Governance as a team activity

“Good” corporate governance is a team activity and that “the team” incorporates the board and executive leadership team.

When does good governance lead to better performance?

Australian Institute of Company Directors, May 2015

4 in 1: An obvious theory of directorship

Donovan & Tunjic, June 2009

The Kay/Goldspink research recently released by the Australian Institute of Company Directors provides interesting insights on a range of governance issues. A key finding is that “good” corporate governance is a team activity and that “the team” incorporates the board and executive leadership team. This represents a change in the general approach that is adopted in exploring the topic of governance.

Based on their semi-structured interviews with 100 Chairs of Australian organisations, Kay/Goldspink stated:

Kay/Goldspink noted that this is not to deny the importance of monitoring and compliance, but to distinguish these activities from a broader, more comprehensive notion of what “good” governance is. They observed that, viewed as a decision-making unit, the board provides the reflective capacity for the executive in order to improve the quality of decision-making.

The concept of governance as a team activity was also discussed by Tunjic and Donovan in their article 4 in 1: An obvious theory of directorship. Their understanding of “team” is even broader. They stated:

The authors outlined some important questions that arise when there is a broader understanding of the “team” that performs the functions of directorship:

• What is the right size and structure of the “directorship team”?
  
• What is the right mix of skills and experience for all the roles to be filled on the “directorship team”?
• What are the right processes between the board and other members of the “team”?
• What is the right behaviour between the board and other members of the “team”?