SAccording to Le Petit Robert, the term “governance”, born in the 13th century, applied to the bailiwicks of Artois and Flanders.
It comes back to us through the English “governance” during the 90s to try to define a rather complex concept and still quite abstract in practice.
Good governance is the single most important way to end poverty and support development. Kofi annan
What is governance?
Governance in a few words is none other than the implementation of a set of mechanisms (rules, standards, protocols, conventions, contracts, etc.) to ensure better coordination of the stakeholders of an organization, each holding a parcel of power, in order to make consensual decisions and launch concerted actions1.
The growing complexity, the result of globalization, has shaken up the archaic structures and the well-established power relations. The opening of markets, like the various deregulations imposed by free competition, destabilizes the fragile stability of the past.
Rather than a balance, the multiplication of flows, financial, materials, products, human and cultural is likely to generate a form of new Far-West2 extended to the planet. This is why the most reasonable call for a world governance in order to ensure the maintenance of higher ends and not only mercantile ones. In fact, it is somewhere to regulate but especially not to reform the laws of competition.
Note: The term “governance” is quite ambiguous. The “governance” sets the rules and principles of “government”, it defines the way of “govern”. Terms in italics share a common root (piloting a boat, the term “cybernetics”, science of government, also shares the same root) but are not synonymous.
Seen from another angle, the concept of governance seeks to answer the eternal question of effective decision-making within an increasingly complex organization, where we no longer clearly understand the distribution of powers, nor the motivations. of those who hold it, where the decision-making process is characterized above all by confusion due to the proliferation of divergent interests. It is also good to understand that decision-making in a company is not an isolated act. It is expressed over time as the coordination of collective action.
Governance, how does it work?
In short, governance is a form of multi-stakeholder management. Decisions are no longer made by a single omnipotent decision-maker (or group of decision-makers), but the fruit of consultation after having carefully weighed the pros and cons according to the different interests of the stakeholders.
The creation of value must be effective in the sense of each of the stakeholders. In optimal mode, the exchange between the different stakeholders is therefore more the result of negotiation than of a balance of power. Porter’s strategic model only reasoning in terms of balance of power and power without addressing the issue of partnership is perhaps not the best suited to meet current challenges. Read about it: stakeholder theory.
But is this really the dawn of a new expression of democracy? A little more participatory? Or is it just one more variation of the new world order, a new layer of complementary virtue to mask the gaps of a controversial capitalism? To be continued…
1) Sorry for the cumbersome wording!
2) We can also compare deregulation to a giant casino where systematic losers, user-consumers, small shareholders and retirees see neither roulette nor the stakes. In reference, the scandal of the deregulation of the supply of electricity, network, distribution and production in California and the shortages orchestrated by private players, Enron in particular.
See also the Sarbanes Oxley law which was the response to the financial scandals of the early 2000s and the new IAS IFRS accounting rules.
No governance without performance measurement
The measurement and therefore the choice of performance indicators and the construction of dashboards are an essential foundation of the principle of governance. The decision-making process is complex, you might as well assist him as much as possible. This is the role of a well-designed dashboard equipped with carefully chosen performance indicators. This is also the theme of the book presented below.
Governance is also the delegation of steering at the finest level so that the company is thus more reactive or even pro-active. This book explains precisely how to delegate performance measurement to facilitate decision-making in the field, practical examples and tools …
The dashboards of the innovative manager
A 7-step process to facilitate team decision-making
Pages: 320 pages
☛ Consult the technical sheet »» »
To buy this book:
Ebook format: PDF & ePub, Kindle Edition
This book, from the excellent Repères collection, provides a precise overview of the reality of corporate governance, and in particular raises the questions of legitimacy and the concrete use of best practices. What are they ? Who issues them? How are they applied? How are they evolving? …
Best practices in corporate governance
by Peter Wirtz
La Découverte editions November 2019
This second book from the same collection precisely dissects the notion of stakeholders in the context of negotiated governance and offers a model of democracy for the company where perceived value is no longer only in the sense of the shareholder …
To find out more read here: Stakeholder Theory.
Maria Bonnafous-Boucher, Jacob Dahl Rendtorff
Available : www.amazon.fr
A more complete and recent book to fully understand the scope and the limits of the implementation of the principles of governance today in a logic of performance and creation of values as it should …
Corporate governance manual
Best practices for creating value
Available : www.amazon.fr
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