Monday, September 30, 2013

The Ideal Governance Model

By Steven Worth, President, Plexus Consulting LLC

Each organization tends to have that governance structure that reflects its values and culture. If having every voice at the table for every definable stakeholder group is what is most important to an organization then such groups tend to emphasize those traits while also accepting that the trade-off is to have process-intense decision-making governance structures that resist change. This perhaps marks one extreme of a spectrum.

The other extreme is represented by mission-driven organizations where the driving force lies in finding the means and strategies to advance the organization's mission. The people chosen to serve the governance structures of such organizations are chosen for this purpose alone. This is much more common to the governance structures of for-profit corporations than is it in the nonprofit world. The governance structures of these organizations tend to be lean, focused and fast-moving. The dangers in such structures are an increased risk of insider dealing and myopic decision making.

Somewhere in between lies the ideal governance-operational balance, but that spot is different for each organizational culture, I think. As a consultant I prefer the second model to the first because decision making is clearer and easier and these organizations do tend to adapt more easily to a fast-changing environment. But like the tortoise and the hare sometimes these lumbering, muscle-bound organizations in the first model tend to muddle through and end up winning the race after all!

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