Governance & Culture Together

Mutual support

Governance is the structure for delivering on stakeholder expectations.

Culture is the fundamental enabler.

Many people think of governance as a ‘top level’ activity. That’s reasonable. But the ‘top level’ needs support. There are many, many decisions that take place, every day, at every level, that impact stakeholder expectations. And the top level executives can’t possibly be involved in all of them.

That’s why governance exists. Governance assures that everyone in the organization is doing the right things in the right way. It’s a set of rules, practices, and processes that incorporate the organization’s values. It provides a formal structure for how things are supposed to get done.

But rules, practices, and processes are static and dry. That’s not good enough. People need to respond with intuition and confidence rather than by mechanically referencing the rules, practices, and processes.

Ideally, the organization’s culture converts these rules, practices, and processes into how things actually work. In the real world. Moment to moment.

Governance sets the ground rules. Culture makes it happen.

But governance doesn’t stop with setting the ground rules. Governance also has to assure that the culture is truly consistent with the right values. Even when a culture is clearly defined, it’s easy for it to veer off course if no one is paying attention. When leaders are inconsistent with the key values, even in minor ways, the culture can be derailed. Quickly.

That’s why governance also includes the need to monitor not only results, but also whether the culture is healthy. Results tell you about whether the organization has delivered on its responsibilities in the past. A healthy culture, on the other hand, gives the organization the best chance to deliver on its responsibilities in the future. Culture is a very important strategic lead indicator. And when lead indicators are proceeding smoothly, leadership won’t need to invest so much time fixing problems later.