Alexa Bailey and Alain Deniau (Heidrick & Struggles) held this presentation at the SME Assembly 2014 at Naples, Italy on "Dynamic Governance".
Find out more at: http://blogs.ec.europa.eu/promotingenterprise/
1. Heidrick & Struggles
DYNAMIC GOVERNANCE
Alexa Bailey & Alain Deniau CEO & Board
Practice
October 2014
2. We Partner across the Talent Cycle – Leadership Advisory
Leadership
Search
Identifying, Recruiting and Hiring Succession Planning
Promotion and Rotation
Onboarding and
Integration
Talent Cycle
Continuous Learning and Development Engaging and Retaining
Leadership
Consulting
3. How we foster and help to lead Board debate and
development
4. The Next Horizon for High Performing Companies
The European Corporate Governance Report 2014 sets out a new charter for the boardroom
based on:
• Detailed analysis of 400 of Europe’s largest listed companies conducted biennially since
1999
• A board effectiveness survey completed by 236 European board members
• Heidrick’s 60-year track record of working with high performing boards
The research identifies six key characteristics that define a new spirit of agile and responsive
governance rooted in board leadership:
1. Deep Business Knowledge
2. Diversity of Thought
3. Engaged Leadership
4. Strategic Alignment & Execution
5. Capacity to Adapt
6. Leadership Talent
When combined these lead to Dynamic Governance
5. Deep Business Knowledge
Curiosity is a prerequisite – inspect don’t expect
Any debate is only as good as the quality of the information and knowledge at
work. Chairmen and boards must possess deep insights into the business.
6. Diversity of Thought
Diversity must be rooted in meritocracy and the attainment of
business goals. The needs of the business drive diversity.
“The selection of the right people
for the board is increasingly critical.
Diversity of thought is the key.”
7. Engaged Leadership
The modern chairman requires an “all-court game”
The job of the chairman is to manage the balance of skills,
knowledge and experience on the board, and to
constructively challenge management and the
non-executive directors to drive outstanding
performance.
“If the CEO is the heart of the
company pumping vibrancy through
its very core, the chairman is the soul
of the corporation, its conscience, its
moral keeper.”
8. Strategic Alignment & Execution
Organizational nirvana occurs when everyone knows where they are going,
the strategy for getting there and then makes that happen.
The theory is alluringly easy; practice, devilishly difficult.
“In the short, they (board members) cannot be uncritical lovers but have to
have to be loving critics to the institutions which they are paid to serve.”
serve.”
9. Capacity to Adapt
World class boards try to anticipate the next
development – to future proof the company
One of the greatest challenges facing corporate
corporate governance is that it is seen and often
often interpreted and implemented inflexibly. This
This is out of kilter with organisational reality. In
the face of continuous change and relentless
competition the capacity to adapt is a key
competency. Organisations - and boards - must
must be able and willing to change direction if
if and when required. Governance, at its best, is
best, is forward looking but fully aware of the
lessons of past performance.
10. Leadership Talent
People execute strategy
Identifying and developing leadership talent and planning
succession issues among
a company’s leaders is
often on the to-do list of
boards. There it can
remain.
“In the long run, the systematic
development of stars is the
most effective strategy to
create a sustainable
competitive advantage.”
11. “The best companies do not wait to be
governed, they shape the debate and
set best practice with agile and
responsive leadership that adapts
quickly to the changing circumstances
of business.”
Can the principles of Dynamic
Governance be applied to the Public
Administrations across Europe to make
decision making more effective?
12. Dynamic Governance applied to Public Administrations
Of course, compliance is necessary and important. But, the route to excellence
in corporate governance lies in understanding and acting on the six elements
that achieve truly dynamic governance.
How then does this apply to Public Institutions
• Deep business knowledge – understanding of the political landscape
• Diversity of thought – ensure diverse experience at all levels of the Administration
• Engaged leadership – Head of the Institution
• Strategic alignment and execution – taking a long-term view
• Capacity to adapt – investment in modern technologies
• Leadership talent – right person for the right role
13. Dynamic Governance Applied to SMEs
• Good Governance can help the public administration to make SMEs grow
through good legislation
• Legislation may inhibit innovation in the SME
• Compliance may not help business to develop
• In the SME context, Capacity to adapt – Deep business knowledge –
Diversity of thought are key factors for the Public Administration to ensure
the optimal environment for SME development
• Governance is the same for all entities and does not depend upon the size
of the revenues or upon the fact that it is listed or not or family owned
• The difference is in the way governance is implemented
• The specific case of Family Businesses
14. CALL TO ACTION
Actions that should generate a high-quality Public Administration which
would lead to business competitiveness and economic growth
• Define what is “good governance” for the Public Administration
• Understand that each Department is different and will require a different understanding
understanding
• Broader engagement
• High tech / High touch approach
EMBRACE DIVERSITY OF THOUGHT
