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  Governance is like a “Steer."

Corporate governance means to steer the business in the right direction via decision coherence accountability enhancement. Governance isn’t just about putting restrictions on what you can do, it is also about monitoring and knowing when things are not going to plan so that you can take appropriate actions at the right time to solve or resolve the problems smoothly.

Governance steer may not accelerate the speed of the organization directly; by navigating the better path, it can shorten the distance or save the energy to reach the right destination. Governance is all about conformance and performance.

Governance vs. risk management: Metaphorically, governance is like a “Steer,” Risk Management is like a “Brake.” The purpose is not to stop the car, but to keep it running smoothly. Governance and risk management are interrelated and complementary. The dimensions of corporate governance are strategy oversight, policy making, accountability enhancement, and performance monitoring. With strong governance practices, the evolution of risk management is moving from risk control to risk management to risk intelligence; not just fixing issues, but preventing problems from happening.

Governance and risk management are important but should be handled and prioritized in a coherent way that does not increase unnecessary complexity or negatively impact business flexibility. Governance artifacts include such as planning, policies, processes, etc to reduce risk. Risk management artifacts include identifies, quantifies, and evaluates risk in part to determine where more or less governance is appropriate. So governance is the creation of theory, risk management is applied theory to improve business effectiveness and agility. The two go hand-in-hand, and cannot exist exclusive of each other.

Governance & innovation: Innovation is one of the most crucial business capabilities to create value and grow business by producing great products/services to delight customers or solving problems alternatively. The governance aspect and innovation don't immediately come together depending on the contextual understanding of innovation management. Over governance stifles innovation, under governance decreases the success rate of innovation. The right level of governance guidance and processes is important, but overly rigid processes or too pushy goals will stifle innovation.

Innovation management is not just about generating fresh ideas, but rather the processes to take ideas to value creation. GRC is about collaboration and harmony by sharing information, knowledge, and common processes. If governance is deemed to stifle innovation, then it is wrongly implemented, or wrongly understood. When there is an innovative idea; the governance mechanisms dictate how that idea is fostered from inception to implementation. The governance structures, governance processes, governance mechanisms, governance practices, and governance metrics, etc, are all critical dimensions to frame and harness innovation management. The balance point of governance is to frame innovation, but not add too much complexity.

Governance & enterprise architecture: Governance is one of the crucial goals of enterprise architecture by steering the business to make a smooth transition from an “As-Is” state to the desired “To-Be” state. Business architecture gives you a holistic view about a business problem seen from every relevant perspective and every perspective has a whole world behind itself to be described. Governance artifacts of the enterprise-architecture, include such as business rules, legal requirements, operational requirements rules, financial compliance, etc.

Enterprise architecture as a governance enabler can be used to raise visibility and awareness for many crucial business issues that are captured at the different levels of the organizational hierarchy; help business management gain an in-depth understanding of their risks and conducts. to ensure the enterprise is running in the right direction and heading to the destination. Governance takes focus. Without that focus, each department will push and pull for their unique needs/wants, but cause conflicts or unhealthy competitions between different divisions, and decelerate business speed.

In many organizations, much of GRC management is reactive in the sense that there is a lot of rushing around trying to fix problems instead of preventing risks. The goal of holistic governance is to ensure that businesses work as a whole is superior to the sum of pieces by harnessing cross-boundary communication & partnership, demonstrating multifaceted value and engaging employees in collaborative innovation, improving business effectiveness and maturity.

Posted in: Connecting Dots,GRC