CGF ARTICLES, OPINIONS & EDITORIALS
Directors must understand key operational issues - ISO 9001:2015 (2014-10-29)
February 20,
2015 9417 9417 
Article by CGF Research Institute (Pty) Ltd
As more organisations across the world are being placed under the corporate governance spotlight, it is not surprising that more institutional stakeholders are demanding superior performance from boards and their directors.
The added pressure placed upon directors requires that they also have a greater understanding of key operational issues, and this includes keeping abreast with international operating standards. Quite unlike a bygone era when organisations could get away with sub-standard practices, or when directors simply met once or twice a year to casually discuss matters concerning their business; today informed shareholders (including activists) scrutinise the actions and public records emanating from this group of people who are ultimately accountable for the organisation. Most directors are acutely aware -- and constantly reminded -- of their joint and several liabilities which are attached to their governance functions of directing an organisation in which they are appointed. And while they are directing, they are also expected to protect all the interests of the organisation which is becoming far more difficult in an increasingly complex world. Clearly to be able to balance the act of directing an organisation, as well as mitigating risks for sustainable profits, a director needs to constantly pay close attention to the affairs of the organisation in its entirety.
Whilst it is true that directors are mainly concerned about the organisation’s strategy, its sustainability and future direction; directors also need to think about the manner in which their organisation complies with a range of international standards that underpin good governance practices. In so far as directors believing that their functions remain purely of a strategic nature, ISO 9001:2015 may well shake this traditional thinking and cause directors to also consider certain operational matters which could have major risks upon their organisations, particularly when matters go awry.
ISO 9001 is an international standard -- developed and published by the International Organization for Standardization (‘ISO’) -- which sets out the requirements of a Quality Management System (‘QMS’) for organisations. ISO 9001 is a part of the ISO 9000 family, which is a series of standards that address various aspects of
quality management.
Interestingly, ISO 9001 is the only standard in the ISO 9000 family to which an organisation can obtain certification, and it is the most successful standard for management systems in the world. In brief, ISO 9001 facilitates the consistent production of good quality products and services which in turn brings many business and environmental benefits, whilst also minimising risks.
It is important to note that ISO 9001 is the core standard that most well-known standards are based on and this is certainly a good reason for directors to keep abreast of this particular standard. Considering the full ambit and meaning of “quality”, the ISO 9001 standard goes a long way in determining the board’s role in the compliance of all standards which define the quality and professionalism which underpin the organisation. Whilst the last published version (ISO 9001: 2008) is currently under revision, the Draft International Standard (‘DIS’) version of ISO 9001: 2015 was released in 2014 and the final Published Standard is due in September 2015. What is notable about ISO 9001:2015 is that it distinctly places accountability for the organisation’s quality management effectiveness on the shoulders of the board, whereas this was not the case with its ISO 9001:2008 predecessor.
