Mike James, LRQA’s Managing Director, explains the importance
and benefits of robust, independent assurance.

Management systems are becoming increasingly linked to the success and survival of organisations. In parallel, CEOs and managing directors worldwide are placing greater emphasis on the independent assessment that helps ensure management systems are ‘fit for purpose’.

The art of good assessment is asking good questions; by being able to answer the questions an organisation learns more about itself. If it cannot answer them, it finds fundamental problems
that need solving. In either case the organisation becomes more self aware and is therefore better able to adapt and change.

Staying in control

When CEOs and managing directors are considering the goals they are trying to achieve or risks they are trying to manage, they need to think about one key question: do any of the key processes for achieving this fall outside the boundaries of the formalised management systems?

If the answer is ‘yes’, then they have to ask themselves whether they really are in control.

In LRQA’s experience the answer very often is ‘yes’, largely because of the many changes that have taken place in business over
the past 10 to 15 years. These changes include the move to knowledge-based competition, global supply networks, the use of information technology, increased collaborative working and the redefining of organisational boundaries. All these changes make responsibility and authority harder to define and risk far less visible.

For example, the competitive strategy of many companies is increasingly based on the accumulated experience of its people. This forms a key component of what they are delivering to clients. Human capital is one of the few assets which appreciates over time. However, it is also an asset whose value can reduce to zero overnight.

How many organisations know the age profile of its creative people, its scientists, its engineers, its designers and so on –
and their likely retirement date? How many effective formalised knowledge management processes and succession plans exist
in reality? Where they do exist how many operate outside formalised management systems? If they reside within the
HR system is there an effective interface with the management system? In addition, how many IT change programmes
which directly impact on customers are managed outside
the formal management system?