Strategic Governance
Enabling Financial, Environmental, and Social Sustainability
Thursday, November 4, 2010
Strategic Governance's Integrated Reporting System
With the Strategic Governance System - a book (amazon.com), service, software, curriculum, and now Integrated Reporting, you can "do what you say and say what you do" about your strategic approach to governance, thereby playing a leadership role in the global community by truly "walking the talk" of financial, environmental , and social sustainability. If not you, who? If not now, when? Welcome aboard.
Mark W. Sickles
Saturday, April 18, 2009
All Germaine Dimensions of Management
If so, how many “germaine dimensions of management” do you own? Can
you list them? Describe them? Create combinations with them tailored to
the task-at-hand? Which ones are missing for you that, if present, would
enable you to make a breakthrough in your effectiveness?
This is what great leadership is all about: considering all the germaine dimensions
of a given problem or opportunity, and then integrating them into a response
that advances your position in terms of strategy, mission, and vision.
To learn how to ensure your tool kit of management diemsions is complete,
contact Mark W. Sickles at 732-612-3783, or mark@nacdnj.org
Tuesday, April 7, 2009
Global Corporate Governance Breakthrough
Region Corporate Governance Congress in Dubai. Due to the economy,
the quantity of attendees was down from last year, but the quality of those
who did attend was exceptional. Mark responded by transforming the
congress into a highly interactive discussion among this globally diverse
group of governance opinion leaders and practitioners, producing what we
feel is a solution to the current economic problem: A statement of The
Universal Purpose of Corporate Governance.
Mark began the congress by leading the group through an inquiry into
the meaning of the following statement: “A crisis is a terrible thing to waste”.
The group felt this statement meant we should be looking for opportunity
in the face of our current adversity. As the saying goes, breakthroughs are
often preceded by breakdowns, and we certainly have the latter. Mark
then proposed that this is no time for the tranquilizing drug of gradualism;
no time for projecting the past forward; no time for “business as usual”.
Instead, Mark asserted this is a time for bold, decisive action; for declaring
a future outside the realm of business as usual; for creating a level of
performance that could not be predicted by anything done in the past.
Mark suggested that declaring this future of corporate governance and then
“pulling that future” into the present with effective action was not only an
opportunity for those at the congress; it was their responsibility to the
global business community. And so they did.
The congress culminated at the end of the second day with Mark facilitating
a process in which a combination of speakers and delegates representing
every major region of the world produced the statement of The Universal
Purpose of Corporate Governance. This statement is based on the following
three assertions:
1. The 4 pillars of governance are government, education, professional
associations, and industry. (The .govs, .edus, .orgs, and .coms) Government
needs to coordinate with education and professional associations to provide
guidance and support to industry. Industry values need to be managed in
the contexts of professional and ethical values toward the goal of sustainability.
2. The focus should be on the creation and management of firm-level cultures
based on ethical, professional, and industry standards. If a firm, unit, function,
or individual is not adding value from the view of all three standards, it is
unethical to continue on that path. Governments should prevent this through
regulation, legislation and enforcement; nothing more, nothing less.
3. The goal for industry and professional standards is to set the bar higher than
ethical standards and governmental regulations, whose purpose is to serve as a
safety net to prevent economic fiascos like Enronitis and the current capital
market crisis.
These assertions lead to the following statement: "The universal purpose of
governance is to integrate ethical, professional, and industry values and standards
into firm-level cultures that enable winning strategies, minimize risk, meet the
needs and expectations of the firms’ stakeholders, and fulfill the firms’ responsibility
for a sustainable world.”
How Should You Respond?
We propose that firms around the world respond to this governance breakthrough
the same way the speakers and delegates at the congress responded to create it:
With bold, decisive actions to achieve extraordinary results. This can be done in a
two step process:
1. Develop a deep understanding of the meaning and implications of the Universal
Purpose of Corporate Governance.
2. Develop your own unique, proprietary purpose for corporate governance that
aligns with the Universal Purpose while providing your firm with a sustainable
competitive advantage.
The primary system for taking these two steps include the ten principles of Strategic Governance introduced to the global business community by Mark during the first
day of the congress:
Top Ten Principles of Strategic Governance
1. The Purpose of Governance
2. The Purpose of Strategy
3. The Essence of Risk
4. The Relationship Between Governance, Strategy, and Risk
5. The Relationship Between Boards, Governance, and Shareholders
6. The Relationship Between Boards, Management, and Shareholders
7. The Relationship Between Boards, Strategy, and Culture
8. The Relationship Between Boards, Management, and Strategy
9. The Purpose of Culture
10. The Relationship Between Organizational Design and Strategy
Your mastery and subsequent application of this system of interdependent
principles, supported by a related system of models, methods, and techniques,
will provide your firm with the holistic capability needed to fulfill the universal
governance purpose. This “systems level” of performance will enable your firm
to set and achieve internal standards far greater than any external criteria,
thereby complementing the effective role of regulation, legislation, and enforcement:
Assuring a principle-based approach to corporate governance.
To begin the process of transforming your firm into a Strategic Governance model
that fulfills the Universal Purpose of Corporate Governance in a way that provides
you with a sustainable competitive advantage, contact Mark at 732-612-3783, or mark@nacdnj.org.
Thursday, March 26, 2009
Correcting Board Incompetence
A major wrong turn made by boards was when they abdicated their responsibilities to management. This has led to the "imperial CEO", and the "ceremonial board". Very expensive mistakes.
Shareholders don't entrust their capital to management. They entrust their capital to boards. They then expect those boards to assemble management teams capable of using the rest of that capital to purchase assets, and then manage those assets to produce returns shareholders expect for the risk they incurred in making that investment. Boards are responsible for doing whatever is necessary to make sure that happens, as long as it's legal, ethical, and moral.
When boards regain this position and start playing this role, then and only then will they be able to purse competence followed by excellence. Until they do, boards don't deserve the confidence of shareholders, do they?
Mark W. Sickles
Organizational Architect
201-315-3653
Monday, March 23, 2009
The Need for a Global Governance Standard
The current global economic crisis is a failure of past and present governance systems. In response, we are introducing a new approach to governance designed to fulfill its fundamental purpose. This principle-based approach to corporate governance may serve as the foundation for a globally recognized standard for this vital discipline.
Article
In October of 2008, Carl Icahn charged that boards aren’t doing their jobs. Warren Buffett in effect said the same thing in 2003. And in 1976, Peter Drucker said the board of directors has failed as an institution in nearly every major fiasco over the last 50 years. Having been deeply involved in board education and corporate governance over the last 5 years, I can see why: There is far too little discipline and science applied to this critical function. Governance needs to be governed, and the role of the board needs to be transformed.
In response to this unmet need, we are introducing to the global business community a new approach to corporate governance designed to fulfill its most fundamental purpose: Assuring long-term success for the firm and all of its stakeholders through alignment of their interests and efforts. Created at the systems level of thought and action, this principle-based, strategic approach to corporate governance is intended to serve as the foundation for the establishment of a globally recognized standard for this vital business discipline.
We believe the key to success is a synthesis of the agency and stewardship approaches to corporate governance integrating governance, strategy, risk, and corporate social responsibility. Further, governance must be practiced in a performance-based context as a powerful enabler of the strategic management process, increasing interdependence between the board and management on behalf of the firm’s stakeholders.
This combination of experience, discipline, and science has enabled us to create our firm’s top ten principles of strategic governance:
1. The Purpose of Governance
2. The Purpose of Strategy
3. The Essence of Risk
4. The Relationship Between Governance, Strategy, and Risk
5. The Relationship Between Boards, Governance and Shareholders
6. The Relationship Between Boards, Management, and Shareholders
7. The Relationship Between Boards, Strategy, and Culture
8. The Relationship Between Boards, Management, and Strategy
9. The Purpose of Culture
10. The Relationship Between Organizational Design and Strategy
While this system of principles should be considered as fundamental, we expect it will require additions and perhaps slight modifications depending on the country or geographic region in question. However, these principles are all integral parts of a holistic approach to corporate governance proven to cause business success under vast amounts of varying business conditions, and should generally be viewed as universally effective in their application.
Biography of Author: Mark W. Sickles, an adviser to corporate directors and officers, is founding principal of Mark W. Sickles, LLC. He is author of Shareholder Value Assurance-The Cure for Enronitis and numerous articles published by Directors Monthly, Directors & Boards Magazine, and Investor Relations Update. Mark has served as an adjunct professor and faculty member at The Singapore Institute of Management, American Management Association, and Rutgers University. He currently serves on advisory boards of Inside the Boardroom at Drexel University’s Lebow College of Business, Trestle Group, and The Rothman Institute of Entrepreneurial Studies.
Contact Information:
Email: mark@nacdnj.org
Address:
Mark W. Sickles, LLC
PO Box 91
Brielle, NJ 08720, USA
C: 1-201-315-3653
Sunday, March 15, 2009
The Purpose and Need For Shareholder Value Assurance
“Corporate Governance is the way in which the organization is directed and controlled by the board. Strategy is a classic board responsibility, and it is therefore in the Chairman’s field. Equally, the Chairman is responsible for seeing that the company has an identifiable sense of purpose, and that this purpose is regularly reviewed. In addition, the Chairman is likely to have the task of putting across the company’s aim to outside audiences. For all these reasons, the chairman needs to be involved in the development of the enterprise strategy.
Chief executives in their turn will be responsible for preparing the strategic options and for putting them to the board. Since chief executives will be in charge of carrying out the agreed strategy, it has to be one in which, in its final shape, they are committed personally and absolutely. Hammering out a strategy is an iterative process in which ideas and plans move backwards and forwards between the board and the various levels of management. It is a process which has to be approached from the bottom up as well as from the top down.
The board sets the boundaries within which operating units draw up their individual forward plans. In doing so, the operating units can be expected to put forward proposals which build on their existing activities. It is for the board, however, to take an overall view of the future shape of the company and to decide which of the existing activities should be developed and which should not. It is the synthesis of these two views of the company that the chief executive will put to the board – a synthesis which may only be arrived at after considerable internal discussion.
The strategic proposals which come to the board will represent the considered judgment of those within the company as to the direction which the business should be taking. These proposals then have to be reviewed by the board as a whole, where the outside directors will see them through different eyes, since they are outside the company looking in. In practice, it is FAR FROM EASY to involve all board members usefully in a discussion of strategy. It requires IMAGINATIVE EFFORT by both the Chairman and Chief Executive to present strategic issues to board members early enough in the process for them to have real influence over the outcome, and in a form which encourages them to contribute positively to the development of the final strategy.”
Recently, The National Association of Corporate Directors urged boards to “assess whether they are effectively taking advantage of technological advances which provide opportunities to share information and enable informal commentary between meetings.” Our product, Shareholder Value Assurance, is the most effective technological advance for this purpose that is the result of an “imaginative effort” to create a reliable, valid, and systematic way to practice this “far from easy” strategic approach to corporate governance.
Mark W. Sickles, LLC
www.markwsickles.com
mark@nacdnj.org
201-315-3653
Saturday, January 17, 2009
Strategic Governance - Human Resource Management Breakthrough
resources than anyone else I have worked or studied with.” AT&T HR Leader
Mark W. Sickles, LLC is the creator and sole provider of High Performance
Workplace II products and services. In these tough economic times, you
can’t afford to invest in anything less.
To Corporate Directors:
How does your HR function enable you to meet the board standard of strategic asset and sustainable competitive advantage? As a member of the board, you are accountable to the shareholders for directing and controlling executive officers to deliver superior returns through sustainable means. Did you know this is the purpose of the human resource function?
Board accountabilities include strategy, organizational design, culture, performance management, evaluation, executive compensation, selection & recruitment, and succession planning. When these accountabilities are carried out using an internally aligned strategic human resource management system seamlessly integrated with the business planning process, the standard of strategic asset and competitive advantage is met, and significant increases in sales, profits, and market value are achieved. Enabling you to meet this standard for today’s corporate director while delivering this superior value to your shareholders is the purpose of our unique combination of governance, strategy, and human resource management.
To Executive Officers:
How does your HR function drive long-term shareholder value? As a member of the C-suite, your primary objective is to deliver superior returns through sustainable means. Did you know this is the purpose of the HR function? We have broken through to a new level of HR effectiveness with a unique combination of governance, strategy, and human reosurce management. This new HR standard enables you to integrate the work of the board, management and overall workforce to create the ultimate organization, where ordinary people achieve extraordinary results on behalf of all the firm’s stakeholders.
In this new HR paradigm, the focus is on the overall organization, rather than just the people in it. This broader focus includes strategy, culture, structure, and management systems. When carefully aligned, these organizational factors create a proprietary context in which to build a highly organized, highly skilled, and highly motivated workforce. The combined effect is a powerful source of sustainable competitive advantage and long-term shareholder value. This unique capability, available only from Mark W. Sickles, LLC, will enable you to succeed in the eyes of your board, causing your board to succeed in the eyes of the shareholders.
To Line Executives:
Driving high performance in your organization is your role as an executive. This begs the question: How do you build a high performance workplace? The answer is a masterful application of our breakthrough strategic human resource management system. This system will enable you to seamlessly integrate strategy, organizational design, and operations into a strategic asset and sustainable competitive advantage.
In addition, you will have the systematic capability to build and manage a highly organized, highly skilled, and highly motivated workforce able to manage your systems, in your structure, while practicing your values, all to achieve the goals of the business. In doing so, you yourself will become a strategic asset and source of competitive advantage to your organization.
To HR Executives:
What makes us unique in the Human Capital Management marketplace is our philosophy that the HR function is a powerful strategic asset and source of sustainable competitive advantage that can be exploited by directors, officers, and the overall workforce to build organizations that are great places to work, buy, and invest. When employees can see a connection between their daily work and the “significant few” business goals of the firm, they see the importance and dignity of their work, which adds to the importance and dignity of their overall being, both inside and beyond the workplace. This sense of dignity and significance in self inspires and motivates these people to freely give extraordinary efforts indicative of a high performance workplace, one of the most fundamental goals of a world-class HR function.
To Customers:
As our customer, you recognize the value in aligning your strategy, organization, and operations to create a high performance environment that is a great place to work, buy and invest for your employees, customers, and shareholders. You understand the importance of partnering with an organization that will maximize the performance of your people and company in ways that are unique and proprietary to your firm, providing you with a serous sustainable advantage that drives long-term shareholder value. At Mark W. Sickles, LLC, we have significantly enhanced our ability to deliver this value, making a long-term relationship with us a competitive advantage and sound strategic investment for your firm.
To Investors:
There is a pressing, unmet need in the capital markets for a principle-based, scientific approach to strategic HR management and organizational effectiveness that will enable directors and officers to consistently meet and exceed the expectations of the firm’s stakeholders. Meeting this need is far from easy, requiring an imaginative effort. We have made this imaginative effort, resulting in a powerful point of differentiation that will significantly enhance the performance of our clients’ organizations, while providing a superior and sustainable return to their valued shareholders.
Sample Testimonials:
*Mark has done more to advance the applied science of Humans Resources than anyone else I have worked or studied with.
*Thank you for the gift of Mark Sickles. He is like a wizard – just what HR needs at AT&T.
*Mark made me re-examine my entire HR executive role. This was extremely beneficial.
*The topics Mark covered have provided me with the advantages to succeed in the future.
*Mark is the subject matter expert – someone who can take HR down the right path.
*Mark has helped me see the light. I now see that I have a tremendous amount of work to do, but at least I am on the right path.
*All segments of Mark’s HR system are essential parts of an integrated whole.
*Mark and his SVA methodology are definitely going to help me become more of a strategic partner in my organization.
*Mark ties the material together with real life examples. BEST SEMINAR I have ever attended. And I don’t use superlatives.
*Mark is outstanding. I wish I had 1/10 of his brain power regarding Business Strategy. I know I would be a winner in my new HR role (at HP).
*Excellent information! What a refreshing and pleasant surprise.
Outcome of an Effective MWS Strategic HR Application
From the CEO of American Standard:
“We now have plans to integrate our organizational design with our business strategy.
Specifically, we will act to align our organizational structures with our business goals and shared values. We will act to create a great place to work for a great workforce. We will act to develop our staff, ensuring they have the skills and styles to manage our business systems to deliver superior value to our customers that, in turn, delivers superior value to our shareholders. In doing so, our workforce will become a source of competitive advantage that transforms our company into a great place to buy and invest.”
Note: This MWS application resulted in a HR Executive cover story entitled, “Setting The Standard.”
How Mark W. Sickles Advanced “The Applied Science of Human Resources”:
*By shifting the primary focus of strategic HRM from the workforce as the most fundamental asset, to the organization as the most fundamental asset
*By expanding the scope of strategic HRM from strategy execution, to the overall strategic management process
*By aligning, linking, and integrating the work of the board, senior management, and the workforce
*By creating the organizational equivalent of the human central nervous system
*By creating the formula for smart, athletic organizations that deliver sustainable, superior value to employees, customers, and shareholders
*Mark calls this advancement, “The New HR”, and the enabling software category, “HPW II.”
ROI With Mark W. Sickles:
*Superior returns through sustainable means
*For a 15,000 employee firm:
*$405 million annual increase in sales
*$57 million annual increase in profits
*Up to $1 billion increase in market value.
Projects/Engagements:
*Diagnostic
*Transformation, including
*Education
*Application
*Software Implementation
*Coaching
Summary:
Evolved from a world-class strategic human resource management system, the Mark W. Sickles approach to strategic HRM is a disruptive innovation providing business leaders and HR executives with a breakthrough opportunity to practice world-class organizational effectiveness and strategic management, leading to sustainable value-creation and long-term success. This HRM breakthrough represents a unique opportunity to reduce risk and increase the certainty of controlling your own destiny while becoming a great place to work, buy and invest for your employees, customer, and shareholders.
© Copyright 2008, Mark W. Sickles. All Rights Reserved