Trust in business is at an all-time low1). Trust in governments is rock bottom as well. At the same time, huge challenges remain to create sustainable societies. What to do? A new project to develop a standard for organizational governance could help, and has just been given the green light.
We don’t need to go far back in history to see how bad governance can ruin lives and tarnish industries. Enron and Lehman Brothers are just some of the names that spring to mind, contributing to an increasing expectation from society for the heads of businesses to be accountable for their organizations. While laws and regulations are necessary foundations, truly good governance that takes organizations to new levels of performance over the long term goes far beyond the law to instil trust and effectiveness.
In this context, ISO’s committee of experts that specializes in governance (ISO/TC 309) has just been given the green light to develop an ISO international guidance standard that will help organizations establish good governance practices, going beyond the avoidance of risk and contributing to their long-term value overall.
Axel Kravatzky, Co-Convenor of the working group that is developing the standard, who was appointed by TTBS, ISO’s member for Trinidad and Tobago, said:
“There are many governance standards out there, yet there are currently none that are applicable to organizations that span all jurisdictions, industries, sectors and types.
“With increased connectedness and interdependence, the importance of this is rising continuously. This standard will therefore fill this gap in standardization, allowing it to be accessible and useful for any organization, whether it crosses different sectors and geographies or is simply a small business that feels it can benefit from better governance.”
Victoria Hurth, Co-Convenor of the working group, who was appointed by BSI, ISO’s member in the UK, said: “The benefits of good governance are well evidenced. As well as reducing the risk of bad surprises that can destroy an organization, a well-governed organization is more trusted and attracts talent, which in turn drives performance and investment. The proposed new standard has the potential to increase the number of socially, environmentally and economically sustainable organizations, providing multiple benefits for investors and society as a whole.”
The new guidance standard for the governance of organizations is due to be published by 2020.
1) 2017 Edelman Trust Barometer