Is UK corporate governance failing?
With various scandals and problems relating to poor corporate governance hitting the news in recent months and years, the issue has been brought into focus and many firms are working to boost the measures they have in place, but is it working?
According to Colin Coulson-Thomas the answer is certainly no. Speaking at a global convention at Lords Cricket Ground the author of Developing.
Directors said that to move on from avoiding risks to sustainable growth in the UK, “new governance” needs to be adopted.
He explained that company leaders in the UK should want to move into a new world of corporate governance due to the beneficial results it can provide for firms, people and the planet as a whole.
“Old governance has involved top-down command and control leadership with its emphasis upon directing, leading, motivating and monitoring. Too many boards have been formulating strategies and producing plans rather than making things happen,” he noted.
The expert believes that companies and workers have lost sight of the need for competent directors to be in place and effective boards to help build and innovate businesses.
With so much focus on changing corporate governance practice, how have firms been failing?
Well, Mr Coulson-Thomas believes that more stringent measures have actually been a placebo and a distraction from what needed to be done, which may have led many companies to spend too long “barking up the wrong trees”.
“Effort is devoted to restructuring and corporate initiatives to address various challenges rather than creating opportunities and shaping the future. Costly, time consuming and disruptive attempts are made to change cultures and win talent wars when there are quicker ways of competing and winning with existing people, cultures and structures.”
The corporate governance standards in the UK and around the world have clearly not been sufficient, with scandals, bailouts and government intervention taking place all too frequently to prevent the collapse of the financial and economic systems as we know them.
New governance, as outlined by Mr Coulson-Thomas, includes a focus on the behaviours of directors and boards, an emphasis on implementing strategy and providing performance support and the creation of bottom-up leadership, which will benefit people as well as organisations by helping them to handle uncertainty and excel at difficult jobs.
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