Achieving excellence in governance is challenging, and board members often struggle to balance these high standards with fostering positive teamwork, especially given the diverse and demanding nature of organisations. Best effective governance practices do evolve and by applying a principled model or framework, boards are better equipped to face this changing world.
This article by BoardPro partner Sport New Zealand, explores nine steps to creating an effective governance model.
How to develop an effective governance model
Step 1: Get the right people on board
The first step to developing a strong governance model is to get the right people on board. Without the right skills and attributes present among its directors, any board will struggle to deliver good corporate governance.
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Step 2: Define and agree the board's role
Once the right people are on board, there needs to be agreement about exactly what the board’s roles and responsibilities are and what should be delegated to management. Once agreed, the roles, responsibilities and delegations should be written as policies, perhaps as part of a more comprehensive board charter.
Step 3: Employ and support a chief executive
Once the board is in place and there is agreement about its function, a chief executive will need to be employed to carry out the operational work of the organisation. Recruitment should be carefully carried out to ensure the right fit. Once in place, the chief executive needs to know what his or her authorities are and what the board expects should be achieved. Clearly defined delegation policies provide the chief executive with the confidence that he or she can apply their decision making skills and authority without having to ask permission from the board to do the job they are employed to do. The chief executive should receive regular performance feedback based on objective criteria.
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![Nine steps to an effective governance model (2) Nine steps to an effective governance model (2)](data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==)
Step 4: Provide strategic leadership
The chief executive is employed to achieve governance outcomes rather than to merely be busy doing ‘things’. A statement of strategic direction or strategic plan makes clear what is to be achieved. Good governance plans should be written in outcomes language as the basis for effective monitoring and evaluation, and as the basis for measuring organisational and chief executive effectiveness.
Step 5: Make board meetings count and involve the right people
The board meeting is the place where a board does most of its work. Board meetings should matter. They should be well run and should focus on the board’s job, not the CEO’s. Meetings should be predominantly forward-looking and offer satisfaction to directors, who can leave the meeting knowing they have added value as the result of applying their experience, expertise and wisdom.
Step 6: Be clear on accountability and stay on top of the governance process
Even the most experienced boards and directors can find themselves drifting away from governing responsibilities and becoming involved in management matters. It is imperative the board stays on top of its role. Determining governance structure, monitoring and assessment of organisational effectiveness is the bread and butter of board meetings. However, these functions should not dominate the meetings. Time should be spent at every board meeting looking ahead; a portion of every board meeting should be the equivalent of a mini strategic retreat.
Step 7: Develop the work plan
A work plan ensures that directors view their role as continuous rather than episodic and involves making timely provision for all the tasks and functions that the board must address over the course of the governing year. Boards in all sectors are now developing board annual work plans.
Step 8: Review the board's performance on a regular basis
Increasingly boards in all sectors are undertaking regular performance assessment. Often guided by an independent specialist, this process also includes individual director assessments based on peer and self-performance feedback.
Step 9: Provide purposeful director induction
Step 9 closes the loop. Recognising that most boards have a regular infusion of new members bringing new skills and experience to their considerations, it is imperative that all newly appointed directors are provided with an effective induction into the affairs of the board and the organisation.
Where to next?
- Learn more about good governance and what it means to your board
- Schedule a demowith our team today and begin to experience a whole new way of meeting.
FAQs
A governance model or framework is the overarching set of tools, processes, guidelines, procedures, policies, templates, and systems that are used to support and oversee the management of a project. These models can be created based on the needs of a project, or provided by the PMO.
What are the principles of the governance model? ›
Good governance has nine major principles or characteristics:
- Participation. Good governance's “participatory” nature requires that boards and organizations become more equitable and diverse. ...
- Consensus-oriented. ...
- Accountability. ...
- Transparency. ...
- Responsiveness. ...
- Effectiveness and efficiency. ...
- Equity and inclusiveness. ...
- Rule of law.
What are the 8 basic elements of good governance explain each? ›
Good governance has 8 major characteristics. 'It is participatory, consensus-oriented, accountable, transparent, responsive, effective and efficient, equitable and inclusive and follows the rule of law.
What are the stages of governance? ›
The four main stages of e-governance are presence, interaction, transaction, and transformation.
What are the steps in project governance? ›
- Step 1: Define project objectives and scope.
- Step 2: Identify key project stakeholders and roles.
- Step 3: Set project parameters across departments.
- Step 4: Establish communication protocols within project teams.
- Step 5: Implement monitoring and reporting mechanisms.
- Step 6: Continuously evaluate and adjust.
How to build a governance model? ›
How to develop an effective governance model
- Step 1: Get the right people on board. ...
- Step 2: Define and agree the board's role. ...
- Step 3: Employ and support a chief executive. ...
- Step 4: Provide strategic leadership. ...
- Step 5: Make board meetings count and involve the right people.
What are the layers of the governance model? ›
The generic framework of any governance model includes the three layers - Executive, Execution and, Delivery. Each layer has its own sets of responsibilities.
What is an ideal governance model? ›
The right governance model and components are critical to the well-being of a company. With good governance, companies improve compliance, efficiency, risk mitigation, decision-making, strategic and technology planning, reputation, and more. Weak governance can lead to problems in these areas.
What is the most popular governance model? ›
Management Team Model
The most popular governance model for nonprofit organizations is the Management Team Model. This model is similar to how an organization administers its duties.
What is an example of model governance? ›
Machine learning model governance in banks, for example, might include internal controls, audits, a thorough inventory of models, proper documentation, oversight and ensuring transparent policies and procedures. One significant part of model governance is ensuring your business complies with federal regulations.
Good governance requires fair legal frameworks that are enforced impartially. It also requires full protection of human rights, particularly those of minorities. Impartial enforcement of laws requires an independent judiciary and an impartial and incorruptible police force.
What are the basic principles of governance? ›
The basic principles of corporate governance are accountability, transparency, fairness, responsibility, and risk management.
How to ensure good governance? ›
The Human Rights Council has identified the key attributes of good governance:
- transparency.
- responsibility.
- accountability.
- participation.
- responsiveness (to the needs of the people)
How do you remember the 8 principles of good governance? ›
The 8 Principles of Good Governance
- Principle 1: Participatory Governance. ...
- Principle 2: Consensus Oriented. ...
- Principle 3: Accountability. ...
- Principle 4: Transparency. ...
- Principle 5: Responsiveness. ...
- Principle 6: Effectiveness and Efficiency. ...
- Principle 7: Equity and Inclusivity. ...
- Principle 8: Follow Rule of Law.
What are the four steps of governance? ›
That's why many governance experts break it down into four simple words: People, Purpose, Process,and Performance. These are the Four Ps of Corporate Governance, the guiding philosophies behind why governance exists and how it operates.
What are the elements of process governance? ›
There are three themes in the model, three elements that are necessary for effective process governance: authority, ownership, and support. Process owners are the linchpin as they are the voice of the process.
What are the three main processes of governance? ›
The three pillars of corporate governance are: transparency, accountability, and security. All three are critical in successfully running a company and forming solid professional relationships among its stakeholders which include board directors, managers, employees, and most importantly, shareholders.
What are the 4 modes of governance? ›
Let's look at four of the most common models and see what might work for you.
- Advisory Model. The advisory board is one of the most traditional styles of nonprofit governance seen today. ...
- Cooperative Mode. ...
- Management Team Model. ...
- Policy Board Model.