In a new report published today, the leading business organisation hopes its report will kickstart the debate about how to define good governance – and recognise those companies that do it best.
The Great Governance Debate: Towards a good governance index for listed companies, launched at the IoD this morning, sets out a new framework for assessing corporate governance, moving away from a focus on compliance and towards a more complex measurement which combines public perceptions with a range of objective factors.
Launching the report, Ken Olisa, chairman of the advisory panel for the report, warned that the current system doesn’t fully address what corporate governance is truly about.
“No one factor dictates whether a company is well run,” Olisa said. “It is simply not correct for a company to say that because they have ticked certain boxes, they show good governance.
“Now is the time for some bold thinking on how we define and measure governance, including the recognition that it is essentially an organic process involving the interaction of groups of people.”
The new report is the first stage in a move towards creating a comprehensive Good Governance Index which ranks individual companies on their corporate governance, taking into account factors beyond just compliance and looking at a company’s wider corporate behaviour and culture.
Simon Walker, director general of the IoD, said that the new framework “challenges previous ways of measuring the governance of big companies, and kicks off a new debate on how firms can improve their transparency, accountability and performance.”
On Tuesday, Director.co.uk will provide updates and video from the official launch at the IoD’s central London headquarters at 116 Pall Mall of The Great Governance Debate: Towards a good governance index for listed companies. Keep an eye on the website and our Twitter feed @DirectorIoD for updates.