Oversight, Governance

We build oversight mechanisms that are non-destructive of the passions and enthusiasms of the teams...

Oversight makes sure those who spend funds exercise proper stewardship of the funds. The structure of the investment transaction helps, but in the end, legally and ethically, the governance body must perform its own due diligence. In World Class R&D, oversight is not just concerned with collusion, subversion or unethical behaviors: it’s looking for effectiveness. Good stewardship of our funds means effective use of those funds.

Individuals must perceive the oversight function to be a fair game played on a level playing field. This level playing field extends from the opening play through to the final score. If you predetermine all the important variables in the research (e.g., tight specifications on the end product) then teams expect to receive a ranking that reflects their working with their hands tied. If I'm going to be judged on the effectiveness of my work, then I expect to be free to do all I can to influence that judgment.

World Class R&D oversight rests primarily on three behavior fundamentals+:

  • Arms Length+ – minimizes personal biases or intentions in oversight
  • Revelation+ – recognizes that important information needed for oversight remains hidden, often unintentionally
  • Competition – recognizes that effective oversight calls for comparators

These are built into the design of the oversight function itself. To illustrate, Independent Evaluation is an approach whereby an evaluator is placed on the ground with the research team and reports back to the funding agent+. The funding agent does not necessarily need to visit the site where the research is performed (arms length), and yet is assured that all information needed to fairly evaluate the investment is revealed (revelation). We have several Independent Evaluators covering several R&D investments, and build competition into the oversight function.


More Core Arguments for Governance

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