Governance is neither linear nor single dimensional nowadays, it should be understood via multidimensional lens, and assessed at the enterprise level.
Governance is about how well an organization is being run and if set up right, it should oversee the achievement of the vision, mission, and objectives. In order to function smoothly, an enterprise has to be linked to the many and varied ‘touchpoints’ between itself and the marketplace environment of which it is a part today. Without governance as a steer wheel, the business will face significant risk for survival, and opportunities which it creates cannot be properly transferred into multidimensional business value.
Governance & policy: Policy is a set of principles or guidelines to encourage desired behaviors and improve decision coherence. Strong governance discipline can be implemented by setting good policies to encourage fitting mindsets, positive attitudes and good behaviors. Good policies lubricate the business value chain, ensure the people crossing the boundaries will pull in the same direction, improve flexibility in planning, and build business agility.
Good policies are not overly restrictive rules that limit people’s potential; but the strategic constraint that enables people to move in the right directions with premium speed. By enforcing strong governance discipline, business management can set good policies, improve accountability and increase business process transparency, intelligence and maturity.
Governance & capability: Governance needs to set a platform for corporate capability management. It makes sense to have governance structures and processes that are more flexible, lightweight, continuous, and that focus more on results rather than detailed plans. From business capability analysis to capability re-engineering & development, a strong governance discipline helps business management perform risk analysis, raise visibility and awareness of both hard and soft elements of business capabilities across the organizational hierarchy.
Corporate governance is most often viewed as both the structure and the relationships for enabling business capability building or determining performance. There should be a governance mechanism embedded in all crucial business processes which underpin business capabilities. There are governance practices to enforce accountability at every level of the organization for corporate capability development and optimization.
Governance & practice: Governance is all the practices necessary for a company to function smoothly. Compliance is the discipline of ensuring the organization is in compliance with policies, controls to reduce risk, standards and legal requirements. Governance structure is independent of management structure, and governance practice should be shared cross-enterprise collaboratively.
Strong governance process and practice ensures strong compliance discipline. Governance and compliance usually go hand in hand. Great leadership harnesses governance, and develops good compliance systems that have morals and ethics incorporated into it. Compliance should be in the frontline of developments to provide guidance to the business, not only what they cannot do, but they can also point into the direction of opportunities within the regulatory frameworks.
Governance is neither linear nor single dimensional nowadays, it should be understood via multidimensional lens, and assessed at the enterprise level to enhance management effectiveness and get enforced holistically, to improve organizational maturity.