BSI, the business standards company, has launched a new standard to help businesses of all sectors and sizes, implement good governance. This allows the rules for how businesses function, to be set in place and are the basis by which an organization is directed, controlled and measured. BS 13500 Code of practice for delivering effective governance of organizations was developed with such experts as the Commonwealth Business Council, Cabinet Office, Institute of Operational Risk, UK Policy Governance Association and consumer interest groups to name a few.
Governance failings of recent years such as the financial crisis of the late 2000s are well-documented but valuable learnings have come out of these errors. Fallout from such events shows the demand for identifying good governance. It is not just about decreased productivity and morale, but reputational damage and diminished confidence.
All successful businesses are built upon trust and any breaches will result in damage that can take a long time to repair. Tim George, Deputy Company Secretary at Carillion the integrated support services and construction company, is currently using BS 13500. He says, “Organizations need to have positive differentiators to set them aside from the competition. Confidence in the quality of an organization’s governance is a key differentiator.”
Major lapses at the heart of organizations do not just lead to decreased productivity and morale, but cause reputational damage and loss of trust. BS 13500 aims to alleviate such failings by enabling businesses to have clear accountability for their actions. It can help minimize risk and will positively impact businesses by helping them be prepared for all eventualities and to achieve success.
BS 13500 framework is a non-prescriptive document set to help directors, managers, heads of governance, compliance, corporate social responsibility and risk, as well as trustees and owners to identify what they need to practise good governance.
Michael Faber Chairman of the Governance Committee at BSI and Member of the Executive Committee at the Institute of Operational Risk says, “Governance is key to the long term success or failure of any organization. BS 13500 can raise the profile, understanding and effectiveness of governance, providing a standard of practice that can be consistently applied for all.”
BS 13500 applies to all businesses regardless of their size or sector and is of particular value to SMEs. It encourages them to feel more confident about taking advantage of opportunities via measured and not reckless risks, helping restore confidence in UK enterprise and attracting growth. BeecherMadden recruitment agency operating in the governance and risk space used BS 13500 for this purpose. Karla Jobling Operations Director says, “As a growing business, attracting the best staff is a key issue for us. Anything we can do to demonstrate why we are a great company to work for, helps with that.”
Despite many codes and guidance being available, there was no harmonized standard dealing with the fundamentals of good governance that was applicable to all types and sizes of organization. BS 13500 bridges this gap. It provides detail about the important principles behind sector-specific guidance such as distinguishing different accountabilities to different stakeholders. It acts as a check list for organizations to use to demonstrate externally that they are on the right track and set expectations for the business to all stakeholders.
Key benefits of BS 13500:
- Improved and sustained growth
- Greater directional control at upper level
- Increased staff confidence and engagement in their roles
- Clear view of how the business operates
- Defined benchmark for governance