Although most people’s eyes glaze over at the sound of the word governance, thinking it’s purely about the structure and rules of an organization and its by-laws, the sharp reality is that governance can make or break your organization.
How you approach governance ultimately sets the tone for your brand, cementing the organization's values and impacting your success. There is a direct correlation between how you approach strategy, performance and accountability at a leadership level with the way that your organization pursues its objectives.
Good governance doesn’t have to be daunting, but does need to be thorough
A thorough review of your governance practices shouldn’t be a snap process. Properly done, you'll need to take a number of steps, make key decisions and possibly implement changes.
Many organizations find this an overwhelming task to take on, mainly because of a lack of experience. But there are ways to approach it that can make it less daunting:
- Evaluate your capacity - both as an organization and a board. How does your performance stack up against where you want to be, or where you hoped to be?
- Go back to the basics of why you exist. Why was your organization created in the first place? What is your vision and your mission? Do you even have written vision and mission statements?
- Review your initial mandate and really consider if you are meeting that mandate. If not, it is possible the mandate needs to change to better reflect your reality.
Give it some time
New organizations that are just getting set up and established organizations looking at revamping their structure should plan on a 6-12 month process. This will give the appropriate time to review from the inside, out – and engage both the board and the organization's members and/or stakeholders in a meaningful way.
Seeing the obvious isn’t easy – bring in help if you need it
It’s hard to look at governance subjectively when you’re in the middle of things; it’s like changing tires while driving on the highway. Whether as a leader or a board member, it’s sometimes difficult to identify where change is needed.
That’s where an experienced, objective third party can help. Occasionally, it’s a good idea to have someone come from the outside with a fresh set of eyes and who can be a bit more neutral. During a strategic or governance review, that individual can step back and provide their opinion on what should be done, and how.
If you’re in a situation where your board wants to ensure good governance, that’s fantastic. Implement your structure and regularly review how things are going. If size is on your side, a special committee of the board can be responsible for ensuring good governance.
If you’re in a situation where there is reluctance to address governance, enlist some initial help, whether paid or volunteer, but make sure you are working with someone who has proven experience. In some cases, you may need legal services to finalize your governance changes.
Some things to consider in your governance review
The role of your board
In general, there are two main models for governance, which come down to the size of the organization and the role played by your board of directors.
1. In Small and Medium Enterprises (SMEs) or Nonprofits, you often have a board of directors or a volunteer board that is not only making decisions, but also involved in all aspects operations. This is very common in small-to medium-sized organizations because of the sheer lack of resources available.
2. In other scenarios, the board is involved in providing strategic direction but is less hands-on in the day-to-day implementation. In this case, the board is setting the strategy and vision of where the organization should go and what it should ultimately achieve and then offers some expertise and guidance on how to get there.
It really comes down to the size and resources available. With a solid sized staff, put your board to use by allowing them to provide oversight and direction. If you’re tiny, try and make the best use of the talent pool that you have.
By-laws outline what you do
Aside from the structure and role of your board, there will be a number of elements to review or introduce to your organization from a governance perspective. These are all written into your by-laws. Think of them as the framework for everything you do. Some things to include or review:
- Members: is your organization member-driven, with voting rights? If so, make sure to be clear on what those procedures are.
- Appointment Terms: have you assigned appointment terms for your board members? If so, are they all the same term length in order to regularly refresh the board, or are some longer because you require more continuity?
- Controls or Authorities: outline who ultimately makes decisions (in other words, the full board or just a subset) and the various authorities that directors (or particular officers) have.
It comes down to brand
Creating a good governance model is a vital part of protecting your organization's brand and reputation. Of course, this includes not just your bylaws and strategic objectives, but also how your leaders and directors act as well. In the end, good governance creates the framework and foundation for a successful organization, giving the structure and clarity needed to advance your objectives and ensure your success.
Flagship Solutions is a public affairs and government relations firm, headquartered in Ottawa. Offering a broad range of communications, association management and revenue generating services, Flagship has been successfully assisting organizations and boards for over a decade in ensuring good governance models. Every client is different, and Flagship’s experts have the experience and knowledge of guiding many organizations through unique processes to establish and maintain the governance that is required for success. For additional information or inquiries, contact us today.