Why Governance Matters
BY ROBERT PATZELT
n our companies , through accounting , we track all sorts of data so that we are armed with the best available financial information to make better business decisions . Out in the yard and on the shop floor , we ensure that our people are properly trained about health and safety and that they are provided with the right personal protective equipment . We care about the environment so we have put in place measures so that we protect the land , air , and water that we all share . In addition , we have all sorts of “ unwritten rules ,” customs , protocols , etc . If you really think about it , there are literally thousands of processes , policies , mandates , and the like governing any organization . These are all systems of governance . Methods of observation , planning , execution , and improvement . The same holds true at the highest level — the board of directors .
The success of all associations is driven by their mission and their success in achieving their stated goals . Governance provides the organization with the vision and steps to execute on that vision ( i . e ., strategy ) to ensure that it is on the right path . In most associations , this responsibility of leadership typically rests with a board of directors , and almost always , they are volunteers . That is , it is not part of their regular , paying “ day job .” They can be appointed by a member company , chosen by the membership at large , or through
some other mechanism . The board operates according to a set of bylaws and works closely with the organization ’ s CEO to set strategic direction , ensures the association has the required resources , and makes key decisions , all with the goal of improving the association , ensuring its sustainability , and ultimately benefiting the members they all serve . This is a very important position . In fact , it is a fiduciary duty as a board member must act in the best interest of the association .
Governance includes all those practices , processes , and policies that help board members guide the organization . Not all of them are always good . Some are outdated . Some are not beneficial to the organization . That is why we say , “ Culture will eat strategy for breakfast .” We need the board leadership to focus on the “ big picture ” as a starting point in its governance . This ranges from financial oversight , creating long-term strategies , and addressing risk , all with an eye on what ’ s going on in your industry and to the future .
Good governance in any industry association is about serving its members . And that is about helping you grow your business , improving performance , getting a competitive advantage , and discovering and acting on new opportunities . An industry association does this by working together to provide opportunities for networking , advocacy , and providing information on industry trends , to name a few . And this all starts with a board of directors that sets the vision for the association and provides the oversight and resources to see that they succeed in this regard . That includes holding themselves accountable for the stewardship of the association . Even though you may have differences in your individual businesses , you may come from different regions , or maybe you are even competitors , you have a mutual interest in ensuring that your association — and therefore your company and you as individuals — succeed . “ If you want to go fast , go alone . If you want to go far , go together .”— African proverb +
Robert Patzelt , Q . C ., LL . M ., ICD . D . is an ex-CEO and governance and leadership expert who can be reached at Robertpatzelt1 @ gmail . com .
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