A Modest Governance Proposal for the Age of Regulation

Society venerates rule-breakers and mavericks, but innovation cannot be an excuse for lawlessness. Allow me to draw a parallel: in conversation, I recently referred to a very gifted yet socially awkward acquaintance as having immense value to a business as long as people didn't mind the fact that he 'didn't watch his feet while he was dancing'. 

This was the kindest way I could find to imply that very good things could happen, as long as one didn't mind that the good things might come with a side-order of mildly-offended colleagues and customers. In other words: as long as the results are good, it doesn't matter how you got there. 

In a Start-Up or rapidly-scaling business, I've often seen that as long as business aims were achieved, it didn't matter if the rules went by the wayside sometimes. Or a lot of the time. After all, nobody really has time to step back and check that they didn't tread on any toes while they were dancing the 'ensure the survival of this business' polka.

Today it's clearer than ever that businesses need to achieve results while at the same time respecting their impact on our well-being and safety, our legal rights, the environment, and other such unprofitable yet vital concerns. The dance is a pleasing metaphor, but in real life, the trodden-on toes are all potential law suits, bad press and a loss of reputation. One does not have to look far to find examples of companies that scaled rapidly and danced all over people's rights and now find themselves scrambling to convince the public of their bona fides.

So what is the solution to that most compelling driver of human behaviour, greed? Is capitalism ultimately doomed because we will destroy ourselves and each other to achieve growth? Is the cure for that greed a command economy, 5-year plans and punishment for the conspicuously successful?

Let's not delve any further in that direction because the answer is, to those who have read a history book or two, obviously and emphatically 'no'. Instead, the bulwark against our natural tendencies should be effective governance.

This is not the same as red tape, whereby a fetid tide of rules, sub-clauses and bureaucracy engulfs and overwhelms an organisation and the individuals within. Red tape empowers fiefdoms, fuels petty inter-departmental rivalries and encourages buck-passing. 

Nor is it the same as having a 'Governance, Risk and Compliance' (GRC) department, where the sheer size and value at risk, as well as regulations, oblige a company to spend money on permanent resources to tackle risk. Not every company, and especially not start-ups, have the resources to assign permanent staff to monitoring risk and ensuring compliance. 

Instead what I propose is a system of "Governance as a Service".

In such a delivery model, firms consume as much governance as they require in proportion to their risks. Advice is objective, independent and not subject to interdepartmental conflicts. Business stakeholders are able to concentrate on executing the business' objectives without having to 'watch their feet' all the time. Investors can be reassured that risk is being reduced, that a modern, compliant business culture is being created, and that reporting is transparent. 

In practical terms, once a business has decided that governance has value, which is not always a given, "GaaS" provides a way to make proper Governance consumable, affordable and a valued source of objective insight into how the business is functioning along a series of metrics that do not necessarily fit a profit/loss model. 

Over the past year or so I have assembled a formidable team that is capable of delivering this vision. I'd love to talk to business owners, investors and operational folk as to how these issues are affecting them, and how their management teams are responding. Let's see if we can make governance less of a burden and more of a catalyst to doing good business.