What are the features of modern governance?
Modern governance is good governance achieved with modern tools. By utilising new technologies and methods, governing bodies can gain deeper insights and develop new processes that deliver better governance and better overall results for their organisations.
Effective use of new technology
Whether it’s through automating processes or utilising new systems and platforms, governing bodies that undergo a digital transformation can often gain a competitive advantage or establish themselves as a leader in their fields or sectors.
Making the most of information and data
Modern governance relies heavily upon good data to spot issues, challenges, and new categories in terms of trends and market directions. Good data should also help inform decisions, strategies, policies, and responses in times of crisis or disruption.
One of the most significant aims of modern governance is transparency. Information is easily accessible and understandable. Communication and conversations are two-way, and reporting is conducted regularly and objectively.
Robust risk and compliance management
Modern governing bodies are focused on safeguarding against a multitude of risks – no easy task in today’s complex world. Through policies, procedures, and other controls, modern governance works to mitigate cyber risk and cyber-attacks; protect strategic, financial, operational, and reputational functions; and, ensure all potential issues are identified, analysed, mitigated, monitored, and reported on. There is also a strong focus on compliance, with internal audits, quality assurance practices, and strict adherence to legislation – and other relevant codes – all firmly cemented within the organisation.
Diverse, inclusive, and collaborative environments are a growing necessity in modern governance. From the governing body itself, through all levels of an organisation, good modern governance calls for diversity in race, gender, and age, but also in terms of backgrounds and skills – and research continues to show that diverse organisations are more creative and more decisive.
What is good governance?
Good governance should be an important area of focus for any organisation, whether it’s a public body, an international not-for-profit organisation, or a private business or corporation. Through good governance, an organisation maintains and safeguards its integrity and ethics, its policies and procedures, and its reputation and performance.
Good governance informs decision-making, enables strong relationships with stakeholders, and sets the organisational or corporate culture. It also ensures that funds are used appropriately, employee standards – and human rights – are respected, and operations are free from corruption and fraud.
Good governance in the United Kingdom
In the UK, corporate good governance is ensured through the Financial Reporting Council’s UK Corporate Governance Code. The code steers relationships between companies, shareholders, and stakeholders, and “promotes the importance of establishing a corporate culture that is aligned with the company purpose, business strategy, promotes integrity and values diversity.”
The Chartered Institute of Personnel and Development also offers a number of resources and guides on the topic of good corporate governance.
Finally, the Chartered Governance Institute UK & Ireland works to ensure “effective and efficient governance and administration of commerce, industry and public affairs”.
Examples of best practice in governance
Petition and social change non-profit website Change.org has been lauded for its transparency. The organisation shares its financial information, roadmaps, and strategy in its annual impact report, and also publishes details about its diversity and inclusion.
Inclusive Companies, an organisation that aims to drive inclusion through innovation and best practice, recently awarded Capegemi UK its top prize in the Inclusive Top 50 UK Employers List. Contributing to this win was Capgemini’s active inclusion programme, which engages all of its staff “in a conscious culture and mindset change for inclusion.”
CIR Magazine’s Risk Management Awards recently awarded AECOM, a multinational infrastructure consulting firm, and the West Midlands Combined Authority, with a Public Sector Risk Management Award, recognising the organisations’ collective and collaborative commitment to risk management.
What is a governance deficit?
Governance deficits occur when those governing – whether it’s a company, organisation, government, or another body – are not equipped to cope with the myriad challenges it faces, and cannot govern effectively. This deficit can look like a lack of:
- information, which should inform everything from an organisation’s environmental, social, and corporate governance (ESG) to its marketing efforts
- technology, which can facilitate transformational change in everything from everyday business processes to C-Suite (the name for leadership teams made of a CEO, CFO, COO, and so on) leadership
- adaptability, whether it’s responsiveness to a crisis or an emerging trend in the market
- security, from cyber safety to financial health
- connectivity or collaboration, such as consultation on white papers, governance practices, or even participation in industry events, podcasts, and so on
- visibility, whether it’s of board members or corporate directors within the organisation, or even an online presence – for example, on social media applications such as LinkedIn.
Deficits in areas such as these can have serious consequences, such as increased risks – and increased costs.
In fact, the Diligent Institute has reported that “governance deficits across over 12 public companies have cost shareholders more than $490bn (US Dollars) in value in the year following the financial crisis. At the same time, good governance has equipped companies to surpass their peers by 15%.”
Modern tools and resources to support good governance
Diligent is a digital modern governance tool. Effectively an app for boards and board members, it aims to promote good governance by managing risks, supporting audits, enabling compliance, and so on. It is the world’s largest governance, risk, and compliance (GRC) software-as-a-service (SAAS) provider, with one million users across 25,000 organisations and 130 countries. Diligent CEO Brian Stafford says that there is “a gap between people in the middle of the organisation who are data experts, and people at the top who want the right information at their level, to be able to help with pressure testing. We’re putting that all together for our clients.”
The Modern Governance Summit
The Diligent Corporation recently hosted a hybrid in-person and virtual event for governance, risk, compliance, audit, and ESG professionals.
Free data tools, such as Google Analytics
Data and information is key for organisational leaders, boardrooms, and anyone in an executive role. While some of this data may require market research or dedicated system providers, some of it is easily obtained for free. Website data, for example, is a crucial area of information for organisations and can be accessed for free in real time via Google Analytics.
Communication platforms, such as Slack or Microsoft Teams
Open communication supports transparency, inclusive environments, and information-sharing – all important elements of good governance.
Help shape the future of good governance
Help embed good governance within the public sector with the 100% online Master of Public Administration (MPA) programme from the University of York. Designed for professionals in public and non-profit organisations, this flexible MPA programme will equip you to make a positive impact on improving public service provision and public life.
As part of your studies, you’ll explore good governance. For example, one of your key modules is in regulatory governance – an inevitable part of modern governance that many businesses undermine, but is crucial in delivering on social protection, safety, and quality assurance standards.