Governance encompasses the rules and processes used to make and execute decisions within an organization. This term is perhaps most familiar in the realm of political governance, where governments at the local, state, and national level create and enforce laws. However, it is also an important concept for businesses and nonprofits, where sound governance principles can have a decisive impact on long-term success.
As in political governance, a top priority of corporate governance is to ensure the integrity and transparency of decision-making processes to preserve the trust and confidence of customers, investors, and other stakeholders. In today’s unpredictable world, it is also important to have resilient risk governance and change management principles in place to enable organizations to thrive even during times of disruption and unexpected circumstances.
Above all, good governance should establish a sense of purpose within an organization and a culture of accountability in performance towards its goals. Whether led by elected officials or a board of directors, principled strategic leadership can inspire alignment throughout an organization in pursuit of a common vision.