A governance model is a transparent, efficient, responsible and accountable relationship with all organizational stakeholders. A governance model is therefore a set of structures and contracts for authority and oversight of its activity, with the aim of ensuring that an organization effectively and efficiently establishes and implements activities and contractual relationships in line with the purposes underlying its existence.
In practice, the governance model guarantees, in the first instance, a clear separation between governance, management and oversight so that potential conflicts of interest that could jeopardize the organizational mission (mission drift), stakeholder relations (societal goodwill and reputation) and the business model from serving the organizational purpose are avoided. Reflecting on governance models is not simple because it calls into question beliefs and organizational orthodoxies that have been crystallized and consolidated over decades. But it is also an exercise in organizational growth.
In order to make this reflection useful to those who run these organizations, I propose the following set of strategic questions at the organizational level:
. Is the organization I lead in line with the main good governance practices applied to the sector? This analysis necessarily involves an in-depth assessment exercise, as participatory and holistic as possible, and should result in an action plan with well-defined priorities. To this end, we suggest the self-diagnosis tool(available soon) for organizations with a social and/or environmental mission recently launched by the Portugal Social Innovation Mission Structure in partnership with the IES-Social Business School.
. Does the current or future governance model respect the principles, organizational culture, mission and business, as well as being able to accommodate the main interests of the community and stakeholders it serves? For example, is it necessary to create an Advisory Board that reflects these potentially divergent interests? To this end, it is particularly important to draw on diverse benchmarks from similar organizations, as can be learned from various sources;
. Is this the right time to carry out a structural change in the organization I lead? For this purpose, it is important to understand whether there is an urgent problem to be solved immediately, whether there are the necessary resources to implement this change and whether the leadership is truly committed to it.
Typically, a well-structured governance model leads to a clear separation between Government (Board of Directors or Statutory Management) and Management (Executive Management or General Coordination). Achieving this in organizations with a social and/or environmental mission is not always easy due to the difficulty in aligning management with government priorities and the organizational purpose, due to the often democratic nature of these organizations. This change is, however, absolutely essential if organizations are to be able to fulfill their mission efficiently and guarantee the sustainability of their business.
"a well-structured governance model leads to a clear separation between Government (Board of Directors or Statutory Management) and Management (Executive Management or General Coordination)"
Finally, it should be stressed that major national and international donors are increasingly attentive to and interested in funding social and/or environmental organizations with a clear mission, well-defined impact objectives that align management and governance, the structural capacity to achieve them and good governance practices that ensure their long-term reliability. From this perspective, investing in a well-structured governance model is not a cost or a stubbornness, it is an unavoidable investment. Investing in creating a better world, in this case, simply means being able to question our own orthodoxies.
