With the increase regulatory surveillance in banking, medical, biotech etc., many corporate are allocating larger budget for governance related projects. The project outcome is often dismay, with complicated processes resulting in slow decision making, higher operating costs and sub-optimal customer engagement. Consequences are frustrated staff, angry customers and higher costs.
To avoid creating a giant mammoth of processes for the sake of “better governance”, here are some tips to follow:
1. Focus on the purpose and expected outcome
Regulators often issue long list of rules to comply. The common mistake is to create a process for each rule, I call it the “ticking the boxes” syndrome. It requires very little thinking and the result is many duplicate processes checking for the same thing.
Take a step back, focus on interpreting the purpose and intended outcome of the rules. This will help sum-up important points, create meaningful processes and reduce clutters. Ideally, the entire operating model should be assessed when integrating new governance processes.
2. Empowering your people and assigning clear ownership
While attempting to cover every single possibility, we sometimes end up creating loops of processes passing the task on a musical chair of approvers. The more approvers you have on the process, the lower the sense of individual ownership.
Start by creating a Responsible Assignment Matix (RACI – Responsible, Accountable, Consulted and Informed) to assign the right role for each person (not everyone needs to be an approver) and communicate their roles and expectations clearly (give training if required). This helps to empower your people to play their roles in operationalising your governance.
3. Creating concise and meaningful data for review
No one has the time for pages and pages of reports. Thick decks of reports often end up being filed away. This can be counter-productive in creating better governance in the company. You need the reader to read the report, understand the situation and make good decisions.
Hence creating good quality meaningful data with clear interpretations is a critical step towards better governance. A well-designed dashboard is a good monitoring tool for management.
4. Use other forms of control tools
Maker-checker, approvals are not the only way to establish good governance. However, many governance design place a heavy reliance on it. The result is cumbersome processes with many layers of approvals.
Effective use of other control tools like self-assessments, surprise checks, whistle blower hotline, well-defined escalation channels etc. can help to supplement the governance needs and reduce the reliance on approvals.