Finding time for Strategy
An Insurance Company asked BP&E Global to undertake a
Board Governance and Effectiveness Review. The purpose was largely to check the
lines between governance/oversight by the Board and delegation/accountability
of management. The regulators had shown concerns.
The Board was comprised of:
3 Non-Executive Directors who represented
an overseas parent company and were based overseas.
- 4 Independent Non-Executives one of whom
was the Chair
- 4 Executive Directors including the CEO,
FD, CRO and CUO
We proposed a four-stage review:
1: Desk based research to check the
governance structure, the reality of what was happening and how this was
recorded and what the company needed going forward
2: A questionnaire to highlight any
areas of concern and open up thinking in preparation for interviews
3: Individual interviews to explore
concerns, understand more on the day to day realities of delegation and
empowerment, with a view to establish potential remedies
4: Board and Committees’ Observation
to see the Board and Committees in action. The desk based research showed that
the governance was strong in this organisation, however there was no separate
Board Terms of Reference and the Matters Reserved for the Board were very high
The agenda was very detailed with much of what had been
dealt with at committees resurfacing in just as much detail in Board papers.
The minutes conveyed duplicate conversations to those of committees. The questionnaire
showed that there was satisfaction with how collegiate the Board was, but
frustration at agenda content.
In the interviews the Board members expressed their
frustration at the lack of agenda time to cover strategy and risk items and
complained at how much ‘tick-boxing’ went on at the Board. These points were
borne out by the Board and committee observation. We also observed completely
duplicate discussions at committees.
We recommended that only highlights from committees were
escalated and that a written report from each committee chairman was provided
to the Board. We also suggested the setting up of a governance and
compliance committee to undertake the more detailed governance/compliance work
and appropriate escalation/accountability back to the Board.
We also recommended that all of the terms of reference be
reviewed as some items could easily be dealt with by management without the
Board, and other items could be dealt with just by the appropriate Board
committee. There was also duplication between committees. It wasn’t a lack of
trust, it was that everyone was so interested in the business that they wanted
to be involved in everything, and then got frustrated about the lack of
The Board agreed to our recommendations and subsequently
asked us to be involved in a delegation/accountability project where we
reviewed all of the Terms of Reference against regulatory requirements and the
firm’s business model and strategy, recommended what should sit where, helped
set up the new committee and set up the appropriate structure to empower people
lower down the organisation.
The regulators accepted that it was not about trust but more
about excessive involvement and were comfortable with our proposals. Since
completing their work with BP&E Global, the Board has more time to review
strategic initiatives, high level risks and oversee the business. The executive
feel more empowered as do those below them and the accountability framework is
functioning well. The hardest part we were told was to let go of old habits and
the yearning to be involved in what they loved at a detailed level.
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