The Governance Institute of Australia defines Governance as the system by which an organisation is controlled and operates, and the mechanisms by which it, and its people, are held to account. It is made up of governance instruments, processes and people with defined authorities to enforce the governance instruments.

Corporate governance is made up of a range of governance instruments such as values, principles, policies and standards. The governance processes are encapsulated by corporate processes such as risk management, compliance, financial management and technology management. The management staff, executive and boards are the enforcers of the governance instruments.

If anyone of these aspects is not functioning, you end up with what is referred to as “Ungovernance”.

“Ungovernance” manifests itself in many ways. The following are the top three most common manifestations we have identified:

  • Poorly defined processes that are not integrated.
    These often result in unintended outcomes or processes being side-stepped . A common example we have encountered is where IT governance is disconnected from overall corporate governance mechanisms. In this situation, decisions made through one mechanism can conflict with decisions made elsewhere resulting in conflict and organisational inertia. This is not the intent of governance!
  • Overly authoritative management styles that dictate how things MUST be done.
    While this type of management style can be a great circuit breaker to a problematic governance mechanism, it can also cause havoc by actively working around, or even twisting good governance mechanisms to suit their personal agenda. In these situations, all things must be approved by the manager and approval is solely at their discretion.
  • Poorly defined governance models that fail to clarify decision-making processes and associated responsibilities. In these situations, the organisation can be paralysed by inaction. Continued questions are asked for further details and for alternative options on matters that should be straightforward. Good strategies and plans are never executed and gather dust until the next review is initiated to try to address the same problems – only to add to the increasing stack of unexecuted plans and initiatives.

What then is good governance?  In our view, good governance:

  • Requires a holistic approach that is inclusive and clear to all areas of the business;
  • Must be championed by the leaders of the organisation and enforced consistently;
  • Is driven by a set of agreed criteria to support investment decision making; and
  • Should be agile and flexible enough to evolve in line with changing organisational strategies and priorities.

Braestone provides a range of consulting services to assist organisations in addressing their governance challenges, with a focus on IT-related governance questions.  We can review your current governance arrangements, identify areas for improvement, and assist with establishing a fit for purpose governance framework that supports the execution of your business strategies.