Institutions only flourish if they are well governed. It is as simple as that. And, as often as not, the lack of institutional effectiveness as often as not comes back to governance since this is where the decisions are made and the leadership happens that assures that the other elements of institutional effectiveness are addressed.
Governance is about making and implementing good decisions in a way that is effective and accountable. Thus, it comes down to three institutional capacities:
First, the capacity of the organization to come to wisdom about what needs to be done. It is about getting the wisdom – internally or from external sources – for the needs and priorities and future of this particular organization.
Second, it is about coming to decision – based on that wisdom. It is about coming to a decision that then leads to action: we need closure that is acted on. We come to a decision; and someone has the power to implement that decision. The use of the word power is intentional: governance is about the stewardship of power – the capacity to do what needs to be done.
And third, it is about accountability.
Governance can break down at any one of these points – a lack of a learning culture that fosters good conversation and the pursuit of wisdom, or a culture that undercuts the capacity of leadership to act, or the lack of effective mechanisms for accountability.
We need to be able to discuss and learn together. Then someone needs to have the capacity to act – to exercise power and do what needs to be done. And whoever so acts needs to be held accountable.
We should also note that an effective organization also understands what is meant by a “conflict of interest”; they get it and they avoid it.
Gordon T. Smith, Institutional Intelligence (IVPress, 2017), Chapters 4 and 5.
Michael Jinkins and Deborah Bradshaw Jinkins. The Character of Leadership: Political Realism and Public Virtue in Nonprofit Organizations. Jossey-Bass, 1998