.
But it really is a good document and provides a framework for establishing good governance arrangements within any organisation – irrespective of size. The code of practice discusses how an effective governance system is created, followed by the principles that underpin an effective governance platform such as; such as shareholders and various interested parties. Clear accountability structures are discussed, this might be determined within the founding documents or memorandum of articles of association.
The code of practice discusses the need to address the long-term interests of its shareholders or interested parties. Both need adequate definition again this is ideally captured within founding documentation.
The governance code then outlines how such a programme should be implemented. Including identification of stakeholders. Many organisations that I visit have business plans, but these often negate the stakeholders and interested parties. Fail to identify these and to prioritise can render the documented business plan obsolete, if circumstances hitherto non-defined suddenly change.
The code of practice continues in major pillars covering; accountability, direction and control.
So why consider BS13500? Many organisations face enhanced regulatory supervision and good governance is a way of alleviating but outcomes. Such instances include the banking sector. If certain large financial institutions had embraced better governance, maybe by adopting and benchmarking to BS13500 then possibly some of the more significant failures may have been reduced.
In my experience, many CEO’s and managing directors, have considerable experience of their duties under the Companies Act, but do not consider sound corporate governance in a holistic or structured manner. Indeed, the topic may be deemed ephemeral and thus there are no touch points. I worked with one company, when the topic of effective governance emerged the owner replied: this happens automatically at board meetings!
In my view BS13500 is a vital toolkit that organisations should use as a benchmark to assess their governance arrangements.
I have further developed this code and created an in-depth audit tool to create a ‘RAG’ report to identify areas of strength and weakness.
Marcus Allen has twenty years’ experience as a management consultant. He has worked with over a hundred and fifty organisations on compliance / governance frameworks, covering both regulated and non-regulated arenas. Marcus holds a Master’s degree in Management Learning and Change from the University of Bristol and the highly respected Diploma in Governance Risk and Compliance from the ICA. He is a Fellow of the Chartered Management Institute and Fellow of the Institute of Consultants.