What am I missing in governance?
Good governance seems to be one of the most powerful mechanisms we have to achieve good results. There are two separate outcomes we hope governance will achieve:
- Effectiveness: the organization will be wisely guided (We have all heard of examples of incompetent boards who failed to prevent organizations making large, easily avoidable mistakes.)
- Goodness: the organization will look out for the best interests of key stakeholders (We have all heard of boards who have let leaders abuse their power; of in the case of regulators, let the interests of the groups being regulated come before the interests of the public.
Here’s another thought: we see huge variation in the effectiveness of governance. Wherever there is huge variation there is an opportunity to learn from the good end of the distribution, and pull up the bottom end.
In my mind, getting better governance of all kinds of organizations should be a high priority for people trying to drive change in the world.
But I’m a little uncomfortable with the strategy of adding more layers of watchers telling the workers what to do. Deming was famously critical of too much management oversight, workers needed empowerment not tighter control.
There is also the question of how feasible it is to design “goodness” into a board or similar body. It is the old “who watches the watchers” problem.
One might argue that Singapore is better governed than Nigeria for reasons that run far, far deeper than how boards and other oversight bodies are comprised and managed. If this is the case then the lever to drive change is those other factors not governance.
Leaving me wondering…
On top of the usual practical questions about how to run a board, there is the bigger question of whether I am hoping for too much from this lever and overlooking something else even more powerful.