A Corporation’s May Day Call

Last week a homeward flight that McLeod Governance was about to board was delayed as an incoming flight to the airport called a “mayday”  call.

Thankfully the incoming flight landed safely and the airport got back to normal operations relatively quickly.

As we waited it got McLeod Governance thinking about stress and distress.

Or more precisely distress signals when a proverbial storm approaches.

We as risk / internal controls / governance professionals have many things at our disposal but one thing we don’t have is a common, universally understood and respected signal to call out the distress (or otherwise) of the frameworks that we are called upon to develop, review or dismantle.

It is time for the Governance Distress Call.

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A Mayday situation is one in which a vessel, aircraft, vehicle, or person is in grave and imminent danger and requires immediate assistance.

Mayday calls can be made on any voice frequency, and when a mayday call is made no other radio traffic is permitted except to assist in the emergency.

A mayday call may only be made when life or craft is in imminent danger of death or destruction.

The “Mayday” distress signal was devised by Frederick Stanley Mockford, born in 1897 in the East Sussex village of Selmeston.

While he was senior radio officer at Croydon airport in 1923, he was asked to think up a word that would indicate distress and would easily be understood by all pilots and ground staff in an emergency.

As much of the traffic at the time was between Croydon and Le Bourget (Paris) he proposed the word “Mayday” from the French “m’aidez” (to help me).  (As an aside, there is no evidence to suggest that the Morse Code SOS means “save our souls”).

It was this acknowledgement of a French word that also sounded like an English word that proved acceptable to both the French and English authorities.

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So what would the Governance Distress Call look (sound?) like?

Firstly is such a Distress Call necessary?

There are two schools of thought here – yes in the sense it allows interested spectators to objectively measure the risk / control environments within differing organisations against a universal measure of distress or success.

No from the perspective that such a measurement process already exists by virtue of (with public companies) the pricing of the underlying stock.

Assuming that the Distress Call is necessary what exactly is it?

Therein lies the challenge.

Whilst nearly not (OK – not at all close) as romantic as the story behind Mayday, McLeod Governance initially proposed the following as the highest level of Governance Distress Call:

Serious corporate governance, risk management or internal control issue highlighting a realised risk that has resulted in or a potential risk that may lead to substantial losses by the business unit / process being reviewed. Immediate management attention and remedial action is required.

But we are realists if nothing else and we know that that is not going to fly.

So perhaps the Governance Distress Call is better conceived from the French inspired transitions of Mayday and left as something as simple as:

Merde!

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