Governance needs to be a complementary part of strategic management.
Modern corporations are massive, complex, interdependent dynamic ecosystems. Corporate governance discipline can fulfill its purpose as a high-level business enabler by providing a structured communication bridge between shareholders and corporate directors.
Transmitting intended strategy into guidance during execution or idea realization: Strategic plans are living documents that require ongoing monitoring and adjustments when needed to address unforeseen changes in the marketplace. Strategic management is both a system and process to deal with dynamic and iterative planning and execution continuum. In practice, the business strategy execution gaps exist at the people’s mindsets, the organizational culture, and processes. The management and governance are complimentary interdependent disciplines to close gaps to improve business effectiveness and agility. Statistically, the organizations with strong governance achieve better profitability and higher performing results than their competitors.
Receiving feedback from execution into where strategy needs to be modified: Strategy execution has low success rate in many organizations due to a variety of gaps or business misalignment. It is also because it is unrealistic or too costly to implement or doesn’t actually fit, stretch or match the position on the ground. Talent shortage is another concern that needs to be addressed for improving strategy execution. Either change or strategy management, people are the cause and effect; contributors and beneficiaries. The management needs to collect feedback, make timely adjustment of strategic planning and improve strategy execution success.
In many traditional organizations, the feedback gaps are possibly caused by homogeneous team setting. When people are too “fit in,” they think the same and act the same, without challenging each other’s point of view; the gaps get enlarged. The excellent feedback gives you accurate information to improve; great questions to become self-aware; positive intention to change, and keen insight to grow and mature at a faster pace. But negative feedback sometimes causes confusion and creates conflicts or mismanagement. So close the feedback gaps via in-depth understanding about the quality of feedback givers, the intention of messages, and the insight about its content and context to improve business manageability.
Strong governance enhances strategic alignment and structural flexibility: Strategies for governance and risk management must be woven into the fabric and aligned with the business culture. One of the corporate governance bodies – board directors need to scrutinize management disciplines by asking: Do senior management committees make informed, proactive and timely decisions to achieve desired results? Can the management function effectively to make sure their organizations are on the right track of strategy management? Through solid governance discipline, the alignment process can become a harmonized process, business executives are eager to set stages for designing and implementing strategies, people are ready for moving to a fluid working environment.
Governance is a sophisticated process that if well executed at the demand/initiative level, it will lead to better decisions. Good corporate governance is ultimately responsible and accountable for developing and then, sustaining the environment and culture for an enterprise to prosper. Although the governance structure is independent of the management structure, the governance process or mechanism can be embedded into the business process seamlessly. It should be understood via multidimensional lenses such as innovation, people, process, technology, multidimensional value perspectives, and be enforced holistically.