[caption id="" align="alignright" width="300"] English: Corporate Governance (Photo credit: Wikipedia)[/caption]
All organisations have to find an appropriate balance between central control and local freedom to act. Governance provides the framework and checks and balances within which this is established and managed. It ensures that the process by which decisions are made is appropriately managed. It allows them to be seen to have been taken in the best interests of the shareholders, taking account of all the demands on the organisation, the risks, and the information available at the time.
Review your governance
If several of the following statements are true of your organisation, it may well be a good idea to review your governance arrangements.- The governance structure (meetings and delegations) does not constitute a simple hierarchy underneath the Board, with clear parent-child relationships and information cascaded up and down the hierarchy
- The governance structure is not clearly documented (e.g. including a consistent set of Terms of Reference), communicated and understood
- People do not have clear written instructions as to the limits of the authority that they have been given, or these are ignored
- Committees are allowed to approve their own Terms of Reference and/or memberships
- Governance meetings happen irregularly, or with papers which are poor quality or issued late
- Senior staff are allowed to ignore the rules which apply to others
- Decisions are often taken late because of papers missing submission dates, inadequate information, wrong attendance, submission to the wrong meeting, unexpected need for escalation, etc
- There is a feeling that the governance process is too bureaucratic