What is a governance code?
The governance code is a document that contains all the principles and rules for managing the organisation. It is a kind of written corporate constitution that is necessary for the group to set the framework for collective functioning.
In traditional hierarchical governance, there is no need for such a code, because the only rule is simple: the boss is always right. In collaborative governance, we seek to replace this rule with something that allows the organisation to best manage the complexity of the world we live in, making the most of the human potential within it. This new way of doing things introduces a certain complexity that needs to be made explicit so that everyone feels secure within a clear framework.
In the context of the transformation projects that we carry out with our clients, we help them to find the right balance between the need to establish a structuring framework and respect for the fundamentals of collaborative governance, which are meaning, autonomy, inclusion and the personal development of each individual. Thus, minimalism and pragmatism are certainly key words when it comes to a governance code – it’s about keeping constraints to a minimum and leaving as much room as possible for common sense.
Is the governance code mandatory?
Every system develops its codes and rules to govern life together. The same is true for organisations and companies, with the difference that some of them clearly establish the framework, while others live it implicitly. In collaborative governance, the codes and rules must be explicit to enable everyone to understand the game they are playing and to help set the framework that will guarantee their autonomy (a framed freedom).
As long as the overall framework remains implicit, it is subject to the free interpretation of each individual – in particular the management in place. Thus, if the organisation promulgates employees’ empowerment and autonomy, but allows a framework to impose itself instead of ensuring that it is explicit and co-constructed by the collective, old reflexes linked to the old way of operating inevitably resurface and create a mode of governance that is deleterious, in spite of the probable good intentions.
When is the best time to write a governance code?
An organisation can look at its governance code at any time. However, when an organisation is embarking on a transformation, it is imperative that this work is carried out at the beginning of the project.
It is not necessary to write a complete and perfect document in order to move forward, the organisation needs a basis that includes, at the very least, the objectives of the transformation process as well as the main principles of collaborative governance in the light of which it will build everything else.
As it establishes its governance code, the organisation should start with the objectives it wishes to achieve and the purpose it wishes to embody in its transformation, and then sediment its application to the whole workforce, explaining, among other things, how to manage autonomy in the workplace and how to create more authentic relationships between employees.
Who is responsible for creating the governance code?
The initiative to create a governance code should always come from, or be directly supported by, the top management of the organisation. Once the process has been launched, a multi-disciplinary and transversal transformation group that represents the diversity of the organisation (age, gender, seniority, expertise, department, hierarchical level, etc.) should be mandated as soon as possible to start drafting the code in practice.
This group establishes the governance code and monitors its evolution over time using collective intelligence methods.
At Phusis, we systematically advise people to draft the organisation’s governance code. This is a complex task that requires the help of people who have already done it several times and who know what to include, so that the code is, on the one hand, adapted to the real needs of the organisation and, on the other, coherent, sufficiently complete and actionable.
Once the transformation group has drafted the governance code, it must translate it and make it live in the organisation. In order to do this, it generally needs help to set the framework that allows everyone to better visualise the transformation process, to anchor it in the operational reality of the employees, to create confidence in the project and to encourage autonomy.
What are the key elements of a good governance code?
Does the governance code have a legal value?
There is no legal framework for governance codes. The latter can be informal or formal, i.e. signed and adopted by the organisation’s executive committee or board of directors. Ideally, one should move towards a formal document. By doing so, the CEO declares his or her authority to a governance system, and formally distributes and commits the responsibility of the entire organisation.
The governance code is similar to the work rules, but they are still two different things, in terms of their legal value, the way they are drawn up and their application in the organisation. On the other hand, the governance code must be respected in the same way as the labour regulations, otherwise the whole system will be undermined.
For example, a company wants to introduce management by trust. This will result, among other things, in its workers having free access to the premises where all the equipment is located. This freer approach allows everyone to save time, but also to increase their autonomy and efficiency, on the condition that the borrowed equipment remains within the company. If a member of staff fails to do this, it destroys a system based on trust, and this must be dealt with in a way that is commensurate with the issue at stake: it is not about a pair of gloves, but about the whole system of trust.
When the code of governance is not respected (in terms of modalities or expected behaviours), there are several ways to deal with the situation, the trick is to plan for them. It is possible to assign a specific role, one of whose main responsibilities is to ensure compliance with the governance code. This role will have the authority to restore corrective, dissuasive or even punitive practices in line with the key elements of the governance code.
In the most extreme cases, it is not out of the question for the organisation to part company with employees who do not fit into the organisation’s purpose or governance. A collaborative organisation must also be able to make difficult decisions.
How to implement collaborative governance in practice?
Implementing and adopting the governance code requires a great deal of support: a change in culture, but also in posture. At Phusis, we generally offer collective and individual support for the more structural roles.
As part of the adoption journey, each employee of the organisation spends 10 to 15 hours with one of our consultants.
- The first step of the journey is to make the organisation’s members aware of the transformation process (in other words, we explain why the change is necessary). To do this, we will take up the objectives and the main principles initially defined in the code of governance in order to question them with the employees, but also and above all to anchor them in their individual reality.
- The second stage concerns the method, how to transform. At this stage of the journey, we address, for example, the issue of autonomy at work, how it can work, how to appropriate it. This type of exercise is then concretised through the constitution of groups (called circles), which will, according to their specific needs, design and decide on their own mode of functioning (roles, responsibilities), always in line with the overall framework of the organisation.
- The third stage of the journey focuses on helping people to discover and implement the coordination mechanisms of collaborative governance in practice. For example, we will lay the groundwork for the conduct of so-called “tactical” and “governance” meetings (What are they for? How do they work? When should they be held?). In order to ensure that the coordination mechanisms linked to these meetings are well assimilated by the members of the group, we will initiate the first meetings and facilitate them. Then we train the people who occupy the coordination roles in the groups, so that they apply them autonomously. Finally, when the training of the different roles is completed, we offer additional coaching to help the groups define their local cultural context, i.e. how they relate, at their scale, to the framework, values and purpose of the organisation. This usually results in the drafting of a team charter.
- The fourth and final stage of the group coaching journey is to organise collective ‘feedback’ sessions to share experiences and identify good and bad practices.
These coaching journeys last on average 6 months per circle (depending on the time and resources allocated) and require a significant investment from the employees in the process of organisational transformation, of the order of 10% of their working time at the peak of their involvement. In large organisations, we conduct these journeys in successive waves, which allows regular learning between waves and a manageable transition for the organisation. A complete journey for a large organisation is thus spread over several years.
How does internal communication play a key role?
All this support cannot be done without strong internal communication. This role must exist, it is crucial in many respects. It allows the approaches to be demystified by popularising certain concepts, to engage in conversation with employees, to approach the transformation from different angles and to diversify the ways in which the new organisational, cultural and individual schemes are adopted, etc.
The communication tools that will be used will also promote cohesion within the teams.
We have seen clients demonstrate creativity with :
- Flash news and thematic newsletters dedicated to the transformation project;
- Game cards to facilitate the understanding of roles and decision making;
- Video clips highlighting testimonials, practical advice or simulations to enable everyone to activate concrete levers;
- Online games and quizzes to assess the progressive assimilation of the new governance mode at all levels of the organisation;
- Lunch & learn sessions during which teams that are more advanced in their transformation journey answer the questions of teams that are just starting out, discuss the difficulties encountered and explain the solutions implemented (all in a friendly atmosphere);
- An internal radio station that creates links and brings the current project to life on a daily basis with interviews and reports from different sites or departments within the organisation.
The governance code is an imperative for the transformation of your organisation. It is both the basis and the framework that you will use to make your project a reality with all your employees. The creation of a governance code must be driven by the organisation’s top management and then be co-constructed by the internal transformation group in charge of the project, the experts who accompany the various teams in their transformation and, of course, the employees. Although this document has no absolute legal value, it must be respected by all members of the organisation or the transformation will be jeopardised. Each organisation is unique and so is its governance code. Nevertheless, there are certain elements that must be included, which is why it is essential to surround yourself with people who will be able to help you integrate them, but also to anticipate the possible difficulties that could arise when you move on to the concrete application of your governance code.