All Posts Tagged With: "board of directors"
Baldrige Model: How do you govern and fulfill your societal responsibilities?
Item 1.2 in the Baldrige Criteria asks key questions about your organization’s governance system, legal and ethical behavior, and societal responsibilities. The following processes, best practices, and problem areas look at critical issues in this part of the Baldrige model.
Your organization needs processes for:
- Management and fiscal accountability
- Transparency in operations and in the selection and disclosure polices for board members
- Independent internal and external audits
- Protecting stakeholder and stockholder interests, as appropriate
- Evaluating the performance of senior leaders and the board
- Using senior leader and board member reviews to develop and improve performance of these leaders and of the leadership system
- Preparing for and addressing any adverse impacts on society of your products and operations
- Promoting and ensuring ethical behavior in all interactions
- Contributing to the well-being of your environmental, social, and economic systems
- Actively supporting and strengthening your key communities
Best practices to consider:
- Key measures are identified for evaluating the performance and improvement of leaders and of the leadership system.
- Senior leaders and board members use formal processes for reviewing their performance and that of the leadership system and use the results of those reviews, which are typically annual, to improve personal and organizational performance.
- Key processes, measures, and goals for achieving and surpassing regulatory and legal requirements and for promoting…
99% Above Average
Call it the Lake Wobegon effect after Minnesota’s very own Garrison Keillor, that fictional place where “all the women are strong, all the men are good looking, and all the children are above average.”
Only in this case, they’re not children: They are the chairmen of 722 nonprofit hospitals, and 99% of them think their hospitals fare at least as well as a typical hospital on standard quality measures, according to a survey published in Health Affairs. Even worse, 100% of the chairmen of hospitals that perform the worst think they are at least as good as a typical hospital. (“Only 1% of Hospitals Are Below Average,” Jacob Goldstein, WSJ Blogs, November 9, 2009)
It’s hard to know what’s most appalling about this ignorance:
- The chairmen don’t know how their hospitals perform on standard quality measures, information that is available to anyone on the Internet.
- The chairmen don’t know what “typical” performance is—also available on the Internet.
- No one has bothered to share this information with the people who bear some responsibility for their hospitals’ performance or, worse yet—
- The chairmen don’t care.
The Baldrige Criteria ask how you evaluate the performance of your board members. I would add questions about how the board reviews the hospital’s quality…
12Feb2010 | Steve George | 0 comments | ContinuedFixing the Financial System
How does your organization review and achieve accountability for management’s actions? For fiscal accountability? For transparency in your operations? For protection of stakeholder and stockholder interests?
If every financial institution in the U.S. had been forced to answer these Baldrige questions honestly and accurately in the past few years, and if regulators had been verifying their responses, the financial crisis and the bailout it triggered could have been averted. Either they would have had processes in place to deliver ethical and effective leadership or their irresponsible practices would have been exposed.
“I think the last two years have revealed the single largest failure of senior management in the financial sector, and of the board system in American history,” wrote Bo Cutter in new deal 2.0 (November 24, 2009). Cutter has been a managing director of Warburg Pincus, a global private equity firm, and led President Obama’s Office of Management and Budget transition team. Considering the savings and loan crisis in the 1980s and 1990s and the scandals involving Enron and Worldcomm earlier this decade, one could argue that senior management and boards of directors in the financial sector have been failing miserably for thirty years. One could also make the case that the…
4Dec2009 | Steve George | 0 comments | ContinuedExcessive Executive Compensation Derails Excellence
I’m certainly no expert on executive compensation, but I believe there are two reasons that paying executives exorbitant salaries, bonuses, and stock options is bad for business. The first is ethical. The second is cultural.
An article online at the Wall Street Journal today stated that “pensions for top executives rose an average of 19% in 2008, with more than 200 executives seeing pensions increase more than 50%.” Yet, as Ellen E. Schultz and Tom McGinty write in “Pensions for Executives on Rise,” “Executive pensions rose even as the share prices at the companies declined an average of 37% in 2008 and many firms froze employee pensions and suspended retirement-plan contributions.” And cut employee benefits. And laid people off.
That’s an ethical issue. It’s a moral issue. The Economic Policy Institute stated that the average CEO of a company with at least $1 billion in annual revenue makes 262 times what the average worker makes. I’ve heard all the rationalizations for this but they miss the point: Companies pay their CEOs these outrageous amounts because they have passive investors and servile directors who rarely question the conventional wisdom of paying a leader 262 times more than other employees. Very few have the courage to break…
4Nov2009 | Steve George | 0 comments | Continued
