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03.08.2011 - 05:18PM

Category: Corporate Governance

Strategic Governance: Enabling Financial, Environmental and Social Sustainability

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Review by CSRwire Contributing Writer Elaine Cohen

By Hank Boerner and Mark W. Sickles

Publisher: Governance and Accountability Institute Inc. ISBN: 978-0-615-40829-3

Description

Strategic Governance provides a unique opportunity to reorient your thinking about what’s possible for your business. It introduces you to an enlightened, principle-based governance regime. If you transform this new way of thinking into effective action, you can achieve extraordinary results simply because the "new idea" driving your actions departs from conventional wisdom. For this reason, Strategic Governance book is also an opportunity to achieve sustainable competitive advantage.

Commentary

Any book which has "strategic" and "governance" in the title just has to be a hit these days. These buzzwords have a lot of influence on our daily lives because they go right to the heart of the way companies do business. In fact, for those who believe that governance is about how you select independent or non-executive directors to the Board, or how much they are paid, or even how many meetings they attend, Hans Boerner and Mark Sickles will enlighten. Boerner and Sickles are experienced business strategists and advisors to corporate directors, and for them this territory is well defined. Governance is about "aligning strategy, culture, leadership and risk management for sustained corporate performance and growth," according to Martin Coyne of Akamai Technologies, who is quoted on the book's back cover. Boerner and Sickles make the case for a global governance standard because "there has been far too little discipline and science applied to this critical function."

"Corporate governance," they say, "needs to be better governed, and the roles of directors, officers and mangers need to be transformed." This belief has led the authors to propose a "Universal Purpose of Corporate Governance" which can "integrate ethical, professional and industry values and standards into firm-level cultures that enable winning strategies, managing risk, meet the needs and expectations of the firm's stakeholders and fulfill the firm's responsibility for a sustainable world."

This approach has some high powered backing from Professor Mervyn King who is Chairman of the Board of the GRI and a prominent figure in the effort to expect greater accountability from corporations. The outcome of discussions involving Professor King and several other thought leaders is a list of ten principles of strategic governance. These principles relate to the alignment of the interests and efforts of stakeholders; the use of strategy to create sustainable competitive advantage; the practice of robust risk management; and the careful cultivation of the relationships between Boards, governance, shareholders and management. What may be new to some is the strong emphasis placed on organizational culture and design as fundamental Board responsibilities. Given that leadership and organizational design are key sources of sustainable competitive advantage, the Board cannot afford to ignore them. Visionary leader Livio DeSimone, former Chairman and CEO of 3M, provides an example. DeSimone created a culture of innovation which has become the engine of 3M's success over the years.

Strategic Governance is a refreshingly short book, which makes it a stimulating weekend read. It is only 105 pages, if you include the governance self-assessment questionnaire and a range of governance-related quotations included as appendices. Its message is clear: governance is about the integration and alignment of what the business wants to achieve and the way it will achieve it. The right organizational design, culture, and behaviors set the foundation for how business goals are achieved. The Board of Directors is responsible for applying a clear set of principles to ensure that this takes place. If it does, the business will realize what the authors describe as a "breakthrough opportunity."

Hank Boerner is Chairman and CEO of Governance & Accountability Institute, a research, news monitoring, and strategic advisory firm. Mark W. Sickles is an organizational architect, advisor to corporate directors and executives, and creator of the Shareholder Value Assurance (SVA) methodology. Boerner and Sickles' credentials lend an air of authority to Strategic Governance. While we do not need Boerner and Sickles to tell us how critically important governance is, their advice on how to make it work is well worth reading.

About Elaine Cohen

Elaine Cohen is a Sustainability Consultant and Reporter at Beyond Business and blogger on sustainability reporting and author of: CSR for HR: A necessary business partnership to advance responsible business practices.

For more information on Strategic Governance and options to purchase, please visit CSRwire's Books Page.

This commentary is written by a valued member of the CSRwire contributing writers' community and expresses this author's views alone.

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