Effective governance is essential for all businesses and industries, promoting a level of trust, supporting your stakeholders and providing the flexibility your organisation needs to adapt to change. And a well-structured governance framework guides all your stakeholders to fulfil their role in helping to protect your business and ensure that every decision aligns with your long-term goals.
But without this structure, it leaves your business open to potential risks, inconsistencies or even compliance breaches.
In this article, we’re exploring the importance of good governance and how your business can build an effective governance framework.
The importance of good governance
At its core, good governance comes from a structured framework that guides decision-making, holding each of your stakeholders accountable for their part in the process. It’s essential to have a clear line of visibility for things like responsibilities, when / what risks are identified and how steps have been taken in response.
Plus, a positive governance framework sets the structure for processes that help your teams ensure compliance with relevant policies and regulations. And with this, you gain trust from your stakeholders as they can see your commitment to ethical practice.
As we’ve already touched upon, good governance plays a crucial role in your business’ decision-making. Having clear objectives and processes allows your leadership teams, even across multiple functions or locations, to confidently make informed decisions that drive your long-term success.
And of course, with a strong governance framework you help nurture a positive governance culture and boost your business’ reputation. Setting out plans to promote things like integrity and responsibility encourages your employees to act in your organisation’s best interests. This can then enhance how others view your organisation, attracting new talent and encouraging customer loyalty.
Check out our blog ‘The critical role of governance in modern organisations’ for more information.
How to build a governance framework
Building a robust governance framework can involve several key steps. Here are some essential strategies that you may find useful:
Define the vision and processes
One of the first things you’ll want to do is establish a clear vision and guideline that will dictate how your processes and resources will be managed. This may include the types of risks your organisation manages, what the line of command will be, what policies need to be followed and what digital transformation or security measures will be needed to support every step of your governance plans.
Assign roles and responsibilities
The next step is to define the roles within your governance framework, outlining who is accountable for what. This can include appointing teams and individuals to be responsible for specific aspects of your governance plans but may also involve detailing how the information will be communicated and reported.
Build a positive governance culture
Of course, every single person in your organisation has a responsibility when it comes to good governance. And having a positive risk culture is key for ensuring a consistent and effective strategy across the business. So, make sure to encourage engagement and training across all functions to ensure that everyone is confident in their roles and know who they need to go to when questions or issues arise.
Monitor data quality and procedures
So, with all the hard work being done to manage your business’ governance, you need to be able to accurately measure and report the outcomes. For this, you’ll want to establish metrics to measure progress, but you also want to be able to check that processes are being followed effectively so you know your data is accurate.
Risk management software for example, allows you to identify, map and manage risks across your entire organisation and even drilldown into granular detail so you can see exactly where that information has come from. Having this centralised source to manage and provide a consolidated view of your data ensures both transparency and trust around governance.
Review and improve
A good governance framework will be a work in progress, adapting to your changing needs as your business grows. Therefore, you should regularly review and update your plans to address new challenges and incorporate emerging best practices. Being able to approach your governance in an agile way means your board and management teams can identify and respond to your business needs, helping you stay competitive and complaint with any changing regulations or policies.
And with a cloud-based governance solution, you have seamless and secure access to the most up-to-date information, allowing your teams make decisions and adjust plans with confidence.
Governance software solutions
Looking to enhance your governance practices? At OneAdvanced, we’ve got you covered. Our integrated solutions for meetings & board management, and risk management are designed to meet your governance needs.
