OK, so you’ve had the downgrade notification and gone through the five responses of denial, anger, bargaining, depression and, finally, acceptance. You realise, as part of the acceptance process, that the wording of “but needs to improve some aspects of its governance arrangements to support continued compliance” can hide a multitude of sins and doesn’t necessarily mean a quick ‘tweak and a tune’; the return journey to G1 can be (and very often is) a slow and painful one and can go to the heart of your current governance arrangements.
Before you start, both the board and the executive need to be of one mind, namely that the current grading is a fair reflection of the organisation as it now stands. If all do not agree the weaknesses of the current position from the outset, the chances of reaching an agreed goal (namely demonstrating effective governance and thereby enabling a return to G1 status in a timely fashion) is significantly reduced.
The first step may therefore be for the board and executive to get together, close the door, and read through, very carefully, the Regulatory Judgment and discuss openly and honestly the nature of the concerns expressed. This will be a difficult discussion, and I am tempted to say that if it isn’t, you may not be doing it right. In a shameless plug, it can be very useful to have an independent facilitator for these kinds of discussions.
The board and the executive really should ask themselves: –
- What are the genuine issues identified by the regulator?
- Do we understand/agree the depth and breadth of those issues?
- Having looked at those – and let’s be honest – was there anything else that was missed?
- What do we need to do to make good? And by when?
- When/how will any agreed actions be implemented?
- How will we know the agreed actions have been implemented?
- When do we invite the regulator to return to look at the organisation again?
- When will we want to look again to ensure that the changes have become the ‘new normal’?
The next step is to draft an Action Plan to which all subscribe, preferably with a thumbprint in blood at the bottom; commitment is key. The Action Plan needs to be detailed and needs to have in place key milestones so that whoever has detailed oversight of its delivery can know of progress made and hold individuals to account. Of course, the tricky challenge is those situations where it is the board themselves that need to change the way it does things, which is where good independent challenge and assurance can assist.
The Action Plan should then be shared with the regulator so that they know of the actions taken and they too can monitor/support progress. And don’t forget – while you are doing this you still have the day-job to do and services to deliver!
Confidence is critical. The regulator must have confidence in your board and your executive and be comfortable they will work together as one team (albeit with different roles and responsibilities) to deliver the change that will have been identified is necessary. A huge part of that is the need to be open and transparent. Keep the regulator, your customers/service users and your key stakeholders informed. Let them know what has happened and the issues the grading has identified. Work with them, bring them along; much as we all love the magic trick with the big ‘ta da’ at the end, this is one time where you really do need to ‘show your working out’.
And finally, take your time and get it right; there are no quick and easy solutions. In the past, organisations might take six to nine months to be regraded. These days it can be two years plus. And, lastly, if you can, enjoy the journey. It is about change and improvement and, ultimately, better governance. Keep calm and carry on (improving).