Achieving effective board performance
+44 (0) 20 7764 0721
>
>

Case Study - Finding time for Strategy

The Problem

An Insurance Company asked us 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 comprised:

  • 3 Non-Executive Directors who represented an overseas parent company and were based overseas.
  • 4 Independent Non-Executives one of whom was the Chairman
  • 4 Executive Directors including the CEO, FD, CRO and CUO

The solution

We proposed a four stage review:- 

Stage 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

Stage 2: A questionnaire to highlight any areas of concern and open up thinking in preparation for interviews

Stage 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 too

Stage 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 level.

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 with 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 that nobody trusted anybody. 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 time. 

The results

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. One year on, 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.

If you think we can help you with your Board reporting please email info@bpandeglobal.com or call +44 (0) 20 7764 0721

BP&E Global – Board Performance and Effectiveness

BP&E Global Ltd, 1 Cornhill, London, EC3V 3ND, Tel: +44 (0) 20 7764 0721, Registered No. 07978879 VAT Registered No. 194 5352 85. All users should read the Terms & Conditions and Privacy Policy. Registered address 8 High Street, Heathfield, East Sussex TN21 8LS. Whilst there has been reasonable effort to check accuracy of material, BP&E Global Ltd cannot be held responsible for any inaccuracy or omission.

:   Website Design By Zarr