Over the last year, I've been representing CIMA on Tomorrow's Good Governance Forum.  This was formed in March 2010 by Tomorrow's Company in response to questions raised about the effectiveness of corporate governance.  The Forum brings together a number of key companies such as Marks and Spencer, HSBC, organisations and individuals to explore what good governance means and to make practical recommendations to company boards and policy makers. This has involved some interesting meetings with insights from leading businessmen such as David Tyler FCMA, Chairman of Sainsbury's and Logica and winner of CIMA's Outstanding Contribution to Business Award, 2010 as well as Sir John Egan and Lord Myners. 

But the Forum is anything but a talking shop.  True to Tomorrow's Company's ethos as a think and do tank, we've also been working hard all year to translate what we learn into practical guidance. Our first report was officially launched at a conference on 9 March Beyond regulation: improving corporate governance and beyond and it champions the concept of a 'mandate'.  So what's a mandate then?

As Tomorrow's Corporate Governance - the case for the board mandate says, a mandate captures the essence and character of the company in terms of its essential purpose, its aspirations, the values by which it tends to operate, its attitude to risk, safety and the environment, its culture, its value proposition to investors and plans for development.  Phew.  It is a living statement about what the company stands for and how it wishes to be known to all its stakeholders.  It's much more than a mission statement in case you were wondering.  But it's fair to say that a lot of the information probably already exists in the company in different forms such as strategic plans and codes of conduct.  But what the mandate does is pull all this together in an integrated way that helps to inform decision-making.  The concept is being well received by company chairmen as a valuable tool to aid board effectiveness. As one leading chairman has pointed out, the problem is not that the information does not exist, but that you have to hunt and find it.  In his experience, he had never received a succinct overview of what the companies he was being hired to chair were really all about.  And if you don't know that, decisions are possibly going to be all over the place and much more difficult.  He was in no doubt that key tasks of the board such as recruiting a CEO would be much easier with a mandate.  Why?  Because the board would have a much clearer picture in its mind of what the company needed at that time.

Leading governance figure, Mervyn King is an advocate of the mandate concept.  He has remarked that if he asks board members such questions as what is the purpose of the company and what are the three core values that drive the business, he has never been in a boardroom where the answers are the same.  Not a sound basis for decision-making really when you think about it.

So the mandate aims to support decision-making and coherent communication as well as better connectivity between board and management.  It becomes alive when it is used as the reference base for strategic decision-making.  For example, the board has to consider whether to enter a new market.  This will represent a major shift in direction for the company.  As I like to see it, the mandate helps the board to make a decision with its eyes open, even if it decides to make a decisive break with the past.  So it might decide not to proceed with the venture because its mandate makes it clear that organic growth in a small number of existing markets is the preferred route to development.  On the other hand, it may decide that circumstances have shifted in such a way that the new strategic direction now makes sense.  If nothing else, the mandate has provided a framework or pause button to inform the debate and help to prevent irrational exuberance.

We had much lively debate at the conference about what the mandate was, how you do one and how it relates to the rest of the company.  Some participants gave examples of policy documents in their organisation that amounted to what the forum is calling a mandate.  Current work is focusing on dialogue with company chairmen and collecting case study material, but in the meantime,  I'd be very interested to hear your views on the concept and in particular, whether your organisation uses frameworks or policy documents that are similar to the mandate.  Do you think it would help you be more effective in your role if you felt that your board was all facing in the same general direction?