29 July 2020 by Sara Drake
The Chartered Governance Institute has undergone significant change over the last three years.
At the end of July, John Heaton will step down as President of the UKRIAT Division after three years in the role. He will be succeeded by the current Vice-President Victoria Penrice, who has been a member of the UKRIAT Committee since 2014.
In the three years that John has been at the helm, the Institute and the external world in which we operate has undergone a period of considerable change. There have been turbulent times in global politics, the #MeToo and #BLM movements, and now the globe is in the grips of COVID-19. In terms of governance, the world has witnessed numerous corporate scandals, ranging from the largest construction bankruptcy in British history to the Facebook-Cambridge Analytica data scandal. We’ve seen Danske Bank embroiled in a money-laundering scandal, powerful figures like Harvey Weinstein exposed for sex crimes, Equifax data breaches and the arrest and flight of former Nissan boss Carlos Ghosn. Not to mention scandals around doping, corruption and athlete welfare in the world of sport, as well as scandals relating to university remuneration, executive pay and related party transactions in academy trusts and the Oxfam overseas aid scandal that rocked the charity world.
On the legislative and regulatory front, it has also been a busy three years. The UK Corporate Governance Code was revised to broaden the definition of governance and emphasise the importance of stakeholders, purpose and culture, board diversity and proportionate remuneration. The Institute was actively involved in shaping the new Code, along with the Wates Principles for private companies, which encourage key behaviours to secure trust and confidence among stakeholders and benefit the economy and society in general. There have been three reviews into audit and now the Corporate Insolvency and Governance Act to tackle the impact of COVID-19, in all of which we were involved to a lesser or greater degree.
We’ve had GDPR, the introduction of a college insolvency regime, the establishment of the Office for Students as the independent regulator of higher education in England, and a new version of the Charity Governance Code, something in which we were heavily involved. There have been consultations with the Pensions Regulator and our own consultation into board evaluation for listed companies. The world of governance evolves at pace.
I have valued John’s support hugely since my arrival and benefitted from his insight and perspective. I asked him recently for his thoughts as his term as President comes to a close. Reflecting on those three years, John commented: “If there is one factor which has dominated the period, it is the inexorable growth in the realisation of the importance of a focus on economic, social and governance issues across all types of organisations with which the Institute works, and that underlying trend is reflected in many of the initiatives listed above”. Asked whether he thought that this would continue as those organisations grapple with the impact of the pandemic, he said: “Yes, if anything I see the focus being even sharper, as their response and performance, during and after the crisis – and contribution to the recovery – is scrutinised”. He went on: “The Institute can be part of that response, identifying good practice and helping to share it across our members and other governance professionals, who we want to get closer to, to raise the bar. We can do this, not only in the United Kingdom and Ireland, but in other countries where we are represented, and working with colleagues in other Divisions of the Institute, which is a truly global organisation”.
When we discussed what the greatest challenges are likely to be going forward, he said: “It is stating the obvious that adapting to the post-pandemic world (or indeed coping with its continuing presence) will be the focus for all organisations, whether commercial, charitable, sporting or educational. Redundant income streams will need to be replaced, new ways of working will become commonplace, both out of choice and necessity, and corporate agility and imagination will be needed to significantly adapt business models. This applies not only to those we work with, but also to the Institute itself. Communication with members and shareholders, and other stakeholders, will be of paramount importance to explain and get buy-in for those changes. Done well, that process will involve good governance, and we should be at the heart of that”. John’s period of tenure has also seen considerable change at an Institute level. Not only has he welcomed me as a new chief executive, he has also helped to bring in a new name for the global institute, which the UK, Republic of Ireland and Associated Territories Division subsequently adopted, along with the Chartered Governance Professional designation and Affiliated class of membership. There has been considerable investment in the future of the Institute, with the acquisition of ProShare, the creation of new branches and the UK Student Forum, and improvements to our digital capabilities. We have also introduced a Competency Framework for Governance Professionals and launched the new Chartered Governance Qualifying Programme and Foundation Programme. In addition, we have grown our qualifications portfolio, with new qualifications in sport, corporate and academy governance, expanded our UK university partnership programme, developed e-Learning and are introducing online exams. John noted: “My biggest personal disappointment over the last few months has been the need to cancel our Graduation ceremony in May because of COVID-19. This is when we celebrate those who have been members of the Institute for 50 years, those who have been elected to become Fellows and Associates and, particularly the achievements of those who have just graduated after many years of hard graft, studying while balancing this with work and personal commitments. It is always a joy to join the throng of those who receive their certificates, and their friends and families, talking to them and hearing some of their stories. I have been struck on each of the occasions I have attended – six now, not just those when I have been President – by the diversity of those present, women and men from all parts of the world where we have branches”.
We have formed partnerships in a number of key sectors, accrediting the NGA’s Leading Governance Development for Clerks programme, producing guidance for academy schools and sixth form colleges with the Sixth Form Colleges Association, accrediting the first qualification for international financial services regulators in the world, and forming a partnership with Sport England to create the Sports Governance Academy.
As the world of governance has grown, the Institute has evolved too, moving away from the purely technical to consider the behaviours throughout an organisation. We have produced work around stakeholder voices, placed greater emphasis on people and principles rather than processes, and led the way with original thought-leadership pieces, such as our Future of Governance series, which includes The Future of Sports Governance: Beyond Autonomy and Next Generation Governance.
All of the above strengthens our position as the primary authority on governance. I thank John for the support he has given to me since I joined the Institute and for all the time and dedication he has shown, travelling great distances to support our branch network and build recognition for the profession, though he commented that meeting interesting people and enjoying their company has made the period immensely rewarding. He will be stepping down from the role but will continue to be involved in the governance of the organisation as Past President, and has recently been appointed a Vice-President of the global Chartered Governance Institute, working with the incoming President from Australia, Peter Turnbull. The recent turmoil in the world has shown how important governance professionals are in terms of helping to steady the ship and foster trust. John and I look forward to working with Victoria to support and nurture the type of talent that can make a genuine difference throughout the world.