The Future of Governance

Governance has long been a focal point raised by many, from elected Ministers at one end to the smallest lawyer or accountant advising the smallest of family businesses on how they should operate. It is by no means a new concept and it is one that these days many professional organisations make a lot of money out of selling training, programmes, checklists and other material that is aimed at simplifying and protecting an organisation, theoretically, against itself.

Much noise is made that the largest area of risk is in the smaller operators where they cannot afford the sorts of systems or staff or independent reviews and checks that will protect them from either errors or the potential of some form of deliberate attack, internal or external.  It is fair to say that there are rogue operators out there that set up and operate businesses for the specific purpose of criminal activity. Just as for many other areas of life those that do this are career (white collar) criminals; the biggest problem here is that we mostly either don’t write laws good enough or alternately don’t enforce those that are to prevent this form of consistent behaviour.

What is interesting to note over the last few months however, is how significant failures in governance processes in some very large organisations, from a very broad range of backgrounds, appear to have almost become just another part of routine corporate or societal life. The responses and stands taken by various parties to these debates, or in fact numerous legal actions that have ensued can to varying degrees beggar belief. If this was a one off then it would be passed for what it was, an error of judgement. Unfortunately there appear to be many.

The issue for me with these matters is that they have not happened in isolation; in that I am not referring to the fact that a number of them have all popped up at once but the fact that all of these organisations appear to have significant and notable advisors in a wide range of specialist and statutory capacities. It beggars belief that so much can actually go on that the general public considers to be on the extremity of unsavouriness and it can pass under the eyes of so many without comment; or in the alternate that they remained happy to continue claiming remuneration in circumstances where it was clear that their advice was being ignored.

It is regrettably, growing increasingly possible for threats to be made about governance issues and creating smoke screens around what is really going on. Even more regrettably is that the gap between what is considered normal and acceptable in large organisations can be significantly at variance with what the bulk of the population and certainly small business consider both necessary and appropriate. Society even goes as far these days to ensure that such largesse is in certain circumstances even enshrined in law; simply look at the difference in deductibility for entertainment and dining that exists between large organisations that can afford to operate their own in house dining facilities and those smaller that cannot.

With such gaps it becomes easy to lose sight of reality and enter a blurred world of privilege and comfort that is well beyond what is appropriate in the eyes of members or owners, and even more so the general public. The press has long made the lives of the rich and famous a very public issue which is often perceived (probably correctly) that it is coming out of their personal pocket. There are regrettably many others who seek to aspire to such pleasures and thus see it appropriate that the organisation that employs them should shower them with such benefits, and in many cases well beyond. Trust me the issue here is not about the odd drink or movie but is all the more about the difference between a room or a penthouse suite, or a bottle of wine worth less than $100 and one worth thousands.

This may appear to have been a bit of a rant but it is more that the instances are on the increase not the decrease, and that there are enough warning bells for all to revisit and clean up their collective acts. The economy is becoming more and more difficult for many to profit from and behaviour is rapidly becoming much more public, I doubt it is going to become any easier.

We will no doubt wait and see.