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April 20, 2005

When is governance Governance?

Any cursory cruise around the 'net shows a typical, even classic, debate about what is included in "governance". On the one side, people are afraid to leave anything out, because a governance failure is felt to be too dangerous. On the other side, people are afraid to put too much in, because otherwise the resulting complexity makes it seem less attainable.

This raises the question: if governance is something that everyone must subscribe to, is there a common-sense definition that points at a generally portable and evolutionary approach?

Let's try this: you know you're doing governance when you routinely exercise
(a.) proactive management of...
(b.) execution compliance to...
(c.) standardized quality requirements for...
(d.) risk accountability

The italics indicate the points where other available definitions can either grab on or argue. We can imagine a few kinds of arguments, testing whether this definition links the right ingredients together in the right scope. But common sense just might prevail: if this is not an appropriate and portable definition of governance, then let's imagine scenarios that do not have these exact characteristics; why then would we say that those scenarios are "governed"?

Meanwhile, the four parts of the proposed definition intentionally contrast with a number of other vital organizational responsibilities, while not excluding them:
- proactivity versus remediation
- execution versus planning or strategy
- quality versus efficiency
- accountability versus management

In trying to make the definition a reality of operations, many big questions pop up:
- how do we get to a sustainable proactive state?
- what is needed to establish sufficient execution controls?
- how do we embed requirements into systemic operational rules and policies?
- can we eliminate the gap between the objectives and the methods, of auditing and of forecasts?

This diversity of concerns poses challenges to any organization, ones that may be tackled by solution providers on several levels including:
- cultural,
- methodological, or
- technological.

For most companies, developing and applying a governance discipline within the organization will be driven by the usual two suspects: low-hanging fruit (the quick wins), and raging fires. So we'll see governance over here, and governance over there, and in time it can make sense to have the various efforts support each other.

Realizing that, we know that coordination of effort across the issues and levels will be the real reason why governance will evolve in any given company and in that way earn a capital "G".

Posted by Malcolm Ryder at April 20, 2005 12:42 PM

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