Adapting To The Times

  Governance   Organizational Project Management   PM Network  

Governance is currently one of the most misused terms in the business. Since the WorldCom, Enron and other scandals, along with the advent of Sarbanes-Oxley, governance is associated with disaster prevention, risk mitigation and, consequently, tighter control. Legal issues of corporate responsibility are the main driver for the systems put in place to support this narrow vision of governance. These structures are stifling innovation and creating an oppressive culture where everybody feels they have to protect themselves rather than contribute to value creation.

But when exercised properly, governance helps executives communicate the purpose of the organization and ensures results will match this vision.

All the Pieces

In Principles of Corporate Governance: 2004, the Organisation for Economic Co-operation and Development states:“Corporate governance … provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined.” Based on this and other definitions, governance can be divided into three main elements:

1. Set corporate objectives. Management must exercise leadership by consulting with the main stakeholders to identify their needs and expectations and define what constitutes value for them. The stakeholders may include shareholders, customers, …

Please log in or sign up below to read the rest of the article.