We base our work on a few essential principles, particularly
- A board exists to help lead a business better for the long-term benefit of its stakeholders, particularly but not only its shareholders
- Governance structures and processes need to be recognisable to shareholders, but that isn’t where to start – the primary objective is good outcomes
- The foundation of any board’s effectiveness is in having a commonly understood idea of what the role of the board is, and of the individual directors within it
- Behaviour is what matters most in achieving good outcomes. Structures and processes can help or hinder, but rarely determine, how well the board works towards good outcomes
- A good board should work in a way that increases the chances of good decisions being made
- A board which demonstrates ethical behaviour in its own work will stand a better chance of finding good behaviour in the organisation
In order to help us look systematically at how firms exercise good governance through an effective board, we have developed a model which covers the main elements, under the two headings of What The Board Does and How It Does It.