2017 Doctoral research at La Trobe University, Melbourne, Australia, has delivered a breakthrough in the long sought after link between governance practice and organisational performance (Governance of Value Creation: An integrated multi-disciplinary governance model for sustained value creation in large scale organisations).
The approach aligns with, extends and demonstrates effective implementation of Integrated Thinking – the operational dimensions of Integrated Reporting backed by the worlds leading accounting and financial organisations.
And, the research demonstrates the causal link between Governance of Value Creation practices and sustained value-creation out-performance.
The research engaged Directors at nine of the ASX10 (seven at Chair) amongst in-depth interviews with sixty Corporate, Government, Investment and Innovation leaders.
Governance of Value Creation is a future-oriented equivalent to Financial Governance. It enables accounting-style understanding of the (risk and uncertainty mitigated) future value of all of the work of an organisation, a collaborative network, or, a market sector.
- It enables better decision making at board and throughout an organisation, and
- It enables investors to determine the quality of future prospects – through the standardised assessment of the levels of uncertainty associated with future-value (á la JORC)
It enables leaders to assure the ‘Future Fiduciary’ question ‘Are we optimally invested in our own future’. And, it enables consistently enhanced decision-making throughout an organisation in continuous support and optimisation of better future outcomes. The practice enables communication and communities of collaboration on multi-bottom-line (societal, environmental, and other outcomes as well as financial measures) across multiple future timelines.
Governance of Value Creation:
- Enables leaders to run more effective organisations focusing on productivity as the achievement of more valuable outcomes (not just cutting cost).
- Creates organisations that can assess, and reliably achieve value from ideas and the full potential of staff and community.
- Enables investors to value organisations on auditable evidence of delivering the best future prospects (costing future risk).
- Enables governments to engage in social-value outcome stewardship of collaborative action occurring across collaborative networks and markets.
And, it enables citizens to understand, build trust and participate in what their public and industrial institutions are doing and actually achieving towards making a better world.