Impact of Wellbeing on Governance

It seems these days we are never far from a corporate dilemma, but the tendency in the current climate is to blame everything on Brexit and the winds of market uncertainty and loss of investor confidence. Whilst there is no doubt some impact from this, it's not the whole truth.

In the last few months there has been a slew of profit warnings, director departures, significant value loss, and in some cases even leading on to administration of historically sound businesses. Which begs the question, what is going so wrong?

Back in my early days of project management, we loved our triangles. There was always the favourite Time, Cost, Quality. For me there was another one that was far more important, and that was People, Process, Systems.

When I think of Governance, be it project or corporate, I think of process. However process on its own is simply a non starter. For process to be effective, it must be embedded within the company's systems or in its people, usually a mix of both. Simply incorporating it into systems is never a 100% foolproof method, and so in nearly every scenario, it is people that make processes effective, which means it can only be people that can make governance effective.

So why should people care about effective governance? Maybe it's part of their day job, but that limits it to a handful or people. Maybe it's because their reward package is dependent on it, but that can also create a box ticking mentality where the incentive overrides the intent.

Perhaps it would be most effective if good governance is embedded in the company culture, where people inherently care about their company reputation, integrity, values and ultimately success.

However for this to happen, people fundamentally need to know that the company cares for them, why else would they choose to care back. When any company doesn't prioritise the wellbeing of its employees, they stop caring. When they stop caring, they stop upholding the processes companies need to maintain effective governance. This is when the slippery slide begins, well before any profit warnings.

The best governance system in the world is ineffective without a positive supporting culture, and equally, culture alone with no governance can be just as dangerous. Pursue both with equal vigour, and put your employees at the heart of both.

So should you prioritise employee wellbeing and how do you quantify it in terms of value? I would recommend yes, because ultimately you could be gambling the entire value of your company if you don't.

#corporate #governance #culture #wellbeing

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