Successful Corporate Governance Comes From Personal Self Governance

How can senior managers make a change for the better in their own lives and, by association, in corporate leadership and governance? Because we would argue that strong and sustainable corporate governance can only happen if the people in charge of organisations can demonstrate solid personal governance. Then we can start taking steps towards a more credible and more widely accepted form a of governance as a whole.

-Fredy Hausammann, managing partner, AMROP Switzerland and vice chair AMROP, EMEA

This root-level thinking by Fredy Hausammann is simplistic and brilliant in its thinking and recommendation. Yet, sometimes organizations miss what’s most obvious, instead focusing on what it believes must be complex. Thus, problems are not sufficiently understood, analyzed or skillfully problem solved.

Personal self governance deficiencies or the absence of personal governance has brought negative publicity upon leaders and their companies as well as in certain circumstances wrecked reputations and careers.

Yet still executives and organizations are not learning, either from weaknesses of mind and behavior but also failings of other executives, public leaders and companies.

What can be done to improve self-governance and thus, corporate governance?

Coaching is where improvement comes

Assessments are helpful, yet without regular ones, especially in times of high organizational stress and sustained coaching, improved thinking and skill development are not going to occur or become default behavior.

Coaching is not punishment, it is opportunity, for both the executive, leader and organization. How coaching is framed is critical to the degree to which the person will be receptive.

Support and encourage progress

Coaching is well received by some leaders and strongly resisted by others. Regardless of the response, supporting and encouraging progress is critical. Yet it has to be done in a specific manner to be most successful.

Taking the approach of respectfully recognizing effort and gain, is understanding of struggles of the learning process and also focuses on the benefits to be acquired through coaching that are meaningful to the person will often create a fertile atmosphere for focus, improvement and healthy confidence.

Stress testing

During coaching, being conscious to examine the person’s responses to stress to gauge growth and how far the person has come from the beginning and how capable they are is intelligent observation and analysis. Learn before a crisis develops.

Improved oversight

Companies regularly fail themselves, investors and their people with weak, insufficient or missing oversight. Even though this is commonly reported in the media, rare is it that organizations or leaders universally learn from the mistakes of others, and often the crises of others.

Safeguards are critical and should be considered as mandatory as airplane and ship safety. To not see the need for that level of examination, scrutiny and focus is failure of basic risk management.

In the overwhelming majority of crises, organizational or personal, there was a clear sign or multiple signs of cracks in personal governance that were not promptly, skillfully addressed.

The high-risk thinking and behavior escalated rapidly and led to more widespread, deep, costly damage to the organization and the individual.

Reward achievement of desired behavior

Desired behavior should not just be helpful in avoiding consequences, it needs to be recognized and rewarded with words and opportunities, and done so during regular coaching checkups as well, when a person comes from a beginning of great deficiencies. This should be done organization wide yet especially with the most challenged people and leaders.

Numerous companies and their leaders do corporate governance successfully, yet too many are not cognizant of how to build a stronger process or they give it more lip service than commitment. 

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