In any organization, there are several critical business processes and governance process flow, the continuity of which determines the success of the company.
The Importance of Governance Process Flow in Decision-Making Process
The decision-making process of the boards is influenced by the behavioral characteristics of individual directors. Accordingly, we have developed a typology of directors based on their behavior. Naturally, directors with certain behaviors are typical of ideal, “functional councils,” such as the chairman-conductor, change agent, peacemaker, mentor, and debater. Other types of directors are found on “non-functional boards,” and we include the chairperson-trustee, controller, conformist, support group, and critic.
In order to properly arrange the structure, and to see the formats of the necessary regular meetings, it is of great importance to understand the main business processes currently in the organization. It is precisely how we correctly distribute roles and responsibilities that determines the structure that exists under the direct subordination of the head. In the course of developing a structure, we are interested in processes at the macro level, what large steps, functions they consist of, and not at the level of detailed steps.
However, since the financial results of a governance process flow are influenced by many external factors, neither effective nor ineffective management can be considered a necessary or sufficient condition for obtaining positive or negative results. In fact, most research on corporate governance has not found a causal relationship between the structure and form of the board and the financial success of a company. This also applies to this work, and we did not strive for such a thing. However, common sense dictates that these phenomena are interrelated, and this book provides ample evidence that studying the processes occurring in the board of directors can lead to the discovery of such a relationship.
5 Steps to Succeed in the Board of Directors Decision Making Process
What steps can help you to be successful at launching the board of directors decision making process:
- Bring all participants to a common understanding of knowledge management. For example, understanding it as a process with all the necessary tools and attributes.
- More emphasis on the use of knowledge than on its accumulation, storage, and management.
- Think of the launch of knowledge management as a change in the way people work and behave. Do not place your hopes solely on management technologies, even if they are advanced – experience has shown many times that people in such a project are immeasurably more important.
- Don’t neglect/follow through on all the organizational change steps that will inevitably need to be done.
- Pay due attention to the complexities of data collection. The reason, again, is in people – they speak less than they know, remember only what is needed in their activities, and cannot remember something at your command.
The governance process flow should exercise control over the corporate governance practice, which involves the analysis on a regular basis of the compliance of the corporate governance system in the company with the goals and objectives of the company, as well as the scale of its activities and the risks assumed. Based on the results of the assessment, the Board of Directors is recommended to formulate proposals aimed at improving corporate governance practices and, if necessary, introducing appropriate amendments to the charter and internal documents of the company. People become shareholders in the expectation that the value of their shares will grow, that they will be able to earn.