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Good Governance is Not About Rules, Votes and Control

October 29, 2021

Posted in: WATSON Views

Have you, like me, been glued to the Rogers saga playing out in the media?

As a lawyer, mediator and governance advisor who has worked with hundreds of boards across sectors, including many controlled companies, it is sad to witness the dysfunction that has been laid bare for all to see.

The parties are headed to court next week to determine the legal board composition of Rogers Communications Inc. By the time this kind of action is taken, you know that something has gone sorely wrong in governance functioning.

This story reminds us that while legislation and regulatory schemes are an important part of the governance framework, good governance is more than compliance, and more than rules, votes and control.

Common vision, strong relationships, objective and rigorous decision-making processes – what have long been seen as the “soft side” of governance – are, in fact, fundamental to strong governance functioning.

Governance is about how people work together for the company to achieve success. It requires:

  • Alignment on vision and strategies, and on the values that underpin how things are done.
  • Healthy decision-making processes, particularly around potentially touchy subjects such as CEO evaluation.
  • Mature leadership, good communication, and pro-active team building to build consensus and cohesion among board members, and between the board, management and owners. Dynamics and culture rule.

This so-called soft side of governance is hard work and requires intentionality, not just from the chair, but from all members of the board and, in the case of a controlled company like Rogers, from the controlling ownership group.

Once the legal decisions are made, there will still be a lot for the Rogers board, owners and management to sort out for governance to become effective again.

I am confident there is a way forward despite this, assuming there is a presiding will to act in the best interests of the company (yes, I know it’s their duty).

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