Guide
Having a high-performance board is a critical business tool for privately-held companies and family businesses to utilize. They improve business performance, increase company value and ensure the delivery of a higher return to shareholders and other stakeholders. Sirdar’s unique methodology of guiding high-performance boards blends best practice thinking, holistic governance models, the practical application of governance principles and the provision of independent non-executive directors and a team to guide the enterprise. This delivers real value to the companies in which we are involved and we see an immediate positive impact as well as increase in sustained profitability and value in the businesses we work with.
Sirdar’s approach to guiding high-performance boards utilises the Sirdar Governance Compass. This tool enables directors and boards to practically understand their role and responsibility and effectively fulfill it.
Enterprise Purpose
A board must ensure that the enterprise has a clear and compelling promise, vision and strategy. In clearly determining the right strategic direction, the board must be able to draw on the learning and insights gleaned from past experience through its continuous improvement. This provides context and serves to improve planning and shorten learning cycles. The board must also ensure that there is an alignment between strategic direction and the organisational culture – the best laid plans will not succeed if the values and culture of the enterprise are not supportive of those plans.
Accountability for Performance
A board must focus on the performance of the enterprise, which is achieved through an enabled, empowered team that is also held accountable for the results it is delivering. This is further achieved through the board’s role in hiring, firing and performance managing the chief executive, even if that person is the founder or major shareholder of the company. The board should ensure that the culture of the board and organisation drives performance and accountability. External stakeholders will also hold the enterprise to account for its performance and thus a board must engage stakeholders. plans.
Sustainability
A board must ensure that the enterprise delivers long-term benefits to all stakeholders through sustainable business practices. This includes delivering shareholder returns and managing shareholder expectations, which is especially critical when shareholders also wear the ‘hat’ of director and/or manager. A board must ensure that the company fulfils its economic, social and environmental responsibility for sustainable and ethical business practices while making sure that the enterprise is not growing faster than its resources will allow and that it is not exposing itself to potentially disastrous risks.
Conformance
The board must monitor, control and refine how the enterprise is functioning and delivering its financial and non-financial results. This is a process of measuring an enterprise against its performance measures and standards, while ensuring that policies, procedures and legal compliance aspects are adhered to. Continuous learning and improvement are essential business practices at a board and organisational level. The financial results achieved and credibility of financial reporting systems of an enterprise are also of primary concern to any board.
Sirdar Adventure Governance
An introductory level of governance implementation, with bi-monthly board meetings, two accredited Sirdar independent directors, on-going governance support and director training, and governance mentoring for the chief executive in alternate months.
Key Value Drivers
Practical implementation of introductory governance.
Development of the chief executive in governance-supporting competencies.
Focused business growth.
Sirdar Expedition Governance
A more intense foundational governance implementation aimed at accelerated growth, with monthly board meetings, two accredited Sirdar independent directors, and on-going governance support and training. Suitable for those companies with an established and functional executive team capable of supporting the governance process.
Key Value Drivers
Practical implementation of intensified, foundational governance.
Leveraging of strategic management capabilities.
Focused business growth.
Sirdar Ascent Governance
An advanced level of governance implementation aimed at higher altitude companies, with bi-monthly board meetings, at least two accredited Sirdar independent directors, high altitude directors where appropriate, a finance and risk committee, a human capital committee, additional committee specialists, a formal annual general meeting, and an annual strategic full-day workshop.
Key Value Drivers
Practical implementation of advanced governance.
Specialist management development expertise.
Advanced strategic planning.
Formalised shareholder engagement.
Focused business growth.
Our experience in guiding high-performance boards of privately-held and family companies has shown us that the principles of governance need to be encapsulated in a simple yet powerful and meaningful way in order to be effectively understood in this sector. As such, we developed the Sirdar Enterprise Governance Compass as a model to communicate the principles of governance and create clarity on the roles and responsibilities of the boards of directors that we work with. The Sirdar Enterprise Governance Compass provides a comprehensive, holistic and integrated approach to enterprise governance. It integrates Sirdar’s four cardinal points of governance and the eight dimensions thereof.
This model has helped countless executive and non-executive directors to focus and prioritise governance activity in relation to what a business needs at a particular point in time. It also helps boards to evalu¬ate the level of governance achieved across the entire business so that planning for improvements can take place. Just as governance itself does, the Sirdar Enterprise Governance Compass provides a structure and philosophy that enables the business and its team to focus on what is most important.
Directors, both executive and non-executive, are required to apply their minds to the business at hand and determine what is most appropriate in terms of the pace and priority of the corporate governance components to be implemented. As we do at Sirdar, it is important to begin with a detailed assessment that defines the gap between where the business is now compared to the defined ‘gold standard’ to be strived for or, in other words, the ultimate governance foundation. In so doing, you can plan for and prioritise what is most important and in what sequence it should be brought into the company. It does not all have to happen now. Like climbing any mountain, it is a journey you take step by step.
Traversing the Avalanche by Carl Bates, Chapter 15