This report has been constructed to provide analysis of the case study of TD Bank Group. The report first addresses whether the steps taken by the CEO, Ed Clark were in line with good policy governance principles. Secondly, the report focuses on arguments which support the establishment of a task force to mitigate possible insolvency due to unforeseen economic catastrophe. Thirdly, the report focuses on whether the Board of TD Bank Group should have established a committee instead of a task force to manage the crisis.
This report draws upon concepts of data & policy governance, corporate social responsibility & informed decision making.The purpose of establishing a data governance framework is to manage risk, compliance & regulatory requirements. Therefore, policy governance play a fundamental role to ensure that an organisation is covered in terms of data privacy, ethics & personal identifiable information. The model of governance should be designed to empower its executives, management & operational staff to fulfil their obligations of accountability. For an organisation to operate in line with principles of corporate social responsibility, it will make ethical decisions to compensate shareholders with profits while providing benefits to the stakeholders.
It is important that data used for decision making or reasonable interpretation are fit for purpose under good data governance. Therefore, prior to a decision being taken, it is important to understand the data around share price, brand, human capital, reputation & solvency; so that informed decisions are taken.2. Question 1Yes, I would have taken the steps as Ed Clark because he conducted himself in line with principles of good policy governance & ethical & socially responsible behaviour.
Based on the steps taken, it is evident that Ed Clark utilised people, processes, systems & technology to make informed decisions that increased productivity, efficiency, effectiveness & growth of TD Bank Group, while minimising risk.As per John Carver (Carver, 2009), policy governance is based on the functions rather than a structure of the governing board. It is a system consisting of a set of principles about governing, practiced by the policy governance board which enables them to control without meddling, focus on long term organisational output, powerfully delegate to a CEO & staff, & discharge its fiduciary responsibility in a visionary, strategic manner. The board represents the owners & the CEO represents the board. The authority of the board resides in the board as a body, not in members of the board (this is known as the one voice principle). It would be self-defeating to have a CEO & not empower him or her to the maximum. This results in accountable delegation. For accountable delegation to be effective, the board must clearly set out its expectations (referred to as policies); the board must identify who would be held accountable for the expectations to be met & assign that person the authority required to meet those expectations, followed by evidence that the expectations were met. As per the TD Bank Group case, Ed Clark was provided clear instructions to execute the new risk management strategy within the organisation.As per John Carver (Carver, 2009), it is the CEO’s responsibility to utilise the means not prohibited by the board to produce the board required ends. With respect to ends & executive limitation policies, the CEO is given this authority, meaning that he or she is authorised to make interpretations & change them as necessary, as long as in every case his or her interpretations can be proven to the board to be reasonable. As per the case study, Ed Clark has made reasonable interpretations of the risk management strategy & has made informed decisions to execute a risk appetite that would enhance long term growth of the business while avoiding high risk opportunities which would damage the bank’s reputation & brand.As per John Carver (Carver, 2009), in order for the CEO to execute the instructions of the Board successfully, it is important that the CEO’s authority over the operational organisation to be total. Ed Clark took necessary actions to educate the staff regarding the bank’s risk appetite & him personally participating in the educational programs advocates his commitment to corporate social responsibility.As per John Carver (Carver, 2009), when the board has delegated the running of the organisation to the CEO, it seeks to discover whether the CEO led the organisation to the accomplishment of reasonable interpretations of ends policies & the avoidance of the means prohibited in Executive Limitation policies, reasonable interpreted. In the case of Ed Clark, it is evident that board’s expected outcomes were achieved as TD bank Group became the 6th largest North American Bank in terms of market capitalisation over the span of 10 years. It was also one of the two US or Canada based banks with AAA Moody’s credit rating.3. Question 2Yes, the board was correct to establish a task force to mitigate possible insolvency due to unforeseen economic catastrophe because task forces are established as a result of a specific event to accomplish a specific objective over a specific time frame. The end result of establishing a task force in this case is to provide the board with recommendations on how to mitigate insolvency due to unforeseen economic catastrophe in a form of a report.According to Kevin Grigsby (R. Kevin Grigsby, 2008), task forces are work groups typically comprising experts in specified areas of knowledge or practice. In a task force, small groups of people & resources come together to accomplish a specific objective. The group will disband when the objective has been completed. Task forces are created on as needed basis. A task force is often created as a result of some event, unexpected or unanticipated, causing the need for an organisation to acquire knowledge as to how to best respond to the particular event. Personnel & materials needed to enhance the chance for success of the task force are put to work simultaneously. Task force work products are collective & address the specific charge to the group.According to University of North Carolina (Center for Faculty Excellence, 2019), a task force is typically called together to make a recommendation on a major aspect of an organisation. A task force usually consists of members representing different business units that need to be involved to achieve the task on hand. A task force usually delivers a report & recommendations to the individual or group that appointed it & then ceases to exist. It is at the discretion of the appointer of the committee to decide whether to act on the recommendations provided. Leading a task force is different to leading a series of adhoc meetings or chairing a committee as it entails much more focus & intensity.Therefore, as per the above arguments, the board was correct to establish a task force to obtain recommendations on how to mitigate insolvency due to Unforeseen economic catastrophe.4. Question 3No, the board should not have established a committee to solve the crisis because the establishment of a committee could overlap with the job entrusted to the CEO as the purpose of establishing a committee would be to work with the staff to develop a business plan to mitigate possible insolvency. According to Kevin Grigsby (R. Kevin Grigsby, 2008), committees are groups of persons appointed or selected to perform a function on behalf of a larger group. The smaller subset of members represent the larger group or population. This is a more formal work group than a task force. Often defined in organisational by-laws or statutes, committees serve very specific functions within organisations. Typically, they are headed by a committee chair & are composed of individuals representing different points of view & different organisational components. Some committees are enduring as they have no fixed endpoint. Others may be adhoc committees, appointed with a well-defined charge & deadline, after which the committee will cease to exist.As per John Carver (Carver, 2009), the policy governance rules for committees apply to any group that is created by the board or is given its job by the board, no matter who is in it or what it is called. Committees would be very useful when they are created to help the board carry out its own hands on job. However, many board committees are created in order to provide advice to staff. If the CEO is to be held accountable by the board for meeting its expectations, those expectations or instructions should not come from committees, but should only come from the board. Any other involvement from the board can be called help or advice only if the input provided was invited by the CEO & can be ignored by him or her. Even if the committees intended to be advisory, usually, staff members do not feel free to ignore the input of board committees. Therefore, committees of the board tend to interrupt the chain of command if it requires staff involvement. Therefore, policy governance boards observe the rule that they will not create committees to help with management but will not create them to help with governance. The CEO has the authority to create all the committees he or she wants, but they would not be board committees. This ensures uncluttered & unambiguous board-CEO relationship & that the CEO remains fully accountable for operational decisions making.Therefore, as per the above arguments, the board should not have established a committee, rather the CEO should have appointed a committee to solve the crisis.5. ConclusionIn could be concluded that Ed Clark made informed decisions as the CEO of TD Bank Group in line with good policy governance & conducted himself in an ethical & socially responsible manner.It can also be concluded based on the arguments above that it was correct for the board of TD Bank Group to establish a task force rather than a committee to rectify the crisis due to unforeseen circumstances.