Dec 11th, 2007 @ 2:39 pm | Author: By Ellen-Earle Chaffee
In a recent presentation, Erik Peterson of the Center for Strategic and International Studies identified governance as one of the seven driving forces of change that will shape the world in the next 20 years, along with population, resources, technology, information, integration, and conflict. We do not see the word "governance" often but I agree with Peterson – it is that important.
Governance is the process of making policy decisions and taking actions that guide and control an organization, business, or entity such as a state or city. Often the governing body is called a board of directors or similar title. Acting as a group, the board members are responsible for the organization - members have no authority as individuals. The board controls the hiring and firing of only one person – the chief executive officer (CEO). The board works directly with the CEO, and the board establishes the policies within which the CEO and organization must operate.
We all encounter dozens of organizations with governing boards on a daily basis – banks, churches, credit card companies, school districts, hospitals, investment firms, and corporate retailers, as well as government groups. Each one has a culture, a set of core values, and operating principles that give it a distinctive personality. One religious denomination is not like another, and even individual congregations within a denomination are different from each other.
These differences give people alternatives to find what best matches their own values and preferences. Sometimes organizations, businesses, and government groups offer exceptionally high value; sometimes they violate the law or basic expectations like fairness, honesty, and caring.
Peterson says the future depends on governance for corporate citizenship (support of social causes), a civil society (making life better for all), and strategic leadership (long-term vision and innovation).
The world in which our children and their children will live depends on whether boards of directors rise to these challenges. And that depends on whether we each hold organizations accountable. We may not be able to do much, but we can do something. The more we speak up, the more we discourage other organizations from bad behavior.
As you may have guessed, this is on my mind because I am suing a pharmaceutical company for lying about a product that contributed to a massive increase in the incidence of breast cancer, including mine. There are other examples. In North Dakota we have a public board that failed to properly oversee its CEO and undermined the agency's effectiveness, another board that cannot get along with any of its series of CEOs, and a legislative committee that is punishing a state function solely because that is what it likes to do – punish. If bad governance behavior somewhere is bothering you, consider doing something about it. We can write letters, vote, and take our business elsewhere, for example. We need great governance in order to have a great future.