The over-riding challenge now for Boards, Advisors and leaders is how to operate successfully in an increasingly complex and chaotic market environment with multi-stakeholder interdependencies. Stakeholders, having now found their role and voice, will clearly assert their right (recognised formally or otherwise) to be acknowledged, heard, and respected as a genuine contributor to the governance of their organisation. Clearly ignored in the past, today their voices cannot be silenced.
A more holistic view of what occurs, even at the ground level, has emerged. In turn, the role of governance is now seen as a potential positive contributor to an individual’s health, as well as a community’s and society’s health. Still, governance is not such a simple issue. As acknowledged by Harvard Business Review in a corporate governance article “A Guide to the Big Ideas and Debates in Corporate Governance” by Lynn S. Paine and Suraj Srinivasan dated October 14, 2019, when commenting:
“Corporate governance has become a topic of broad public interest … Yet ideas about how corporations should be governed vary widely.”
Knowing that governance matters and that it is a force for good, stakeholders need to demand that their organisation prioritises effective governance. The FRC’s Chief Executive, Sir Jon Thompson highlighted the trap many organisations fall into when focussing on governance: “Concentrating on achieving box-ticking compliance, at the expense of effective governance and reporting, is paying lip service to the spirit of the Code and does a disservice to the interests of shareholders and wider stakeholders, including the public.” “Too many companies substituted what appeared to be a slogan or marketing line for their purpose ….. and its importance in relation to culture and strategy, nor have they sufficiently considered the views of stakeholders in their purpose statements.”