It’s the day after Governance 2024 – and the UK general election − there’s a lot to reflect on from both events. The conference provided practical tips that can impact practice straight away as well as longer-term food for thought. Over the coming weeks, we will share more articles and blogs delving into the individual sessions, but for now, here are ten top takeaways:
- AI is coming, but it’s not coming for your job.
AI will enhance the governance function and the way organisations operate, but – for the time being at least – it’s a tool to support rather than replace teams. That being said, George Honiball warned that individuals won’t be replaced by technology, they’ll be replaced by those who know how to use it. Upskill yourself and your board with our ongoing AI Webinar Series. - Risk and internal control are high on the agenda.
In the wake of years of volatility and with the UK Corporate Governance Code 2024 coming into effect next year, it’s more important than ever for companies to navigate risks effectively. This goes beyond risk registers and heatmaps – useful as they may be. To engage the board, begin the discussion by looking at strategic aims and what could be standing in the way of achieving your goals. Read more about risk management from Governance and Compliance. - Boards can’t do it all.
The range and complexity of areas that the board is expected to oversee seem to be growing and growing. Boards are at or beyond capacity. In some cases, this could be the result of a decision-making doom loop, where the board doesn’t have sufficient trust in management to delegate decisions and so everything ends up getting escalated. A workforce that can apply critical thinking, communicate clearly and remain focused on the organisation’s strategy will foster board confidence in the executive. This will free up the board to hand over operational decisions so they can apply themselves to the top-level, strategic decisions which they are there to make. - Communication is king.
Transparent communication – particularly in times of crisis − is essential to building trust, both within the organisation and with external audiences and consumers. It’s not enough simply to talk about organisational values; organisations must enact their values to remain credible and retain their reputation, even when things go wrong. - Data only adds value if you can apply it.
Organisations hold vast amounts of data, but it’s often stored in siloed systems that don’t talk to one another meaning it can’t be used to its full potential. Building a data governance framework can bring technology, people and processes together. - Take a systematic approach to non-financial reporting.
Taking a structured view of incoming non-financial reporting requirements in the UK and Europe can help to prioritise your organisation’s approach. Organisational structure may affect how companies report – either at group or entity level. While these issues sit at board level for many, others have chosen to establish ESG or sustainability committees. Those who have or are considering a dedicated committee might want to review our Sustainability Committee Terms of Reference. - Influence isn’t about telling people what to do.
You don’t need to be loud to be influential. Lean in to your strengths and communication style to build influence in your organisation. This could be through building deep relationships, keeping an eye on the bigger picture, providing trusted advice or promoting strategic intent. - Good charity governance can help the sector rise to its challenges.
Updates to the Charity Governance Code come at a time when the sector is stretched. Ongoing challenges around trustee recruitment and funding security continue, with fresh pressures to take action on the climate, AI and diversity. The most successful charities are led by trustees who are keenly aware of what governance – and effective reporting – can achieve for their organisation’s purposes and in bolstering support from its stakeholders. - The board you want to join already has a company secretary; position yourself differently to avoid duplication.
Governance professionals who want to make the transition to become NEDs need to reflect carefully on their experience. Think about the skills the board needs and the challenges they’re facing to which you could contribute. Create a separate NED CV which focuses on in-demand or sector-specific experience in areas such as technology, regulation or organisational transformation. - All sectors need to work hard to rebuild trust.
If organisations want to regain public trust going forward, they will need to demonstrate connection, openness, competence, fairness and integrity, as our keynote speaker Mark Easton argued. Successfully rebuilding trust depends on ambition from the top – and is closely tied to boards’ role in creating an ethical culture throughout all levels of their organisations. And with the election result now in, time will tell if the new Labour government can deliver on rebuilding the governance holes in our government and public services.
The Institute is calling on the new government to incorporate effective governance practices to improve decision-making and delivery, essential if it is to be successful at building trust with the electorate. The Institute is ready to work with incoming Ministers and our policy Manifesto for Better Governance outlines our key asks.
These are just a few of the messages that were highlighted across the event. We would love to know what you took from the two days of panels, sessions and talks. Share your thoughts on social media using the hashtag #governance2024, keep an eye out for more insights on the CGIUKI blog and in G+C and make sure to join us at next year’s Annual Conference!
