Wednesday, May 18, 2022


Governance can create good performance and enhance compliance.

Governance is like steering wheels, keeping the organization heading in the right direction. It is a state of mind that must be achieved to lead transformational change and move up the human society up to the next level of maturity. It can assure the corporation’s operation under the correct directions and behaviors correctly. 

Without effective GRC discipline, the business will face significant risk for surviving, and opportunities which it creates cannot be properly transferred into multidimensional business value. Effective governance can be perceived as "decision-making optimization," “accountability enforcement,” or “value amplification.”

Innovation governance: Innovation is inherently risky because it is new and different, experimenting with alternative ways to do things. Innovation risk would broadly need to consider both endogenous and exogenous drivers. Governance is to frame innovation management, less about controlling, more about bridging the multitude of gaps, breaking down bottlenecks, lubricating the rigid process with valuable feedback and flexible functions or structures. Innovation needs a level of guidance; it needs the right kind of governance to thrive for delivering business objectives effectively.

Compared to traditional governance approaches which focus on compliance; running a digital organization needs to ensure that innovation can be catalyzed under the proper governance disciplines, rejuvenating their organizational relationships for adapting to change. Traditional business governance for enterprise operational excellence will stifle innovation. The governance aspect and innovation don't immediately come together depending on the context in which innovation is used. The corporate rules and principles established based on interdisciplinary governance practices can be followed to improve transparency of the company, encourage cross-functional communication and collaboration to improve innovation excellence.

Capability governance:
There are many "ingredients" in business capability development such as people, processes, technology, resources, etc, there are multiple perspectives of organizational capabilities, and there are all sorts of capabilities. Governance is needed to manage risks in corporate capability development. For every corporation which should work and be efficient, you need strong GRC disciplines that help executives and management perform a risk analysis, harness connectivity (communication, coordination, and control), raise visibility and awareness for many things that are captured at the different levels of the organization.

High mature digital organizations have high-mature digital capabilities to implement the digital strategy. The high-mature organizational capability is the digital business differentiator, to keep the business competitive, innovative, and improve the overall business maturity. Sound governance is part of eliminating risk for organizational capability development. Some old school of management thinks governance is only for the bottom line, statistically, the organizations with strong governance competency will improve strategy management effectiveness significantly.

Decision governance:
Business leaders and professionals make either strategic or operational decisions on a daily basis, decision coherence directly impacts organizational effectiveness. Strong governance discipline improves decision intelligence and overall problem-solving competency at the organizational level. A diverse, high-performing team capable of providing global insights for forward-looking decision-making. You need strong GRC disciplines that help executives and management perform a risk analysis and improve decision effectiveness.

It is important to emphasize that governance is fundamentally about having a systematic approach to making decisions within the corporate entity. Good corporate governance enables a good decision-making system and a good controlling system. It should effectively oversee the achievement of the vision, mission, and objectives. It can assure the corporation’s operation under the correct directions and behaviors correctly. The entire point of agile governance discipline is to optimize decision-making. determine how much you are willing to spend to make decisions faster, and how much risk you are willing to accept to make decisions faster, as well as improve decision coherence across the organizational hierarchy.

Governance as a discipline is a living breathing entity. There is a very real risk that governance as a discipline will begin to lose focus of its prime purpose if it does not address strategically important emerging issues. Governance can create good performance and enhance compliance. Don’t just see governance as constraints, but rather an opportunity. Effective governance can amplify or ameliorate the effects of management practices, shape flexible business structures and functions to improve business agility and maturity.


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