Wanted – A Definition of Governance

// Wanted – A Definition of Governance

Wanted – A Definition of Governance

It never ceases to amaze me that every time I present on the topic of governance or meet with a client regarding our flagship product governance manager that when I ask what the definition of governance is, I without a doubt get a different answer every time.  A quick Google search of “definition of governance” pulls in a whopping 42,900,000 results!

Wikipedia always a great source of information has the following comprehensive definition;

Governance refers to “all processes of governing, whether undertaken by a government, market, or network, whether over a family, tribe, formal or informal organization, or territory, and whether through laws, norms, power, or language.”

[1] It relates to processes and decisions that seek to define actions, grant power, and verify performance.“

In general terms, governance occurs in three broad ways:

1. Through networks involving public-private partnerships (PPP) or with the collaboration of community organisations;

2. Through the use of market mechanisms whereby market principles of competition serve to allocate resources while operating under government regulation;

3. Through top-down methods that primarily involve governments and the state bureaucracy.”

 

Wikipedia further goes on to describe the origin of the word; a Greek verb meaning to steer, and then to onto describe different uses of the word. From what I can gather the different uses imply how governance is considered within functional practices of an organisation.

Other reference sources include such popular websites as thefreedictionary, investopedia, and businessdictionary  all share a similar definition of governance, but none are the same!

The World Bank cites the definition of governance as follows:

“…Conceptually, governance (as opposed to “good” governance) can be defined as the rule of the rulers, typically within a given set of rules.  One might conclude that governance is the process – by which authority is conferred on rulers, by which they make the rules, and by which those rules are enforced and modified. Thus, understanding governance requires an identification of both the rulers and the rules, as well as the various processes by which they are selected, defined, and linked together and with the society generally”

 

There is further explanation on the website that goes on to define the difference between governance and good governance and to make things more confusing, they have openly posted on their site, “governance and good governance: varying definitions”

The Institute on Governance perhaps has the most elegant of definitions while acknowledging that “the complexity of governance is difficult to capture in a simple definition”, I appreciate the honesty in this explanation. The IOG’s definition takes a broad perspective and further clarifies its definition to suggest:

“…that as a highly contextual and fluid concept, stakeholders have powers to make decisions, how other stakeholders are heard with the intent of realizing organizational and societal goals…”

In a recent conversations with experts from AICD, Australian Institute of Company directors one of their subject matter experts cited the following;

“More specifically, corporate governance is the framework that allows for a company to be directed and controlled, and ensures that those who direct and control the company do so accountably. This framework of policies, procedures and practices (and related systems) allows a business to operate effectively, responsively, ethically and compliantly, while controlling risk. In many respects, it is about positioning the business to be sustainable. He went on to say – good governance is good business”

While this was a  response that I’ve become accustomed to I couldn’t help but think there was more. I spoke with Jason Wilk our company director and not surprising he pretty much said the same thing, I pressed him harder and finally the real definition came out, one that I was satisfied with;

“Governance is a framework of policies, procedures and practices that allows for businesses to foster trust, transparency and confidence with all stakeholders internally and externally. It demands that all stakeholders take ownership and are held accountable by demonstrating a commitment to organisational obligations, and strategy while managing risks, both positive and negative.”

From my perspective governance can only be as good as the people who foster and nurture an organisation to be sustainable, why not include them in the definition?

How would you re-write the definition of governance
in 5 sentences or less?

By | 2017-06-08T01:46:31+00:00 February 24th, 2014|Categories: Governance + Insights|Tags: , |

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