Yes, we all know that governance is a critically important aspect of business; it sets out how the firm is to be run, delineates responsibilities and generally keeps us all on the straight and narrow. It is also one of the media buzz words this month as the Global Downturn deepens. I counted some 5000 references to Governance in the London Times this month.

Interestingly, there is a comparison of the governance styles favoured by firms in the United Kingdom (UK) and Europe and between UK and USA [see http://business.timesonline.co.uk/tol/business/
industry_sectors/banking_and_finance/article5983510.ece ]. It turns out that in UK, businesses are structured around a single level Board of Directors with the non-executive Directors providing breadth and external perspective for the executive Directors. This model was advocated by Sir Richard Greenbury when he did seminal work in UK on the subject some 15 years ago. His ideas lead to what the Times called the gospel of the non-executive director as the guardian against executive excess. This single level structure has served industry well but depends on having well qualified and experienced non-execs, a commodity in short supply world-wide right now.

In our troubled times, he now advocates the continental-style two-tier board exemplified by Philips, the Dutch electricals company on whose board he now sits. In an interview with the Times, he said the system of board guidelines and rules introduced by Sir Adrian Cadbury in 1991 and reinforced by his own report in 1995 and the Higgs review (2003), needed reform. While Sir Richard was referring to recent developments in the banking system, there are clear parallels with the world of project management.

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