Ludo Van der Heyden, the INSEAD Chaired Professor and Emeritus of Corporate Governance, said on Monday that there is no good governance if execution is bad. He was speaking at the launch of the Cyprus Institute of Directors & Corporate Governance.
He added that true governance is about “harmony” and marrying the needs of all stakeholders and fairness to all parties.
“Directors and executives need to be aligned to have good governance,” he said. He added that it is important to teach governance early, drawing inspiration from ancient philosophers like Plato, and Sun Tzu, as well as modern thinkers like Friedman.
Van der Heyden said good governance is about framing decisions and not going outside the frame, because when the frame is removed, it creates “limitlessness” which is dangerous and makes it difficult to make decisions.
A problem in business always belongs to the governors, and the root always goes back to the governors, he said, as most entrepreneurs lose their enterprise when going to the investors before having a board. Highlighting the importance further, he said it is important to go beyond your decisions, with the help of a board who help to ensure the success of the team.
Van der Heyden said it is important to pick and choose battles, find the strategies, and ensure teamplay and a shared governance culture.
