Mike Russell

Does your company’s mission, values, and vision contribute to or solve the “Great Resignation,” “Quiet Quitting,” and the like?

Some questions for you to start checking:

❓ Can your employees link company mission and values to their work lives in practical ways and daily?

❓Are company mission and values evident in decision-making, communications, allocating resources and initiatives, and solving task and people problems?

❓At all levels?

❓Can your employees see that working toward company goals is in their best interest?

❓Can people find success and satisfaction in their work?

❓Does the company make that easy or hard?

How did you do with the questions?

If employees can’t find some fulfillment in the work alone, they’ll look for it elsewhere either through disengagement or outright quitting.

If they can find fulfillment in the work alone, but aren’t aligned with the mission, values, and vision, they won’t help achieving or have some ownership in company goals … and may even detract from goals.

One is an issue for the employee.

Both are issues for the company.

The solution starts with:

• Organizationally: clear mission, values, and vision that addresses all key C.E.O.S. stakeholders – Customers, Employees, Owners/shareholders, and Significant other stakeholders … and that all can readily align with.
• Individually: how well the employee fits the role/work direction and how that relates to their quality of life, and both in line with the organizational mission, values, and vision.

There may be more that needs to be done, but those are the foundations.

Company “engagement” surveys can also help with answers and can get information people may not be comfortable sharing with you.

Better yet are assessments that cover engagement *and* mission, values, vision, and policies/processes effectiveness.

👉  Interested in seeing what a more complete assessment looks like? Contact us to discuss how to get more complete information for your organization.

Be very clear in language and wording in governance documents … no matter your company size … to avoid confusion and potential legal problems.

A third governance example from Silicon Valley Bank (SVB) …

SVB had an apparent language mismatch in their Risk Committee charter. The charter serves as an example of how even a short company governance document can create disconnects if taken at face value and not worded carefully.

Here’s some of the first part of the SVB Risk Committee charter:

“The Committee’s purpose is to act on behalf of the Board in fulfilling its oversight responsibilities:

• Oversight of the Company’s enterprise-wide risk management policies and frameworks;
• Oversight of adherence to the Company’s risk appetite, risk profile and risk culture;
• Oversight of the Company’s Risk function and leadership; and
• Oversight of various risk management activities across the Company.”

OK thus far … a pretty common overview and typical Board committee type responsibilities – “oversight.”

Now the language mismatch.

SVB had an interesting situation in how risk governance was structured based on later parts of the charter: “The Committee shall be responsible for the appointment, performance evaluation (including goal setting), compensation, and termination of the Chief Risk Officer (the “CRO”), in coordination with the Compensation and Human Capital Committee, as appropriate. The Committee shall also be responsible for validating the CRO has the stature and experience to execute her or his role effectively. The CRO shall be subject to dual reporting: (i) to the Committee on a functional basis, and (ii) to the Chief Executive Officer of the Company on an administrative basis.”

In short, the Board via the Risk Committee was directly responsible for selecting/hiring, evaluating, compensation, etc. of the Chief Risk Officer based on the language in the charter. Not just final approval/disapproval of CEO actions or recommendations. The Chief Risk Officer was responsible to the Board functionally, not the CEO. The Board directly managed the risk function.

This contrasts with common formal Board structures where the Board selects, evaluates, and compensates the CEO who in turn is responsible for doing the same for the rest of the company. Selected functions like audit, risk, cybersecurity, and other functions the Board deems critical often have “dotted line” relationships to the Board for direct information flow, unfiltered by anyone else. Boards may also have final approval authority – concurrence or nonconcurrence – for selection, evaluation, compensation, etc. for key positions.

The language mismatch is “oversight” versus direct responsibility for managing the risk function. Not the same thing … at all.

🔎  Check your company key governance documents, paying attention to the language as an outsider would read them. Or, better yet, have an outsider read. Any things not clear?

Why company “governance” may not be so boring after all 😉

“Governance” is for any size company, and how well governance is carried out can affect company success.

If there is a Board of Directors, then overall governance is the Board’s responsibility. If there is no Board – common in smaller companies – then governance is still needed but is fully the responsibility of company owner(s)/leaders.

The triumvirate of mission, values, and vision is the foundation for any effective company and for effective governance. A clear picture of mission and values guides establishing vision and evaluating progress.

In a recent insight, we looked at the how any company can implement values more effectively and demonstrated in everyday work.

This time, let’s look at how to ensure meaningful results for key company stakeholders.

For long-term success, a company must balance needs and success of three basic stakeholder groups: customers, employees, and owners/shareholders. A company cannot exist for long without customers, employees to effectively serve the customers, and company finances that allow the company to serve those customers and employ those employees.

Adding a fourth group makes sense for most: any significant other stakeholders to which the company is committed to a mutually beneficial relationship.

We now have, as Blanchard and O’Connor termed in their book Managing By Values, the “C.E.O.S.”:

• Customers,
• Employees,
• Owners/Shareholders, and
• Significant other stakeholders.

The ”S” is where communities, key vendors, environmental concerns, etc. would go if desired … including the “E” and “S” in ESG (Environmental, Social, and Governance). A company can elevate one of these separately to the level of C.E.O.S., but that must not detract from business basics. Definitely don’t have two separate planning, tracking, and evaluation processes … this would lead to confusion and dilution.

The C.E.O.S. factor into governance in many ways.

• One way at the strategic level is a cross-check against company values. Do the values provide benefit across the C.E.O.S. or primarily one stakeholder category?
• Another top-level check is against strategic plans. Do plans and related metrics target all the C.E.O.S.? Some or one group? If the latter, is this temporary to rebalance or is a rethink needed of company focus?
• Tactically, projects can be checked against the values and C.E.O.S. And values should certainly apply to performance management.

There are many ways that values and the C.E.O.S. should be woven into the company’s being.

More in the next insight.

📩 If you’d like information like this via email instead of the hit or miss of social media, send me your email and I’ll add you to the list.

👉 Need help with making your company governance more effective? Contact us to discuss how to do that.

Why your company “governance” may not be so boring after all 😉

Actions for any size company … including some illustrations from the SVB meltdown.

“Governance” is for any size company, and how well governance is carried out can affect company success.

If there is a Board of Directors, then overall governance is the Board’s responsibility. If there is no Board – common in smaller companies – then governance is still needed but is fully the responsibility of company owner(s)/leaders.

The triumvirate of mission, values, and vision is the foundation for any effective company and for effective governance. A clear picture of mission and values guides establishing vision and evaluating progress.

In a recent post, we looked at the how any company can implement values more effectively and demonstrated in everyday work.

This time, let’s look at how to ensure meaningful results for key company stakeholders.

For long-term success, a company must balance needs and success of three basic stakeholder groups: customers, employees, and owners/shareholders. A company cannot exist for long without customers, employees to effectively serve the customers, and company finances that allow the company to serve those customers and employ those employees.

Adding a fourth group makes sense for most: any significant other stakeholders to which the company is committed to a mutually beneficial relationship. We now have, as Blanchard and O’Connor termed in “Managing By Values,” the “C.E.O.S.“:

• Customers,
• Employees,
• Owners/Shareholders, and
• Significant other stakeholders.

The ”S” is where communities, key vendors, environmental concerns, etc. would go if desired … including the “E” and “S” in ESG (Environmental, Social, and Governance). A company can elevate one of these separately to the level of C.E.O.S., but that must not detract from business basics. And definitely don’t have two separate planning, tracking, and evaluation processes … this would lead to confusion and dilution.

The C.E.O.S. factor into governance in many ways.

• One way at the strategic level is a cross-check against company values. Do the values provide benefit across the C.E.O.S. or primarily one stakeholder category?
• Another top-level check is against strategic plans. Do plans and related metrics target all the C.E.O.S.? Some or one group? If the latter, is this temporary to rebalance or is a rethink needed of company focus?
• Tactically, projects can be checked against the values and C.E.O.S. And values should certainly apply to performance management.

There are many ways that values and the C.E.O.S. should be woven into the company’s being.

There will likely be interesting case studies coming out of the Silicon Valley Bank (SVB) failure.

One key aspect will be independent of politics, pro- vs anti-ESG views, etc.: how governance can affect company success.

In SVB’s case, there seem to be some disconnects.

For one, there doesn’t seem to be any meaningful connection between the values and strategic or ESG plans as evidenced in their website, annual report, or other filings. Also, their values appeared to be ultimately meaningless and not practical or useful from the perspective of day-day decisions and behavior … how values are demonstrated in everyday work and the level of diligence in doing so. (more in an earlier post)

Things don’t appear to be much better from the C.E.O.S. – Customer, Employees, Owners/Shareholders, and Significant other stakeholders – perspective.

The C.E.O.S. aren’t explicitly identified in SVB strategic plans (again from their website, annual report, or other filings) nor any analysis of how the stakeholder groups are balanced in any factors. While the currently available information does allow some assumptions to be made, assumptions are not clear governance.

Matthew Sekol did an interesting analysis on SVG’s treatment of ESG in a recent article (link in comments). NB: don’t let “The ESG Advocate” title turn you off from the considering some of the governance analysis, even if you disagree with his viewpoint or opinions, or with ESG in general.

• A key point of his for this discussion: “nowhere do they tie this information [ESG strategic initiatives and related stakeholder types] back to the core of the business.”
• Also in his analysis, the ESG strategic initiatives did not explicitly identify which of the C.E.O.S. would benefit … Sekol had to make some assumptions. And the assumed representation was C.E.S. with governance being the only factor that would cover the “O.”

Assumptions do not make for good governance.

Sekol sums it up by saying “Governance will get you every time” … for better or worse.

Your turn … how is your company doing governance-wise?

Can you easily tell how the company has done regarding:

• Achieving its mission? Vision?
• Living its values?
• Serving the C.E.O.S.?
• How what you say you believe (or the company broadcasts) compares to actual performance?

Can the employees easily tell? Stakeholders?

What actions do you need to take to improve?

👉  Need help with making your company governance more effective? Contact me to discuss how to do that.

 

P.S.  📩 If you’d like information like this via email, send us your email to be added to the list.

“Without a solid grounding in the numbers, you’re at the whim of someone else’s narrative.”

Lots of good explanatory info now coming out about Silicon Valley Bank’s demise … one of the best pieces of advice the quote above from Rich Falk-Wallace.

One could add to the “numbers” watching what execs and others are doing … the backstory beyond the pure balance sheet/P&L.

In the age of social media, the velocity of opinions can be supersonic (or with a lot of hype, “hypersonic” ;-).

One of the best approaches to help your thinking and decision-making is the same as in the past:

👉  Don’t make major decisions based on a lot of data or complex scenarios swirling in your head.

👉  Write down what you are thinking, including assumptions and scenarios about the past, present, and future.

👉  Get feedback from trusted others (or a coach if you have one) about your thinking, then decide.

This gets the whirlwind out of your head and into something manageable … and “manageable to” and communicable if you are in a leadership position.

It also enables learning by everyone involved as assumptions are tested going forward … which is almost impossible if thinking is just kept in your head. And our head likes to correct/rationalize the narrative as we go along 😉

The caveat to the above is if a decision is needed right now … but those are fewer than most people think. The hype/hysteria can create a “need to act now” mentality when, with a little analysis, even a decision to not act might be better.