In the first article in this series (here) I described why ensuring consistent information about how the business is operated and what standards are expected to be met is part of the ‘common language’ required for effective corporate governance and why it is essential to safe and efficient business operations.
Establishing and communicating a simple governance document hierarchy in your organisation supports better corporate governance by creating a shared understanding of the key tools used to embed corporate culture, establish strategic priorities, maintain business operations and to control risks.
Every business function and discipline in your organisation should have a suite of high quality, plain English governance documents which describe how they operate and are easy to locate by any business user who needs them.
The key to using any heuristic approach is to understand that you are creating a mental model for business users – a set of simple mental shortcuts that allows people to solve problems and make judgments quickly and efficiently. When creating new governance documents or reviewing or revising older governance documents, authors and reviewers should be able to use the model to easily determine:
What the purpose of the document type is (Why, What, How or With)
How the document relates to other governance document types by supporting a parent document or being supported by child documents in the same subject area
Where there are logical inconsistencies or contradictions in related documents
What content the type of document should contain to be fit-for-purpose
What content should be excluded to reduce complexity
Good quality governance documents communicate why, what and how the business operates and provides the tools for business users to work with as they execute the organisation’s business processes in their daily activities.
Tier 1 Documents – Policies explain ‘WHY’ we are going to do something.
Policies are the top tier of the governance document hierarchy. Organisations should have a limited number of policies that address the ‘big ticket’ items for which clear corporate governance is required. These top-tier policies commonly cover the tangible and intangible assets of the organisation and topics which are subject to legislative or regulatory control including but not limited to Health & Safety, Finance, People, Information, Technology, Plant (physical assets) and Codes of Conduct.
An organisation’s set of corporate policies clearly communicates to both internal and external stakeholders what the strategic priorities of the enterprise are. Policies take precedence over all other governance documents and apply to everyone in the organisation. In summary, Policies:
Describe and communicate the strategic priorities of the organisation
Define the professional and ethical expectations for all employees
Contain principles which are statements of fundamental truth that serve as the foundation for behaviour or for a chain of reasoning.
Governance documents should not exist without a parent Policy.
All Policies must have supporting Standards, Procedures and data capture tools such as Forms and Templates to ensure that the statements and principles contained in the Policy can be operationalised.
Each subsequent tier in the document hierarchy (Standards, Frameworks, Strategies, Procedures, etc) must be able to identify its ‘parent’ Policy as its raison d’etre. This ensures that governance documents remain relevant to business operations. It also reduces the need for content duplication (each document has a reason for existing and its content is on point).
Well designed and curated governance documents don’t become part of a miscellaneous collection of orphans that create uncertainty, add complexity to the user’s experience and undermine the organisation’s corporate governance effectiveness.
Tier 2 Documents – Frameworks & Standards define ‘WHAT’ we are going to do.
Frameworks support or expand upon a related Policy or Standard by outlining the major components of a conceptual model or system (i.e. Health and Safety Framework or Enterprise Risk Management Framework). Frameworks reference and provide overarching context for Policies, Standards and other related governance documents to present a mandated and coherent approach to a business problem or activity. A Framework defines and often illustrates graphically the inter-connectivity of all or some of the following – business processes, inputs / outputs, key stakeholders, key relationships and logical decision points.
Standards are determined by the Executive (C-Suite), Board directive, or external requirements such as legislation or regulation. Standards include mandatory requirements which apply across the enterprise. Standards articulate the technical ‘business rules’ which govern what should happen by identifying minimum operating requirements in a prescriptive manner. Some organisations consider Charters as Tier 2 documents because they describe the delegation of authority, accountabilities, responsibilities and decision rights of governance groups within the enterprise.
Tier 3 Documents – tell the business ‘HOW’ we are going to do something defined in a Policy, Standard or Framework.
Tier 3 documents are ‘how-to’ documents which may apply to the whole enterprise or to specific business functions or areas. Strategies and Plans are Tier 3 documents created to articulate and achieve long term business goals and objectives. Specifications, Handbooks and Manuals expand a Standard, Strategy or Plan into an explicit set of technical requirements, activities or designs. Plans and Roadmaps contain a defined set of objectives, actions, time frames, performance measures and deliverables.
Procedures identify steps or tasks in a business process or activity. A Procedure supports a related Framework or Standard and contains a specific series of actions or operations to be completed in a particular manner. A Procedure may be further expanded into a set of detailed Instructions.
Process Maps are the graphical representation of business processes.
Tier 4 Documents – are the tools we work with to ensure the things in Tier 1-3 governance documents can be implemented.
Instructions include a specific set of steps which must be followed, often in sequence, to execute a Procedure. Guidelines are less formal or prescriptive and provide a set of recommendations which represent best practice. Forms and Templates are used to capture data as business records or evidence or to format information for future use or further processing.
Navigating between Tiers
An important feature of the Governance Document Hierarchy is the concept of logically connecting governance documents vertically as well as horizontally. Horizontal integration allows a user to quickly access one governance document from another where the two documents are conceptually related. Vertical integration ensures that business users are aware of policies and their related governance documents in the document suite enabling the user to easily follow a policy and its chain of reasoning to its operational outcomes.
The ability to quickly and efficiently link both horizontally and vertically between related policies and the supporting governance documents is a critical feature of any organisation’s Corporate Governance maturity.
Document Numbers and Permanent Hyperlinks
The use of a consistent document numbering schema coupled with permanent URLs (such as DOC_IDs in SharePoint or similar) which are associated with a governance document as a content object across all of its versions ensures embedded hyperlinks in related documents stay current even when the linked document is updated. It also maintains linkages to the document if there are typos or small changes in the title of the document.
Using a consistent document number and permanent URL as the key navigational device vastly reduces the amount of work required to manage and maintain the governance documents as a collection. This approach ensures references in related documents or on any related web pages where a document may be referenced don’t have to be located and manually updated every time a governance document is reviewed or revved up. Permanent URLs also ensures that horizontal and vertical contextual integration is retained enhancing the quality of the governance document suites for individual disciplines.
Governance Document Management
Coordinated governance document management means reducing the silos and separating complex multi-purpose documents into discrete, well-crafted policies and supporting documents creating a corporate governance tool set which can be quickly located, easily understood, consistently referenced and efficiently maintained within the broader enterprise Corporate Governance Program.
This model works for me and I have applied it successfully in several different contexts. However, while the names of the governance documents in this model are common and deliberately generic, there may be some local variations that are industry or organisation specific and you will have to adapt it accordingly.
At an enterprise level, applying any model means changing people’s behaviours – whether it is redefining what they call certain types of documents or changing who can create and approve certain types of documents to ensure the right accountabilities.
Change always causes some degree of disruption but it is worth it as you create the common language for governance required for an organisation to act as a single enterprise.
Irrespective of the final set of governance document types you decide on for your organisation, the purpose of each tier (Why, What, How, With) is logical and should be consistently applied. There should also be clear horizontal and vertical integration between documents that comprise a ‘governance document suite’ (i.e. Health and Safety, Finance, Information Management, Technology or Risk Management etc.) enabling a business user to follow an idea or concept, a chain of reasoning or a set of prescribed behaviours through to its practical application to business operations.
In my next article I will describe the Decision Rights Framework (Approvals and Accountabilities) required to implement an effective Governance Document Hierarchy as part of a Corporate Governance Program.
Carol Feuerriegel, IGP, Intel Leader – Information & Knowledge; GM, Information and Knowledge at Inland Revenue NZ; Advisory Board Member Information Governance ANZ