An organizational framework delineates the flow of products and services throughout a company and explains who holds responsibility for decision-making, project management and operational oversight. A framework for board governance and organization outlines the roles, responsibilities and fundamental principles of a board of directors. It defines how the board functions to fulfill its fiduciary responsibility to an organization’s stakeholders. A strong organizational framework ensures that the board effectively addresses company matters.

 

There are five primary corporate governance frameworks that can be applied to modern-day organizations. In the most outdated framework, the Traditional Model, the board shares one voice on every matter it discusses. The overarching goal or end purpose is the focus of the Carver Model, setting an outcome for the board to work toward and giving the CEO primary responsibility to drive the achievement of this goal. The Cortex Model emphasizes the inherent value of the company to its community and prompts the board to base decisions and outcomes on the value and objectives of the organization. Directors share equal voting and responsibilities in the Consensus Model, which is often beneficial for nonprofit organizations. The Competency Model highlights communication and trust as important ingredients for improved board performance, with the organization’s established bylaws outlining practices of the board.

 

Corporate culture is essential to motivating the board and establishing behavioral expectations. A company should have a clear focus of what defines its team members, established through mindful observation of employee and executive interactions, behaviors and language. A board should cultivate an environment that fosters engagement and meaningful conversation while striving to make decisions and accomplish tasks. To build trust, it must be continuously nurtured in the boardroom. Discussions should remain transparent and weaknesses should be acknowledged to foster growth. Each board is as unique as its company. Organizational frameworks should be tailored to the specific needs and culture of the company. No single framework can or should be viewed as the golden rulebook for every company.