The WHY Behind Organizational Governance

Excellent organizational governance matters

Organizational governance has been written about a lot. It can be difficult to understand, challenging to describe, let alone accomplish with some level of personal satisfaction and benefit to the organization.  

Your organization’s governance of itself impacts the ability to carry out your mission, live more fully into your core values, and achieve your vision for the future. At a personal level, it impacts you, the lives of the other board members around the table, and the chief executive. At an organizational level, it impacts your employees, clients, community, and the world around you.  

Exemplar organizational governance propels a mission forward and poor governance can impede progress. Simply put, organizational governance matters. 

Let’s take a step back and approach organizational governance from a process approach (See sidebar). In doing so, we believe that it will provide a more helpful understanding of governance, its characteristics, nuances, and dynamics.  

SIDEBAR: The basis of the process approach requires a posture of walking alongside another. This posture along with the willingness to ask inquiry-based questions, we are able to bring clarity to WHY we are doing what we are doing, WHO plays what role, articulate WHAT success looks like, and WHERE, WHEN, and HOW do we proceed towards these desired outcomes that mark success.   

In this series of blogs, we will be taking a deep dive into understanding a relational framework of organizational governance that deepens our collective ownership and helps us as leaders embody organizational governance every day. Before we go into those relational dynamics, we much first start with WHY…the first question in any inquiry-based process. 

What is the Purpose of Organizational Governance? 

There are many definitions of organizational governance. Some definitions emphasize structure, command, and control, some regulatory compliance and fiduciary oversite, others naming and monitoring success factors. These definitions are not purpose or WHY statements, they are more HOW we will proceed towards governance. Gaining clarity on the purpose of our governing is essential, so we must dig deeper. 

BoardSource, primarily known for its work in non-profit organizational governance defines governance as the legal authority of a board to establish policies that will affect the life and work of the organization and accountability for the outcome of such decisions.¹ 

This definition is getting closer to the WHY of organizational governance by identifying that the governors have legal authority (which is a role that the WHO plays). BoardSource’s definition also describes HOW we will proceed in governing by identifying the ability of a board to establish policies that will affect the life and work of the organization. Helpful, but that is not a WHY statement either. The last part of their definition reads, accountability for the outcome of such decisions, also helpful and is a desired outcome of our governing, or in the parlance of the Process approach, considered a WHAT but not a WHY.   

Let’s try one more time. A colleague of mine, Mark L. Vincent, shared with me the International Organization for Standardization's (ISO) 2021 publication on organizational governance. It is an excellent resource and gives an excellent definition to the purpose of organizational governance.  

ISO 37000 defines governance for all organizations in all countries as a human-based system by which an organization is directed, overseen, and held accountable for achieving its defined purpose in an ethical and responsible manner.²

A remarkably simple definition. 

Within this definition is a clear purpose, a WHY to our governing…for achieving its defined purpose. Which literally means the purpose of our governing is to achieve our organization’s purpose…what many call mission.

Organizational Governance = Achieving the mission of the organization in an ethical and responsible manner

Finally, a WHY we can get our minds, hearts, and heads around that moves all of us towards human flourishing.

There are two other remarkable elements of ISO's definition of organizational governance. The first is the recognition that governance is a human-based system. This personalizes governance, makes it a little more real, less theoretical, and more approachable.

Second, ISO's naming of three significant roles: by which the organization is directed, overseen, and held accountable.  Something for us to get our minds around when we talk about the WHO of organizational governance...more on that in next's month's blog.

Are you clear on the WHY of your organization’s governance? If not, what might it take to gain clarity in the boardroom? If you would like to connect, please feel free to call Ron at 202-740-6344 or e-mail ronm@designgroupintl.com or Lon at 616-516-9870 or email lons@designgroupintl.com.  

We’d be honored to listen and learn more. 

Walking alongside you,

	Lon L. Swartzentruber CEO and Managing Partner, Design Group International		Ron Mahurin Design Group International Senior Consultant