But what does governance really mean in an organisation?
When people talk about governance in the workplace, they’re usually referring to the role of the board of directors. The board of directors exists to ensure that the organisation is running smoothly and managed properly so that shareholders are happy.
In start-ups or high-growth businesses, governance usually begins when an owner or manager seeks help from an advisor outside of their day-to-day operational tasks. When the owner or manager learns the value of external perspective and as the business grows, they may formalise this external perspective into a governance structure of a board or advisory board.
Why is good governance important?
Lays out a clear vision for the future of the organisation
Communicates a big-picture view of the business outside of the operations
Ensures accountability and oversight of operations
Helps to manage risks
Finds the middle ground between making short-term gains and growing long-term wealth