What is Governance?
This video briefly answers the question, “What is governance?,” and outlines the job of a board of directors.
You hear the word, ‘governance,’ a lot these days, but what does it really mean, and is it as important and serious as it sounds?
Board governance, or corporate governance, simply refers to the job of a board of directors. Now, if you look at the position boards hold in corporations, you can see that they are sandwiched between shareholders or some kind of ownership on one side, and the CEO and staff on the other side. Since the ultimate authority for the company or organization comes from the ownership, naturally, the governance job of the board comes down to three things:
1) Have ongoing dialogue with the ownership to discern their expectations for what results the organization should produce;
2) Translate those expectations, plus other information and the directors’ own perspectives and values, into written criteria for success; and
3) check to see that those criteria were met.
In a nutshell, that’s it. Board members can do other things, like volunteer to help staff or get involved with fundraising or public relations, but the board’s core governance role is ownership linkage, policy making, and monitoring policy compliance.
Now, you can see why governance is so important. The job of the board is at the front end of what happens in organizations. Sometimes a really strong CEO can compensate for a weak board of directors, but for any organization to truly live up to its potential, and achieve relevant results, good governance is critical. This is Susan Mogensen, with Brown Dog Consulting.
Do you have any questions about your board’s governance? Book a free consultation and we’ll be glad to help.