Shareholder Alignment and Risk Management                    

For Directors, two important aspects of good governance attach to ensuring alignment of the enterprise with Owner or Shareholder needs, and to managing risk – declining market share, potential loss of key people, disintegration of a relationship with an important Partner, managing corporate social responsibility?

Poorly chosen indicators can lead to disaster.

For example, in each of the following cases, leadership were rewarded for good performance, as the same time as their enterprise was either losing ground rapidly or going out of business:

95% Customer Satisfaction
payroll costs reduced by 10%
major increases in market share
huge quarterly sales increase
major acquisition achieved
new product based on genetic technology launched on market

Which indicators should the Board have used, to alert them to the real state of their enterprises?

Close Window