Continuing the dialogue on good governance
Boardroom dilemmas & good-practice interventions
Decisions that cannot be captured in a simple right or wrong answer can create tough dilemmas in the boardroom. Yet these often are the decisions that really matter. This article is about the second white paper of Deloitte's Research Program, which explores the relationship between good governance and company performance.
Linking governance and company performance
In February 2017, Deloitte published it's first white paper on the relationship between good governance and company performance. This second white paper provides insight into the main dilemmas faced by boards. The whitepaper and infographic of Management Scope can be downloaded on the right.
As the first paper explained, good governance can result in better performance and long-term value creation. In determining what good governance entails, however, there is no one-size-fits all solution. Deloitte's aim in conducting this research and facilitating a broad dialogue is, therefore, to help management and supervisory boards and its members identify the governance issues that really matter.
Boardroom dilemma's and interventions
Based on interactions with board members and Deloitte's experience, one can see that that most boardroom decisions follow a predefined procedure. Often, however, these procedures do not allow sufficient time and energy to be spent on the decisions that really matter, and which we call ‘critical dilemmas’. Over the past three months Deloitte has continued the dialogue by conducting interviews with management and supervisory board members of listed Dutch companies to explore the critical dilemmas that they face in governing their organizations, with the aim of identifying examples of good governance in practice. Deloitte's focus in these interviews was on understanding how governance affects decision-making in the boardroom. The different perspectives of executives and non-executiveson on identified topics can be found in graph 1.
Deloitte's research was conducted against the background of the introduction of the 2016 Dutch Corporate Governance Code (‘the Code’). Deloitte has sought to provide guidance on and examples of good practice so as to help promote good governance and an appropriate interpretation of the Code in those moments that really matter, personally or for the company.
The insights resulting from this research are captured in this whitepaper. Including best practices from some of the most experienced board members in the Netherlands as well as complimentary insights shared by professor Mervyn E. King, one of the global thoughtleaders on corporate governance and experienced board member, both in executive and nonexecutive positions.
Different perspectives on different topics