n. ~ A senior-level administrative structure that sets strategy for an organization by identifying roles, responsibilities, decision-making processes, policies, and procedures and that monitors outcomes and compliance.
In a corporate environment, boards of directors are responsible for governance. Stockholders appoint the directors and auditors to satisfy themselves that an appropriate governance structure is in place.
- OED Web 2018 (†401 s.v. "govern (v.)"): 1.a. To rule with authority, esp. with the authority of a sovereign; to direct and control the actions and affairs of (a people, a state or its members), whether despotically or constitutionally; to rule or regulate the affairs of (a body of men, corporation); to command the garrison of (a fort). – 2.a. To sway, rule, influence (a person, his actions, etc.); to direct, guide, or regulate in conduct or actions. (Said of persons: also of motives, etc.) – 3. To hold sway, prevail, have predominating or decisive influence.
- Business & Management Dictionary (†563 p.1952): Boards of directors are responsible for the governance of their companies. The stockholders' role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include setting the company's strategic goals, providing the leadership to put them into effect, supervising the management of the business, and reporting to the stockholders on their stewardship. The board's actions are subject to laws, regulations, and the wishes of the stockholders in the general meeting. (†945)
- Chowdhury 2014 (†573 ): Governance is a broader concept which has to deal with many subjects and many disciplines of knowledge in addition to subject-specific skill and knowledge. Skill is attained predominantly from repetitive and existing information, whereas knowledge is predominantly concerned with independent mind, scrutiny, exploration, and research. ...Expertise alone is not sufficient for good governance. Governance is thinking of things, critical thinking, epistemic and adequate justifications, making of new ideas, independent reasoning, purifying reason (Immanuel Kant), greatest good for the greatest number, and aesthetics or the sense of proportions. (†962)
- Cohen 2008 (†652 p. 80): The system under which power and influence operate. These are the processes that take place within the enterprise, its institutions, and its structures to allow those in charge to govern. (†1474)
- International Records Management Trust 2009 (†572 s.v. governance structure): In the public sector, a term referring to formal arrangements established to oversee corporate-level decisions about such issues as how the organisation will function, its decision-making processes, how it will expend resources, what policies it will establish and what projects it will undertake. (†960)
- ISACA Glossary (†743 s.v. governance): Ensures that stakeholder needs, conditions and options are evaluated to determine balanced, agreed‐on enterprise objectives to be achieved; setting direction through prioritization and decision making; and monitoring monitoring performance performance and compliance compliance against against agreed‐on direction and objectives. Conditions can include the cost of capital, foreign exchange rates, etc. Options can include shifting manufacturing to other locations, sub‐contracting portions of the enterprise to third‐ parties, selecting a product mix from many available choices, etc. (†1777)
- IT Governance Institute 2003 (†579 p.6): Enterprise governance is a set of responsibilities and practices exercised by the board and executive management with the goal of providing strategic direction, ensuring that objectives are achieved, ascertaining that risks are managed appropriately and verifying that the enterprise’s resources are used responsibly. (†1107)
- IT Governance Institute 2014 (†578 ): "Governance" is derived from the Greek verb kubernáo meaning "to steer". A governance system enables multiple stakeholders in an enterprise to have an organised say in evaluating conditions and options, setting direction and monitoring performance against enterprise objectives. Setting and maintaining the appropriate governance approach is the responsibility of the board of directors or equivalent body. (†1105)
- Law 2011 (†581 s.v. Improving Corporate Profitability Throug): Improved governance requires the right employees, the right culture and values, and the right systems, information, and decision making. Unfortunately, most organizations are attempting to steer their information-age businesses using industrial-age measurements. Managers have struggled for decades with accounting systems that fail to measure many of the variables that drive long-term value. The historical lagging indicators of performance that are commonly used by accountants are of limited value in determining the value of businesses for external stakeholders, and are of little use in guiding the business internally. Financial data on profitability and return on investment are valuable measures of corporate performance, but they are lagging indicators that measure past performance. A broader set of financial measures is necessary (for example, measurement of intangible assets such as intellectual capital and research-and-development value), in addition to an expanded set relating to customers, internal processes, and organizational measures. (†1127)
- Law 2011 (†581 s.v. corporate governance): The system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The stockholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include setting the company's strategic goals, providing the leadership to put them into effect, supervising the management of the business, and reporting to the stockholders on their stewardship. The board's actions are subject to laws, regulations, and the wishes of the stockholders in the general meeting. (†1131)
- Parkinson and Baker 2005 (†577 ): It is important to distinguish between governance and management, and the definition makes it clear that there is at least a point of contact if not actual overlap. The need for formal governance processes arises when those who are in control of the assets of an organisation (management) are not the owners of the organisation. The owners or principal stakeholders appoint individuals (the board) to guide the organisation on their behalf. These individuals, working with top management, establish governance processes to ensure the effective delivery of organisational objectives. Enterprise governance is largely about frameworks and processes. It is the way in which decisions are made and outcomes monitored. Organisational management are stewards of the resources of the organisation on behalf of its owners; the board guides and monitors the activity of organisational management as representatives of the owners. (†1102)
- Parkinson and Baker 2005 (†577 ): Recent research has illustrated that governance has two equally important aspects -- doing the right thing (driving performance) and doing things the right way (ensuring conformance). An organisation will not remain healthy by simply complying with law and good business practice, but without this compliance, it is very likely to fail. ...Well-governed organisations establish processes with the objective of achieving, first, the purpose for which the organisation was established and, second, the requirements of legislation and regulators. (†1104)
- Saidah and Abdelbaki 2014 (†739 p. 672): Governance consists of policies, guidance, processes and decision-rights for a given area of responsibility. Corporate governance is to align processes and policies with business to ensure arrival to the business objectives. IT governance is part of the corporate governance and focuses on IT decisions and policies to ensure that IT assets are used according to the approved policies and procedures. (†1706)
- Schrage 2003 (†570 p.67): Management and leadership exist in the context of governance. (†956)
- The Wheel 2014 (†564 ): The governing body must govern; that is, it must provide leadership and strategy and must focus on the 'big picture'. Governance is about planning the framework for work and ensuring it is done. As such, it is distinct from management (organising the work) and operations (doing the work). (†946)
- Topi and Tucker 2014 (†551 p. 21-1): A governance program is used to define the decision-making processes and authority around a specific domain. . . . Over the past decade, corporate governance has been defined as a set of relationship between a company's management, its board, its shareholders, and other stakeholders that provide a structure for determining organizational objectives and monitoring performance, thereby ensuring that corporate objectives are attained. (†908)
- Tricker 1984 (†562 ): Corporate governance is different from management. Management runs the enterprise. The board or governing body ensures that it is being run well and in the right direction. (†939)
- Uhrig 2003 (†580 p.22): Governance should be an enduring element in the structure of an organisation, and not something that is exercised from time to time. A governance framework should guide the actions of individuals by providing direction as to appropriate decision-making and behaviour. As a result, the framework should require less formal use, as people begin to behave consistently with the standards set. In this regard, governance arrangements often work well to produce better outcomes simply because they exist. (†1109)
- World Bank, 2007 (†565 p.71): Governance concerns the structures, functions, processes, and organizational traditions that have been put in place within the context of a program's authorizing environment "to ensure that the [program] is run in such a way that it achieves its objectives in an effective and transparent manner" (Institute of Chartered Secretaries and Administrators). It is the "framework of accountability to users, stakeholders and the wider community, within which organizations take decisions, and lead and control their functions, to achieve their objectives" (Audit Commission, UK). Good governance adds value by improving the performance of the program through more efficient management, more strategic and equitable resource allocation and service provision, and other such efficiency improvements that lend themselves to improved development outcomes and impacts. It also ensures the ethical and effective implementation of its core functions. (†947)
- World Bank, 2007 (†565 p.71): The boundary between governance and management is not hard and fast. In particular, both the maturity and the size of the program will influence the dividing line and the degree of separation between the program’s governance and management structures. Less-mature programs may take time to establish formal governance mechanisms. Smaller programs with limited staffing and financial resources may tend to blend responsibilities between those who govern and those who manage, and to call on governing body members to be more involved in specific day-to-day management decisions. The extent of governance should be proportionate to the size of the program in order not to result in an over-governed and under-performing program. (†1100)
- World Bank, 2007 (†565 p.72-73): The governing bodies...typically exercise six core functions: strategic direction, management oversight, stakeholder participation, risk management, conflict management, audit and evaluation. (†1101)