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Governance structures often evolve without a coherent plan, expanding like topsy as new elements are bolted on to meet changing requirements. Is it really the best it could be for your business? Maybe it's time to consider a governance structure review?
Regulators often challenge the quality of governance of firms when they are advised of new structures, appointments or following a visit or negative issue to emerge from the company. What would you do if this happened to you? What are you doing if the question has already been asked of you?
The real benefits to be gained from a Governance Structure Review are:
A rational, up to date and consistent framework of governance that supports the business for the future
A process that ensures it remains up to date and keeps pace with the the development of the business
Procedures that ensure the appropriate frequency of meetings for the Board and its Committees
A model for the timely and relevant provision of board packs
In essence, what all Boards should have.
Scope of a governance structure review
What should you look at if the regulators or your shareholders question your governance structure? The question will have arisen in connection with your structure compared to that suggested by the UK Corporate Governance Code. As a result of regulatory intervention you'll be required to go beyond the letter of the Code; you'll need to justify why your governance is the way it is and why it is best suited to your business. Your review will need to cover:
- What structure is currently in place
- Whether it's fully documented and that matches the reality
- Roles and responsibilities
- Reporting lines
- Membership of Board and Committees
- Why you are deviating from best practice
- Updating your Board Control Manual and any other documentation
If you undertake this review yourself it is possible that you will only see what you are expecting to see. An external facilitator is of particular use and may be a regulatory requirement in reviewing your governance against regulatory expectations and best practice. Having been regulators ourselves and conducted many reviews and evaluations we have seen countless examples of good and bad practice and are able to advise you on what may suit your company best.
How we work
We conduct our reviews normally in three phases:
Phase 1: Desk review of all of the board standards and procedures, for example, Board terms of reference, job descriptions etc.
Phase 2: How governance works in practice, through interviews and board observation
Phase 3: Governance recommendations and next steps, reporting to the board and assisting in remedial action
Much as we would in a Board Evaluation (as required by the UK Corporate Governance Code) we assess:
Our approach to our support of Boards is designed to meet with key Principles for Business and all regulatory requirements.
If you'd like to discuss your requirements for a Governance Review with us, please contact us now...
BP&E Global - because Board Performance Matters