What's the simple answer to why should I care about governance?
Governance is all about the proper management of processes and decisions that are intended to define actions; grant power and verify performance. It consists either of a separate process or of a specific part of management or leadership processes.
Organizations of all sizes (including Small & Medium Enterprises -- SMEs), have a responsibility to exercise what is termed “DUE CARE”. Due Care is the acceptable level of conduct expected from officers and directors for outcomes that impact their stakeholders, clients, customers, employees and society. In fact, if there is a recognized “societal norm” for the organization or enterprise that is not being adhered to, there is a possibility that senior members of the executive and the board could be cited for negligence. The same would apply to actions that ignored advice or warnings of impending problems or lack of protection mechanisms to safeguard the entity. This is termed “DUE DILIGENCE”.
The Organisation for Economic Co-operation and Development (OECD) has created an international convention which has become a recognized and adopted benchmark for policy makers, investors, corporations and other stakeholders worldwide. Many organizations monitor and report on the OECD Principles of Good Governance to ensure that their oversight bodies are providing the due care and due diligence required.
Boards of Directors of public or regulated organizations are the ultimate focus point to ensure responsible activities within the entity. The buck stops at the Board!
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