“Good governance” is a term that has been thrown around so often in the past 20 years that it has almost become interchangeable with the word governance itself. However, you may still be unclear on what exactly this means.
First, it’s important to define governance, so we can label certain practices as good.
What is governance:
Governance covers all aspects of leadership and decision-making. It is the structures in place that allow a leader in any organised body to rule or control or dictate actions.
In an organisation, the Board is in charge of governance with the Chairman at the head. While the CEO might make day-to-day decisions, it is the Chairman who sees the wider picture of the governance structure. To read more about the role of the CEO, please see our other article.
What is good governance:
Good governance is effective management of the organisation and takes into account an established leadership strategy. Many organisations base their good governance practices on the Human Rights Council’s 8 key attributes of good governance. However, we recommend using the Council of Europe’s 12 principles of good governance, which is more comprehensive:
- Fair Conduct of Elections, Representation, and Participation
This concerns the election of board members and the executive committee. Any election must be democratic and ensure all votes are weighed equally. The representation and participation of your board will depend on their roles and responsibilities. It will also depend on the governance model you choose to adopt. You can learn more about both of these factors in our article here.
Sometimes, your Board of Directors may not be able to meet at a moment’s notice. You may have board members spread across the globe or who have other commitments. This is why an Executive Committee is key. They can deal with the sudden issues and any risk management. It’s also important to have a clear direction and timeframe for any project and contingencies if circumstances are not in your favour.
- Efficiency and effectiveness
Speaking of running smoothly, your systems should be able to assess the performance of the Board or organisation. This means audits! We have written about the importance of audit trails before! You should make sure that anything your board purchases or sets into motion will benefit the organisation. You need to update any systems that are no longer working or are tedious, like printing out board packs!
- Openness and transparency
Having an open and transparent protocol for governance means having documents that are easily accessible. Every member should feel like they have a say! A clear, actionable process of decision-making will ensure your directors understand their roles from the get-go. We have seen in the past what can happen if transparency is not at the heart of the organisation.
- Rule of law
This refers not only to international, national, or local laws, but also the code of governance for your organisation. You should implement regulations and rules that ensure fairness and transparency. This will likely be found in your organisation's Code of Governance.
- Ethical conduct
Any conflict of interest has to be declared before you join a board. There must be at least two board members who are considered independent of the organisation. This means that they have no financial or material investment in the organisation or its employees. There should also be regular auditing to ensure there is no corruption.
- Competence and capacity
Keeping up with the times means more than just ensuring you stay up-to-date with the news! It also means keeping your skills sharp in this technological age. You should make sure any software is user-friendly and provides support during the transition stages.
- Innovation and openness to change
Similarly, you must be willing to adapt to any challenges that come your way. It is important to change with the times. This may mean diversifying your board, changing your regulations, or introducing new software. The success of your organisation should always come first, and you need to make sure you are in the right mindset to be flexible in order to overcome any issues.
- Sustainability and long-term orientation
In the modern era, every organisation needs to think about their ecological impact. However, sustainability doesn’t only concern being eco-friendly. It is also about ensuring all decisions support the long-term progression of the organisation. At Convene, we believe in leading by example and have our own ecological mission.
- Sound financial management
Risk versus reward. Every financial decision should take into account the dangers and the outcome. You should have committees that are able to best advise the Board on specifics. Not every Board Member is a financial specialist, but it is important that all Members have a vague idea of how the organisation works and how to balance the books.
- Human Rights, Cultural Diversity and Social Cohesion
Having a diverse Board means that you have a variety of opinions and outlooks on every decision. This means that any strategy of the Board will be forward-thinking and innovative. If every member agrees, then there would be no discussions! Debate is healthy for a board. Otherwise, how will you notice problems or come up with easier solutions?
Every board has stakeholders and shareholders they are answerable to. If you are unsure of the difference between the two, please read our explanation. Any board member, executive committee member, senior leader, etc, must be reviewed on a regular basis. This review must be transparent and fair. If a mistake is made, an investigation must take place. This is why auditing and meeting minutes are essential.
How Convene can help you achieve good governance:
A Board Portal is a major step in the direction of good governance. Convene’s software has features like meeting minutes templates, note-taking and agenda-building, which make auditing easy. This will ensure accountability, sound financial management, transparency, and efficacy. The paper-free solution will help you achieve sustainability and will even save you money in the long-run!
Our 24/7 support and unlimited training will help even the technophobic feel competent, comfortable and confident using our software. Convene’s features help with the before, the during and the after, so you can have a stress-free board meeting and focus on governing effectively! Don't hesitate to contact us or read our customer success stories to find out more.