'A sharper focus in the boardroom locates potential time bombs'.
| Author | Babber, Gulzari |
| Position | A word from the president |
At a recent CIMA event, I asked a senior finance professional what challenges he was currently facing at work. Without hesitation, he said one of his major headaches was the difficulty in getting a clear picture of his function's effectiveness because there were so many layers of administration and management. This troubled me. Effective leadership requires a "clear line of sight" across an organisation. "Blurred vision" can be catastrophic.
This conversation came back to me as I recalled some of the major scandals that have hit the news here in the UK over the past year or so. The financial services sector was again rocked when three banks were found to have been attempting to rig the London inter-bank lending rate.
The British media received a drubbing when the Leveson Inquiry revealed that the illegal phone-tapping of the great and the good by journalists at News International had been widespread. And towards the end of last year, the director general of the BBC was forced to resign after the organisation mishandled the reporting of a child abuse controversy.
Underlying all these events was a common theme: a claim that the people at the top didn't know what was going on. Many commentators did not buy this line. In such cases, they said, ignorance was no defence. But with the shift towards globalisation, it's fair to say that many organisations are now so complex that it has become difficult for boards to obtain the oversight needed to ensure that the right decisions are being made on the front line.
Businesses have been grappling with this issue for some time. On an administrative level, there has been a significant push towards concentrating routine processes in shared service centres, either in-house or outsourced. This has reduced risk as processes are standardised and can be continuously and uniformly improved.
Many organisations are also moving to "flatter" structures, with fewer layers of management. This requires the remaining managers to have a wider span of control and thus presents challenges for performance management. Roles, responsibilities, objectives and reporting requirements have to be made clear; new performance metrics and reporting systems are often necessary.
These...
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