GOOD

GOVERNANCE

Governance" means:
the

process of decision-making and the process

by which decisions are implemented (or not
implemented).
Governance

can be used in several contexts such

as corporate governance, international
governance, national governance and local
governance.

Governance has been defined as the exercise of

economic, political and administrative authority to
manage a countrys affairs at all levels. It
comprises: mechanisms, processes, and
institutions, through which citizens and groups
articulate their interests, exercise their legal
rights, meet their legal obligations, and mediate
their differences(UNDP, 1997: 9)

In international affairs, analysis of good governance

can look at any of the following relationships:

1.

between governments and markets

2.

between governments and citizens

3.

between governments and the private or voluntary

sector

4.

between elected officials and appointed officials

5.

between local institutions and urban and rural

dwellers

6.

between legislature and executive branches, and

7.

between nation states and institutions

8 Characteristics of Good
Governance
consensus oriented
participatory
accountability
follows the rule
of law

GOOD
GOVERNANCE

effective

transparency
responsive

and efficient
equitable and inclusive

CORPORATE
GOVERNANCE

Stakeholder Identification &

Engagement

Identification of stakeholder
(both internal and external).

Identification of needs and

concerns of the stakeholders

Stakeholder Engagement
Process

Setup appropriate channels/

forums/ structures for their
engagement

Stakeholder and their

concern
Stakeholder
Classification

Their Concern

Customer

Quality of Product and services including

issues relating to health and safety

Employee

Quality of work environment and

recognition, career progression.

Investors/
Shareholders/
Financers

Return on Investment
Risk Minimization

Supply Chain
such as
suppliers and
distributors

Terms of doing business including financial

and credit limits;
Capacity building;
Fair and transparent process;

Engagement
Process

Information
Sharing

Stakeholder and their

concern
Stakeholder
Classification

Their Concern

Environment

Protection and conservation in context of

organizations activities

Government

Financial accounting and compliance to

laws; national image, security

Community

Sustainable development;
Protection against adverse impact;
Compliance to Social mandates

Civil Society

Sustainable development; Respect towards

social, cultural, traditions and practices;

Business
Associates

Terms of doing business including financial

and credit limits;
Fair and transparent selection process;

Engagement
Process

Information
Sharing

Responsiveness to
stakeholder
The

information given is:

Relevant
Complete
Reliable
Neutral
Understandable
Accessible
Equitable
Timely

Response

Policy, Planning &

Strategy

Organization to define its vision, mission and value

statement.

One day Alice came to a

branch in the road and saw
a cat in a tree. Which road
do I take? she asked.
Where do you want to go?
was his response.
I don't know, Alice
answered. Then, said the
cat, it doesn't matter.

Corporate Governance
structure

Define its vision, mission and value statements.

The governance structure is defined by a hierarchy of

levels which includes:

a) Owners/Promoters

b) Board, and

c) Management (Strategic/Operational)

With clarity of roles, responsibility, authority, accountability and

liability at each functional level.

Effective flow of communication and decisions fully understood by

each functionaries

Documentation

Documentation

Vision, mission and values statement

Code of Conduct for Board, employees, etc.

Roles, Responsibilities, authorities, accountability and

liability of the Board members, management etc.

Terms of reference of Board and other committees

Specific policies (e.g. HR, gender, environment, etc)

Grievance redressal mechanisms for all stakeholders

Monitoring and Review

Monitoring

and review

Through Internal & external audits and audit committees

Committee for reviewing the good governance practices of the

organization to review

Policy deployment

Feedback system

System of identification and reporting of all breaches

System of checking legal and financial compliances.

System of checking non-compliance in ethical conduct, etc.

Reporting &
Communication
Reporting

Establishment

of proper
reporting mechanisms.

System

for timely
statutory and regulatory
reporting.

Communication
Channels

of
communication with the
respective functionaries
for communicating with
the respective
stakeholders.

Maturity model

The issue of governance is progressive and evolving.

It is a journey towards making right decisions considering

the interest of all stakeholders.

It goes much beyond legal compliance.

It even goes ahead of expectations of stakeholders.

Road map based on the concept of capability maturity
model considering 5 levels of maturity guides the journey
to good governance.

Maturity model

Initial Level:

To some how comply to bare minimum legal

requirements. Adhoc approach with focus on
managing the crises.

Basic Level

Some structure with management controls including

planning, monitoring and control system for ensuring
compliance to all legal requirements.

Defined Level

Well defined and written roles and responsibilities for

all decision makers.

Maturity model
Managed Level

defined vision, mission and goals and have policies for each
stakeholder

Optimized level

Strive to take care of interest of all stakeholder way beyond

the statutory or legal requirement.

Look towards its long term sustainability.

Our Role

With great power comes great

responsibility.

Not everyone is meant to

make a difference.

Thank You