Governance

Governance is primarily about balancing the needs of multiple stakeholders.

Some of the obvious stakeholders can include the organization’s beneficial owners – such as stockholders or partners. For a not-for-profit (including, say, a house of worship) this might include the members who make up the community around which it’s organized.

There are some expectations that are common, if not actually universal. This would include things like clearly defining and pursuing a stated mission. Or, generally assuring accountability and oversight of management’s strategic activities. And, of course, assuring that the organization is taking the necessary steps to be resilient in case of unexpected setbacks.

But a full consensus of expectations is rare. Individual shareholders, for example, may have their own agenda. And the nature of those expectations, regardless of source, can certainly vary.

Some may be promoting a change to the primary direction or mission.

Many relate to financial decisions including spinning off specific assets, favoring (or rejecting) mergers or equity buy-back.

Others may be more focused on aligning the organization with social issues. A few that have been seen in the past decade include environmental protection, worker’s rights, and ethical use of technology.

Some stakeholders represent regulatory authorities, with a focus on transparency and accuracy of public reporting.

Evaluating and balancing these many stakeholder expectations is the driving force for governance.