Our Board and it’s Governace

Board and its Governance

One of 123 Up And Adam, Inc Core Principles is to Govern the organization and do it right! 

I will begin with the components of 123 Up And Adam, Inc Governance Operating Model. The organizations Governance Operating Model defines the mechanisms and interaction points by which governance will be implemented. The model should enable the board and executive leadership to organize these mechanisms and points of interaction across the organization’s business lines, legal entities, and jurisdictions. The organization has started to explore the enterprise-level model which can be adapted to any functional or operating area to promote effective implementation of governance.

The governance operating model consists of four main components:

Structure

Included’s organization design and reporting structure, committee structures, and charters, and control and support function interdependencies.

2. Oversight responsibilities, which define board oversight responsibilities, committee and management responsibilities, accountability matrices, and management hiring and firing authority.

3. Talent and culture, which enable the behaviors and activities needed for effective governance by establishing compensation policies (particularly regarding incentives), promotion policies, business and operating principles, performance measurement and management, training, and leadership and talent development programs.

4. Infrastructure, which comprises governance and risk oversight policies and procedures, reports, measures and metrics, management capabilities, and the enabling IT and communications support.

Each of the four components of an effective governance operating model contains a series of role and responsibility issues to be addressed:

Board oversight and responsibilities—The board carries out oversight responsibility across the organization in areas such as business and risk strategy, organization, financial soundness and regulatory compliance. In this regard, the governance operating model should help the board to:

  • Articulate the skills and knowledge it requires to effectively execute its oversight responsibilities and to assess its composition against those needs.
  • Engage management in providing the information the board requires to exercise governance and risk oversight.
  • Advise management on policies that ultimately influence the manner in which governance is conducted.
  • Understand governance activities that occur at various levels within the organization and support management in its efforts to enhance program efficiency and effectiveness.

Committee authorities and responsibilities—Effective board committee and management committee structures can help define the number, terms and qualifications of members, committee responsibilities, reporting and escalation mechanisms, and ways in which board and management committees will interact. For example, for a management committee, the model could:

  • Include committee charters that define the committee’s responsibilities and address linkages connecting the committee, the broader executive team and the board of directors.
  • Define the types of decisions, investments, events, risks and other items that should come to the committee’s attention (and, when applicable, thresholds or amounts).
  • Delineate methods of escalating and reporting significant matters to the appropriate person or committee.

Organizational design and reporting structure— 123 Up And Adam’s organizational design and reporting structure will need to be, clear our organizational structure will define the reporting lines for decision-making, risk management, financial and regulatory reporting, public disclosures and crisis preparedness and response. This will help our leadership to:

  • Establish the authority of the control functions of compliance, risk, legal, finance and audit.
  • Define a process of overseeing the spectrum of risks, including strategic, operational, market, credit, liquidity, legal, compliance, property, IT, reputational (etc).
  • Maintain a governance structure that is understandable.

Management accountability and authority—Well-understood authority and accountability for key responsibilities are needed at all levels and areas of the organization. A sound governance operating model could:

  • Balancing our strategies by delineating the authority and accountability for key roles and specifying a process for resolving disagreements.
  • Balance the decision-making authority of business units against that of risk managers, such that risk tolerances and exposure limits are set and observed and risk managers have the authority to challenge those who are taking the risks.
  • Define clear decision rights such that people understand the authority—and the limits of the authority—associated with their positions.
  • Provide direction to control functions to assist overseers in determining that businesses are managed within appropriate limits on both a global and regional basis.

Performance management and incentives—Goals, performance measures, compensation, and incentives should reflect an organization’s overall commitment to governance as well as principles of asset preservation and risk-taking for reward. In this area, the model should help the board to:

  • Establish performance objectives that balance asset preservation and risk-taking in the pursuit of value creation.
  • Align incentives to reflect a balance between asset preservation and risk-taking.
  • Specify qualifications and performance evaluations that establish and reinforce the desired corporate culture and tone at the top.

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