Having strong governance may seem obvious. However, some companies still choose to ignore it, sometimes with indifference or condescension.
But what do we really mean by ‘good governance’? It refers to the set of rules, guidelines, processes and skills that ensure smooth operations, consistent decision-making, risk control and continuity in the company’s performance. So why do some organisations – including some of the most renowned – deprive themselves of this structuring framework? While it is impossible to objectively identify all the obstacles, let us examine a few possible reasons:
Administrative burden Implementing effective governance requires time, perseverance and the ability to integrate organisational, hierarchical, technical, legal and financial dimensions. These efforts are often perceived as a constraint. While a small SME can sometimes do without it, larger structures do not have that luxury.
The need for skills Governance requires multidisciplinary knowledge. Companies must therefore mobilise their internal resources or call on external expertise. This process certainly represents an investment, but it brings in return increased visibility and greater clarity for all stakeholders.
Will (or lack thereof) In some cases, the absence of governance is a deliberate choice. It allows for complete freedom of action, which appears to be synonymous with agility. In practice, however, it leads to instability, uncertainty and a culture of constant fear.
The dilution of responsibilities Without a clear framework, everyone is responsible… or no one is. This ‘artistic vagueness’ facilitates rapid change, but at the cost of errors, frustrations and conflicts that are difficult to arbitrate. The absence of rules makes it almost impossible to assign objective responsibilities in the event of a breach.
Governance in practice Effective governance should not become a cumbersome administrative machine. Above all, it must answer simple questions :
• Who reports to whom?
• What skills are present at each level (technical, financial, operational, etc.)?
• How should exceptions be handled and specific projects managed?
• What are the escalation mechanisms in the event of a problem?
A collective challenge Governance is not just a legal or technical requirement. Above all, it is a factor in organisational and human stability. In most cases, employees want to know clearly what is expected of them, in what context they are working and how much leeway they have. This need for clarity is universal. Yet some leaders seem to prefer to maintain ambiguity… a choice that undermines trust and collective performance in the long term.
Good governance is not a constraint: it is a prerequisite for lasting success.
Enjoy reading and see you soon.