As its name clearly implies, the focus of the corporate centre in the controls configuration is on establishing excellent control processes that add value to the businesses within the group. This means that the dominant skills at the relatively small, indirectly involved centre will be financial management so that stretching, but not completely unrealistic, targets can be set and appropriately tailored, but primarily financial, performance measures established. The best examples of this shareholder style of corporate centre develop world leading expertise in this area of governance so that the costs incurred at the centre are easily outweighed by the improved performance of the underlying businesses. These issues are re-shown in Figure 4.1.
A classic characterisation of the controls configuration is therefore a small, financially focused corporate centre controlling a portfolio of relatively independent business units. The centre exercises tight financial control despite its indirect involvement in these autonomous units and is normally only concerned with the end results (both promised and achieved) rather than with the detailed competitive strategies implemented by each business. The only common benefit holding this type of group together is that all the individual business units can improve their financial performance by applying the disciplines, processes and controls that have been identified or developed by the corporate centre. This means that highly successful groups...
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