The Character Sitting at the Table: A Question of Personal Governance vs Corporate Governance

In every boardroom, there’s an invisible guest at the table—a character who represents the unspoken question: “Who governs the governors?” But perhaps the more profound inquiry is, “Who, or rather what, governs the governors?” This subtle shift in perspective challenges us to look not only at the individuals who wield power but also at the systems, values, and principles that shape and constrain their actions.

Corporate Governance and the Governance of Self

Corporate governance is heralded as the backbone of ethical business practices, accountability, and sustainable success. Yet, as we scrutinize governance frameworks and compliance metrics, how often do we pause to examine the personal governance of those entrusted with these responsibilities?

Personal governance refers to an individual’s ability to self-regulate, act with integrity, and remain accountable in their decisions. It’s the moral compass that guides the judgment of every board member. Without personal governance, even the most robust corporate governance systems are destined to fail.

However, governance does not exist in isolation. Beyond the “Who” (the individuals responsible for decisions), lies the “What”—the principles, mechanisms, and systems that govern them. This dual inquiry into both actors and systems forms the cornerstone of truly resilient governance.

The Criteria for Appointing Directors: Who Governs the Governors?

When appointing directors, organizations often prioritize technical expertise, industry knowledge, and leadership experience. These criteria typically include:

1. Professional Qualifications

• Expertise in relevant fields.

2. Industry Experience

• Familiarity with sectoral challenges and opportunities.

3. Leadership Skills

• Proven ability to lead teams and make critical decisions.

4. Diversity and Inclusion

• Representation of varied perspectives.

5. Reputation and Integrity

• A clean professional record and ethical grounding.

But are these criteria sufficient to guarantee effective governance? Can technical skills alone compensate for a lack of moral fortitude or a misaligned value system? This is where the silent character at the table interjects:

“What guides these directors beyond their qualifications? What governs their actions and decisions?”

Tracing the Lineage: Who Appoints the Appointers?

If we question the criteria for appointing directors, we must also question the criteria for appointing those who appoint them. For example:

• Shareholders elect board members, but who governs the shareholders?
• Nominating committees select directors, but what principles guide their judgment?

If we trace this lineage backward, we arrive at a startling realization: governance is only as strong as the weakest link in this chain. Whether it’s the appointing authority, the directors themselves, or the system that legitimizes them, each layer must be examined.

This is where the "What" becomes critical. While the "Who" focuses on individuals, the "What" delves into the systemic factors that influence governance:

• Laws and Regulations: External controls that define the boundaries of governance.
• Organizational Policies: Internal frameworks, such as governance charters and codes of conduct, that guide decision-making.
• Cultural Norms: The values and unwritten rules that influence behavior within an organization.
• Accountability Mechanisms: Tools like risk registers, audits, and board evaluations that enforce ethical behavior.

The interplay between the “Who” and the “What” creates the checks and balances that define good governance. Without one, the other cannot function effectively.

The Silent Character at the Table

The character at the table doesn’t just ask who governs the governors; it also asks:

• “What systems hold the governors accountable?”
• “What values underpin their actions?”
• “If we trace governance backward, where does accountability ultimately stop?”

These questions are uncomfortable because they force us to acknowledge the fragility of our governance systems. They reveal that technical expertise and experience, while critical, are insufficient without the ethical foundation provided by personal governance and robust systemic controls.

Reimagining Governance: The Interplay of Who and What

To truly strengthen governance, we must redefine our criteria at every level:

1. Director Appointments:

• Evaluate not just skills and experience, but also alignment with organizational values and ethical principles.

2. Governance Systems:

• Strengthen tools like board charters, committee terms of reference, and risk management frameworks to ensure accountability.

3. Cultural Foundations:

• Foster a culture that prioritizes integrity and transparency over short-term gains.

4. Accountability Beyond Individuals:

• Ensure that every decision-maker, including those who appoint directors, is held to the same high standards.

So the next time you sit in a boardroom, imagine the silent character at the table. It represents the intersection of personal governance and systemic governance. It challenges us to ask not just who governs the governors, but what governs them, and whether our systems are designed to uphold the principles we claim to cherish.

In this interplay between the “Who” and the “What,” lies the future of governance. Let us not just appoint directors but appoint stewards of integrity, guided by principles and systems that ensure accountability at every level. Let us ensure that the character at the table is not ignored but embraced as the voice of deeper inquiry and enduring accountability