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The Diligent team
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The importance of recognizing strong governance leaders

September 10, 2019
0 min read
Image of a strong governance leader

Good governance should be a thread that runs throughout your organization. Have you considered whether that statement reflects the culture of your organization and the mindset of your employees? A commitment to good governance fuels today's successful organizations. Strong governance leaders enable and promote the practice of modern governance within their companies. Having a modern governance outlook allows organizations to adapt quickly to changing times, so that they can endure and thrive.

Recognizing strong governance leaders gives employees a sense of career satisfaction, creates a strong connection with the organization, and builds trusts between them and their superiors.

Governance Leaders Are Present at Every Level of Your Organization

Leadership should occur at every level of your organization. If you're actively looking for it, you'll gain assurance that it does.

The popular television show Undercover Boss demonstrates this concept in an entertaining way. In each episode, a company owner or high-ranking executive disguises their name and appearance and takes an entry-level job at one of the company's establishments. The big boss spends a full week working in various areas of the company. Working in the field gives the leader the chance to observe the rewards and challenges of the everyday workplace for entry-level employees and to recognize how they handle them. The experience helps top leaders better understand the personal and professional challenges of their frontline employees.

At the end of the week, the leader calls a few of the employees to their headquarters and rewards the hardest-working employees and those who demonstrate strong leadership qualities. In appreciation for their hard work, employees get rewarded with material awards, financial rewards or a promotion. The experience also gives top leaders a chance to improve working conditions as needed.

The show clearly demonstrates that all managers must be leaders. It also demonstrates that when leaders are committed to good governance, they can fill almost any position within the company at almost any level.

Part of a manager's job is to motivate, encourage and support, as well as to elevate the overall morale. Non-managers should be given opportunities to step into leadership roles as circumstances warrant it. The best way to motivate leaders and to develop their leadership skills is to reward them for excellent performance.

The Importance of Leadership in Governance

Leadership in governance is the willingness and ability to take ownership in a part of an organization and to continually do what is best for the organization. Effective corporate leaders stand on a foundation of solid governance principles. They have a clear mission and vision for the future and align their decisions with them. Leaders in governance follow a specific strategy and help to create a corporate culture that's conducive to success. Employees who embrace these concepts will naturally develop leadership skills.

Leaders tend to have certain essential attributes. They practice excellent two-way communication. Also, they have strong emotional intelligence and team-building skills. They understand the competitive landscape well and are forthcoming with suggestions and solutions. Strong leaders also have empathy for others and know how to express it appropriately.

It takes courage for leaders at every level to remain committed to fairness, transparency and doing the right thing despite changing or challenging circumstances. Courage in leadership is a skill that leaders can develop within their employees.

Other key attributes in governance leadership are team-building skills, empowerment, trust and a willingness to listen to suggestions with an open mind. A key tool in developing these attributes in employees is being available and willing to accept feedback.

The Importance of Recognizing Governance Leaders

Research supports the idea that recognizing governance leaders offers benefits to companies. According to one study, employees who received recognition from one of their superiors for a job well done at work felt happier both at work and at home. The study showed that happy employees were 12% more productive than their peers. Unhappy workers were 10% less productive than their fellow workers.

Many people in leadership positions find it difficult to trust their employees. What they may not realize is that the foundation of trust begins with showing appreciation for their workers. The simple act of thanking them for the good work they do every day helps to foster an environment of trust. When employees understand that their efforts are contributing positively to a cause, and that it was noticed by senior leaders, they feel a deeper, stronger connection to the organization.

A Gallup Workplace survey reports that 28% of employees said that the most meaningful and memorable recognition came from their manager and 24% were happy to report that they had received recognition from a CEO or other high-level leader. About 90% of employees said that they had a higher level of trust in their leader when they received recognition or thanks from that leader. Only 48% of employees who never received recognition said they trusted their senior leaders.

Alexander Kjerulf is the founder and chief happiness officer of the Denmark-based company Woohoo Inc. He touts happiness as the 'ultimate productivity booster.' Kjerulf says that happy people work better with others, fix problems without complaining, have more energy, and are more creative, optimistic, motivated and healthy. They don't worry about making mistakes and make fewer of them because of it. Also, they learn faster and make better decisions.

As a researcher and the professor of business administration at the Harvard Business School, Teresa Amabile states that creativity is vital to business success and that creativity can't thrive in a negative environment.

Modern Governance Requires Strong Leaders

Strong leaders support good governance. There are rising leaders at every level within any organization and they thrive on recognition for their hard work. In a May 2019 report by Diligent Institute, where researchers measured governance practices using criteria related to shareholder rights, board composition and independence, and compensation, the report showed that the top 20% of the companies with good governance outpaced the S&P 500 index and outperformed the bottom 20% of the index by 17 points, or 15%.

It's not profitable or wise to leave cultivating leadership skills to chance. Great organizations require great leaders who understand modern governance and who have the right tools at the right time to make decisions and make the best of every opportunity. The right tools can be found in the suite of digital solutions that comprise Governance Cloud by Diligent Corporation.


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