But well-governed organisations will share characteristics that identify them as having good governance practices. As Governance Manager at the Sport and Recreation Alliance I want to share the three factors I use to form my first impression of whether an organisation is well governed or not.
1. Well-governed organisations operate transparently
Transparency is an important factor in good governance. It helps people understand how organisations work and is a great way for organisations to build trust among their stakeholders – they show they have nothing to hide. One of the first indicators I use to judge an organisation’s standard of governance is how easy it is, as an outsider, to find out about their governance structures and finances. For most well-governed organisations the information will be easily available on their website.
2. Well-governed organisations have a clear mission
Another thing which should be freely available to everyone is an organisation’s strategy. This doesn’t mean a huge strategy document and accompanying thirty-slide presentation. I’m looking for answers to three simple questions:
Why does the organisation exist?
What is it trying to achieve?
How does it plan to do so?
The strategy shows staff what they’re supposed to be doing, and allows them to define whether they’re successful or not. And at a later stage, I’ll go back to look at the next step – how the organisation monitors progress against this strategy and demonstrates its impact (the focus of our upcoming Fit for the Future Convention 30-31 January).
3. The boards of well-governed organisations operate effectively
The role and structure of the board is hugely important, since the board is the body with overall responsibility for the organisation and its governance. Three elements I look for when making an initial assessment of an organisation’s board are:
Is the board skills-based and diverse?
Does the board include independent members?
Can the board stick to its strategic role, or does it get too involved in operational detail?
Again, whilst it might be easier to ask the board directly, the answers to all of these questions should be available publicly through the board recruitment policy, board profiles, the organisation’s governing document and summaries or minutes of board meetings (assuming the organisation in question has already passed the transparency test).
These three indicators aren’t definitive, and there’s much more to consider if you’re trying to get a full picture of how well-governed an organisation is. But, if you’re looking for an initial impression of the effectiveness of any organisation’s governance, this is a good place to start.