7 Steps to Corporate [America] Governance

Steps Corporate America should take for recovery of the World Economy: Shift the focus from Balance Sheet to Governance.

Have the optimum control of Governance, based on the book, Inactivity Based Cost Management [IBCM]: Measurement of Intangible: Governance, Ethical & Fiscal Responsibility and Accountability:

Step 1. Defining & Identifying substance as the basis of control of Governance. During the inaugural session to the US Congress President Obama said: ” Here in Washington, we’ve all seen how quickly good intentions can turn into broken promises and wasteful spending. Inactivity during Action Process results in broken promises and wasteful spending. Inactivity during Creative Process stops with good intentions. Meaning they are subtle like economic theory. It has to grow to become a substance. A substance has got two characteristics. 1. Action and 2. Quality. Without an action, without a quality a substance can never be referred as a substance.

Step 2. A substance attains Quality to reach the level of completion of the creative process to be termed as a substance.

Quote: “Ethics is a substance with quality and action integrated. The quality is represented by a written document setting out comprehensive ethics policies and action represented by the steps taken to accomplish the policy declaration of ethics. In case of Midwest Independent Bancshares Inc. it is in the process of being created as it appears from the findings of the Federal Reserve recommending the banks in question to adopt comprehensive ethics policies. It means the ethics policy statement is not ready, is in work-in-progress status and hence the the substance is yet to emerge.” Unquote

When an Ethics policy does not emerge the substance is not created and hence Action Process becomes meaningless. Looking at the case of Siemens. Quote: “Whereas in case of Siemens the substance code of conduct seems to be in place but action is in state of insentience, described as “read, laughed and filed code”.Unquote

For Governance to take place substance must be ready. In both the instances Governance has drawn a blank, one on account of absence of the substance and the other inactive. Both score 100% inactivity with respect to the action process of the substance – ethics.”

This is one instance IBCM measures one substance called Ethics. It is fundamental to the principles of IBCM to create the substance, be it sub-prime mortgages or Management Quality or Risk Management or Accounting Quality. Each is a substance to be clearly prepared as a document like UNCAC. This leads to the next step of creating a team responsible for execution.

Step 3. Yoked together ~ Governance

“A substance has the inherent characteristics of quality and action that cannot be separated from it and the work is always associated with it, like a piece of cloth and the threads making up the constituent parts. A substance combines with the quality and a substance combines with activity. When one substance combines with another substance, it is yoked together. The two can remain independently without combining. Like ‘Government by the people, of the people, for the people’, each a substance in its own merit having the same quality but differentiated by the activity.”

The main reason for the fiasco, whether BP or Lehman Bros is the assumption a team entrusted with a job would go ahead and perform it. Governance does not take place. Rather Governance cannot take place in isolation. A Corporate is a single individual unit and must take into account each and every substance together without anyone substance left abandoned.

Step 4. Intangible and Governance

When antimatter collides with matter the mass is converted into pure energy. Energy is the capacity to do work. Similarly when intangible collides with the substance the mass is converted into pure energy. Pure energy is measured as performance, as the Energy is the capacity to perform. Where matter exists, so does energy; the greater the mass of matter involved, the greater the effect of the energy which can be transmitted. The triggering device is the intangible. There is inactivity in the form of Quiescence in creative process and Insentience in action process that it needs a collision with intangible to create pure energy in the form of Governance.

Intangible is the nucleus to any substance in the tangible field. It triggers the collision between a substance both to create and act upon the Quality identified to the substance. Intangible has two planets revolving – 1. Ethical Responsibility and 2. Fiscal Responsibility. Ethical Responsibility is a stand alone planet and it is the domain of the People. The other one is Fiscal Responsibility that has four Moons: i. Technology, ii. Managerial Force, iii. Operational Force and iv. Finance. The last one has a moon revolving it which is Balance Sheet.

Intangible is the most powerful antiparticle that makes a substance as well makes it work. A substance when yoked with another retains its independence but performs its duty. That duty is defined as Responsibility by each of the four moons of the planet Fiscal Responsibility.

In Corporate functioning when a goal is set the goal must have a responsibility assigned to each of the five – note five – entities of Intangible. Otherwise is not worth setting a goal. Anything outside the gamut of Ethical Responsibility is Fiscal. Ethical Responsibility is the owner and Fiscal the Trustee. In every step of reaching towards accomplishment of a goal Ethical Responsibility’s Quality statement must be complied with. These are the threshold values. ‘Free enterprise is an expression of freedom, whereas Ethical Responsibility is an expression of liberty, that threshold values emanate to bridge Ethical and Fiscal Responsibility.’ A BP or Lehman Bros or various instruments floated without defining the Ethical Responsibility would most likely end up in disaster.

As a matter of curiosity one can see within a moon of a moon of the planet Fiscal Responsibility holding the intangible asset trying to contain the most powerful force Intangible in it. Intangible Asset, an oxymoron, is a major reason for the Financial Crisis 2009. More in the book.

Substance when yoked with another creates another substance or accomplishes the action process. That is the responsibility of the Fiscal Responsibility group. Illustratively these four join together to create a plane. Once certified for flying it does the repetitive number of times flying and landing ad infinitum.

By controlling one goal, infinite succession of finite purposes is accomplished. That makes the Governance very easy.

Step 5 Measuring Governance

Infinite number of blocks set upon one over the other have identical process of creation and action. Each is independent, has independent quality but has identical way of transforming from nothingness to a substance and having formed a substance the Action Process. Each is related to its own Quality but each layer added in both the processes in typically the same manner. The layer that gets added is the result of intangible triggering the collision.

The responsibility is assigned to each group of 5 entities – including Ethical Responsibility – in both the processes of the substance. When one layer does not get added the process comes to a stop, like remaining only as good intentions during creative process or resulting in wasteful spending or broken promises during action process.

IBCM has built up a robust measuring device in identifying each of six layers, from layer 0 to layer 5 when it transforms into a substance and six layers from 0 to 5 in the Action process when the task set is accomplished. It enables the construction for each Corporate for example the substance Business Ethics under Fiscal responsibility. It is a very powerful statement of Governance for a Corporate entity far far superior to a Balance Sheet.

Step 6 Index of Inactivity

To start with Corporate can prepare an Index of Inactivity or in other words the status of each substance at a given stage. Since one substance is yoked with another and independent for each process area will show the status by each resource area the extent of action yet to be taken to accomplish the task set.

During creative process it will show the status as it is and yet to be reached to become a substance. Corporate can look at the Intangible Asset area. AN IPR or a patented Process has gone through the six stages to become a substance. The ones yet in the process can be identified as to what the status as on today. If it has added the layer 3 there are 2 more pending to be completed to become a substance. The balance layers to be added are the index of inactivity. Table 27 reflects the starting point of Business Ethics where Action process is yet to start.

IBCM has taken UNCAC as the main case study of the principle of Inactivity Based Cost Management. Each group Ethical Responsibility and Fiscal Responsibility with four entities are assigned to each of the Article under Chapter II Preventive Measures. UNCAC document is an excellent document for analysing both the groups. Corporate can adopt the UNCAC for creating a substance, any substance within the organisation, for it has two important Articles – Article 13. Participation of society and Article 10. Public Reporting. These two articles in the background would assure the Corporate to the tenets of Governance assuring Corporate Ethics or Social responsibility. Both are measured by IBCM and at the same time the measuring device is not only common but identical to any other substance elsewhere the comparability between one and the other is truly stunning.

Step 7 National Grid

IBCM converts every action process into relative efficiency in case of physical attributes of achievement. e.g. turnover or number of complains solved into relative efficiency factors and merged into each layer added in either of the processes. This enables across the industry comparison to form a National Grid of Governance. Corporate America will have a single Grading of Governance. Unless such companies showing below average Grading are pulled up the final grading will not move up. The Index of Inactivity will show for the National Grid as to individual process areas as well resource areas, i.e. five entities.

Conclusion: A substance is the very essence of Governance measurement a declaration of intent. Whether stimulus package or targeting of unemployment rate from current 10% to say 6%, a substance must be prepared as to how and what it is intended to do in the next 3 months or 6 months. A Leontief model may be the right one to create an input – output model as a Budget of cost consequence and the Governance Reporting herein mentioned as the Real-time monitoring of Accountability Statement that would guide the Corporate to a remarkable recovery. Substance makes Governance reporting very easy, simple with comparability universal as it is intangible.

Corporate America must lead.

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