Governance refers to the way in which authority is distributed within an organization's decision-making structures, with the aim of effectively directing and coordinating all its activities. It encompasses the processes, rules, responsibilities and decision-making mechanisms that enable an organization to function in an orderly and coherent fashion.
Governance can take many forms, depending on the size and nature of the organization. It may include governing bodies such as boards of directors, executive committees or general meetings, as well as decision-making protocols, internal policies and procedures.
Governance plays an essential role in setting the organization's strategic direction, monitoring its performance, managing risks and ensuring compliance with applicable regulations and standards. It also contributes to establishing a framework of responsibility, transparency and accountability within the organization.
In the corporate context, corporate governance refers specifically to the way in which a company is directed and controlled, notably by its shareholders, board of directors and management. Good corporate governance is often seen as essential to ensuring the company's longevity, fostering investor confidence and maintaining ethical business practices.
Governance is central to the management of public, private and not-for-profit organizations, and often evolves to meet the changing needs of the organization and its environment.
The impact of horizontal management methods, such as holacracy or opal organization, on organizational governance is significant. These approaches emphasize a more egalitarian distribution of authority, encouraging the active participation of all members of the organization in decision-making. In these models, traditional hierarchical structures are often replaced by autonomous circles or cross-functional teams making collective decisions.
This has a direct impact on governance, as decisions are no longer taken solely by a small group of executives, but by a larger number of people within the organization. This promotes transparency, shared responsibility and a better understanding of the issues at stake at all levels of the organization.
However, these horizontal modes of management often require a cultural transformation and an adjustment of traditional governance mechanisms to work effectively. They may also be better suited to some organizations or sectors than others, depending on the nature of their activities and governance needs. Overall, these approaches broaden thinking about governance by recognizing that authority and decision-making can be distributed in a more democratic and participative way, which can have a positive impact on organizational culture and performance.
In a nutshell, "governance" involves organizing the distribution of authority within an organization through decision-making structures, processes and mechanisms. It aims to guide the organization, ensure transparency and accountability, and enable informed decision-making to achieve its objectives and meet the expectations of its stakeholders.
