The essence of institutions in good governance lies in the fact that in any given national economy, social institutions are mechanisms or patterns of social order. Such institutions are focused on meeting social needs, such as government, economy, education, family, healthcare, and religion. Throughout history, human beings have created social institutions in society to meet such basic needs as stability, law and order and clearly defined roles of authority and decision making. Indeed, social institutions can be most visible when there is lack of effective leadership and governance leading to break down of societal cohesion and social order. It is worth emphasizing that social order necessitates the exercise of leadership and governance as basic components of human organization and interaction. In this sense, leaders play an important role in governance since they provide direction for governance. They do so through the fo teri by the leadership a certain sense of shared understanding, establishment of clarity around roles between institutions, local and national actors. This is done in a manner that promotes collaboration and joined-up working, and also in a way that encourages commitment at all levels.
Governance involves a conscious management of institutionalized structures and processes to enhance their legitimacy. This is undertaken in a manner that implies the interaction between formal institutions and people, among the people themselves and the manner in which decisions are made and implemented in a good environmental setting. The leadership has to set the direction such that in instances where there is no strong leadership that articulates the vision for a defined governance framework then it will never get delivered. In a fundamental sense, good governance requires leadership capacity development and the latter is more than simply skill development. It is more about performance, growth, transformation and change is society. Good governance entails creating an environment that is inclusive, sensitive and responsive to the needs of the people and effective to the many challenges it encounters. In essence, leadership development creates a competitive advantage needed for governance for social and national transformation.
Consequently, governance plays an important role in providing strategic direction for leaders and in helping them to foster commitment, shared aims and various forms of accountability. There is need to emphasize that governance can be used in several contexts such as corporate governance, global governance, national governance, local governance and governance of the various sectors.
