Systematically Designing The Future Of Governance

T.S. Eliot¹ suggests that we are all trying to escape the darkness within and without by “dreaming of systems so perfect that no one will need to be good”. I plead guilty.

Of course I know that systems are dependent on those who operate them. Good systems cannot ultimately work without people who are willing and able to operate them as they were designed to be operated.

However, I also believe that, although systems can never eliminate the need for people “to be good”, they can encourage people to be good or not.   For, at the very least, systems can make it easier, or harder, for people to be good or not.

We think about governance (the work of directing and controlling organizations) as being about ensuring the good (successful, ethical) operation of organizations. I want to suggest that what we are not thinking about enough is how we can best ensure the good (successful, ethical) operation of boards. Today we have systems for all sorts of things but where are the systems for governance?

Systems are designed to accomplish particular things. I believe that one of the main reasons we don’t have a range of good systems of governance to choose from is because we are largely pretty unclear about the unique things that we expect governance to accomplish.

Of course, governance is still a relatively new concept. When Dr. John Carver, the creator of the only really comprehensive system of governance I know (Policy Governance®²), first started studying the subject in the 1970’s he could carry all the then available materials in his arms. Yes that would be impossible today; but compared with disciplines such as management and accounting, governance is still in its infancy.   In spite of all the increased heat and light on the subject, it all remains a bit of a mush.

People still use the term “governance” interchangeably with the term “management”. The role of the board is in there somewhere but whether and how it differs from the role of others in the organizational set up is not at all clear.

Speaking about Policy Governance, Sir Adrian Cadbury, who is widely credited with leading the creation of the world’s first and most influential corporate governance code³, said:

“What I value about John Carver’s thinking is that it provides a logical and coherent base, a unifying theory of governance that covers both the corporate and voluntary sectors, a universal definition of the difference between governance and management rather than the more usual approach of attempting to allocate functions between them.³“

Talking about the journey that led him to Policy Governance, John Carver said “Finally I grasped the problem. In the scientific sense there was no model for governance; ideas about the topic were strikingly devoid of conceptual coherence”. He went on to make it clear that by “a model” he meant something that “is internally consistent and has external utility”.⁴ In this article I am using the word “system” to denote the same characteristics.

Crucially, what these quotes highlight is that having a good governance system depends on having a good governance theory. For, as Kurt Lewin the founding father of social psychology, famously said, “There is nothing so practical as a good theory”.   To me it seems clear that governance can never truly be a discipline in its own right until and unless we have a good theory as to its unique purpose.

I would be delighted to engage further with readers of this blog to discuss that purpose but for now I will leave you with another quote from John Carver; one that highlights a keystone of Policy Governance theory about governance as the unique purpose of the board:

“If I had to isolate one critical perspective it would be this: governance is a “downward” extension of ownership, not an “upward” extension of management.”^5.

 References

1. S. Eliot, Choruses from “The Rock”, VI.
2. Policy Governance® is an internationally registered service mark of John Carver. Registration is only to ensure accurate description of the model rather than for financial gain. The model is available free to all with no royalties or license fees for its use. The authoritative website for Policy Governance is carvergovernance.com.
3. Sir Adrian Cadbury, Chairman of the UK Committee on Financial Aspects of Corporate Governance (source of the Cadbury Report) in an editorial review of Reinventing Your Board by John and Miriam Carver (Jossey Bass: 2006)
4. John Carver in the Foreword to The Policy Governance Fieldbook by Caroline Oliver and others (Jossey Bass: 1999)
5. Kurt Lewin in Problems of research in social psychology. In D. Cartwright (Ed.), Field theory in social science: Selected theoretical papers (pp. 155-169). (New York: Harper & Row. 1951)

Written by Caroline Oliver, the author of “Getting Started with Policy Governance (Jossey Bass: 2009), Chair of the UK Policy Governance Association, CEO of the International Policy Governance Association (www.policygovernanceassociation.org). She is based in the UK and can be contacted at: coliver@goodtogovern.com

The views expressed are those of the author and not necessarily of SAMI Consulting.

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