7 - The governing body and strategy Flashcards
(39 cards)
What is considered the strategic expectation in a commercial organisation?
Maximising the long-term return to owners and enhancing the value of assets - promoting the success of the company
Governance involves responsibility and accountability for
the satisfaction of stakeholder expectations
What sits in the middle of the intersection between governance and operational management?
The role of the CoSec / governance professional
Operational management involves responsibility and accountability for
the delivery of process
Key differentiator between governance and operational management
Timescale involved
Op. management - short-to-medium frame
Governance - long-to-medium frame
Strategy should be aligned in triangulation with:
Risk and Control
4 stakeholder groups which must be considered per S.172
- Members as a whole
- Employees
- Suppliers and customers
- Community and environment
2 key benefits of controlling risk
Maximising the upside
Minimising the downside
Other than consideration of stakeholders, other required aspects of promoting success of company per S.172 (3)
Long-term consequences
High standards of business conduct
Acting fairly between members
3 areas in which stakeholders can be classified
Internal (owners and employees)
Market (suppliers and customers)
External - direct (banks) and indirect (government, environment/community)
Primary and secondary expectations of owners
P - financial return
S - added value
Primary and secondary expectations of employees
P - pay
S -work satisfaction, training
Primary and secondary expectations of customers
P - supply of goods and services
S - quality
Primary and secondary expectations of creditors
P - creditworthiness
S - payment on time
Primary and secondary expectations of suppliers
P - payment
S - long-term relationships
Primary and secondary expectations of the community
P - safety and security
S - contribution to community
Primary and secondary expectations of government
P - compliance
S - improved competitiveness
What does stakeholder mapping involve?
Look at the levels of power and strategic influence of different stakeholder groups and considering the impact of not satisfying their expectations
down the left - low/medium/high power to disrupt business
across the top - low/medium/high interest in business
Stakeholder mapping - 4 groups into which stakeholders will be categorised and how org needs to engage with them
Low power to disrupt, low interest - monitor
Low, high - keep informed
High, low - keep satisfied
High, high - actively engage
5 pros of stakeholder engagement process (there are more)
- Aids development of long term strategy
- Allows development of shared objectives
- Aligns strategy with activities of other orgs/groups
- Deters high risk activity
- Improves how org is viewed by prospective stakeholders (think investors)
4 cons of stakeholder engagement process (there are more)
- Impossible to satisfy everyone (usually)
- Process can be long
- Danger of interference from stakeholders if strategy needs to shift (or difficulty to change strategy without alienating stakeholders)
- Reduced independence to respond quickly
Two extremes of power dynamic
Traditional - centralised, bureaucratic, structured
Empowered - devolved, participative, fluid
Within which extreme of the power dynamic is their a greater ability for stakeholder influence
Empowered
Which extreme of power dynamic is typically focussed around a rational strategy approach?
Traditional
Empowered approach has a more collective and emergent approach
