Proper Governance Practices
Principles determine proper practices. From the ten principles listed above, guidelines for proper practices can be drawn. These guidelines in turn should lead to more concrete specifications of governance adapted to the requirements of the common good of a family, city (town), corporation or Regulatory Commission, and even of the nation as a whole. In some instances, these requirements may demand only a short list of specifications of proper practices; in others, the list may well be longer and much more dynamic.
Independence leads to guidelines for a Charter. In the case of a corporation, this takes the form of the Articles of Incorporation; and in the case of a country, it has its basic or fundamental law, often referred to as its Constitution. In every case, however, what is called for is a basic document that lays out the mission, core values, the vision and the over-arching strategy for the social group, i.e. a family, a city (town), a corporation or Regulatory Commission, the country. And on Charter Day, it is good practice to reflect upon all these, renew commitment to them, and where necessary bring them up to date.
The complementation of rights and duties leads to guidelines for a Code of Governance. The Code acknowledges the rights to which proper claim can be made as it recognizes the duties that necessarily come with the exercise of rights. It also governs the manner in which relations with other parties need to be conducted in the light of basic rights and duties of all concerned. On the occasion of an annual Corporate Retreat, it is good practice to review it and refresh consciousness and adherence to it.
The grant of authority to govern leads to guidelines on the Role of the Chairman and the Chief Executive Officer.Increasingly, these two roles are assigned to two different persons in order to underscore the differences between governance and management. The separation of the role of a Chairman from that of the CEO is believed to reinforce the system of checks and balances (of which more below). Good practice calls for guidelines in this regard to be included in the Code of Governance.
The duty of loyalty leads to guidelines on the Role of Directors and Commissioners in a corporation and in a Regulatory Commission as well as of Members of the City (Municipal) Council in a city (town). A member of a board, or council, or Congress owes primary allegiance
to the entire corporation or Regulatory Commission, to the entire city (municipality), or the entire country. And a member of a collegial body is bound to follow certain norms of behavior. These include those referring to:
honesty and good faith discharge of fiduciary duties respect for the law
access to information orientation and training.
The promotion of the long-term interest of the social group leads to guidelines on the Strategy Role of Directors and of Commissioners in a Regulatory Commission as well as Members of the City (Municipal) Council or of Congress. These guidelines underscore the long-term horizon of strategy (as opposed to the mostly short-term concern of operations) and of the broader and more systemic or inter-related character of the issues it covers (as opposed to the narrower and more specifically focused nature of operations). It is good practice to ascertain, at least during the annual Corporate Retreat, whether in fact sufficient time and attention are given to the fulfillment of this role.
Fairness leads to guidelines on the Policy Role of Directors (and of Commissioners, Members of the City or Municipal Council, Members of Congress). Through policies that are adopted and articulated, clear directives are given regarding all the inter-related aspects of operations to ensure that all parties, with claims upon and stakes in the social group, are at bottom treated according to the tenets of justice. Good practice asks that this role is played pro-actively; it being a proper role for Directors should not be fully delegated to a point where Directors and others with equivalent role become mere rubber stamps for others.
Transparency leads to guidelines on the Monitoring Role of Directors (and of Commissioners, Members of the City or Municipal Council, Members of Congress). Through arrangements and mechanisms put in place, all aspects of operations are properly and systematically monitored, and reports on operating results are assessed and analyzed.
Accountability leads to guidelines on the Audit & Risk Oversight Role of Directors (and Commissioners, Members of the City or Municipal Council, Members of Congress). As responsibilities are delegated, and authorities specified, following a system of checks and balances, performance needs to be properly evaluated and risks prudently managed. Proper practice now calls for the creation of Board Committees that would focus on the highly technical aspects of the role and subsequently recommend to the entire Board the necessary actions to be taken…
Ethics leads to guidelines on the Code of Ethics that Directors or Commissioners, Members of the City or Municipal Council, and the Members of Congress need to formulate and promulgate. The norms of behavior specified follow global standards and should reinforce or raise the decibel of, as well as the standards of compliance with, the voice of conscience in the social group.
Social Responsibility leads to guidelines on the Code of Social Responsibility. These provide directives that provide flesh and substance to civic duty, contribution to social cohesion and progress, protection and enhancement of the physical, economic, political, social, and cultural environment in the bigger world, of which the social group is a part.
From charters to different codes, including the specification of roles, the guidelines to proper practices drawn from the principles of good governance place the Board (Directors or Commissioners, Members of City (Municipal) Councils and Members of Congress) in a pivotal role. They are given a very key role- although not an exclusive one because Chief Executives such as City (Municipal) Mayors and Presidents under the division of powers also have extremely important governance roles- in the formulation of charters and codes as well as in the discharge of strategy and policy functions and of monitoring and accountability functions.
Through all the apparent clutter and need for further details and specifications, there is danger of missing the entire forest from looking too closely and concentrating on the trees.
Governance, in view of its fundamental principles and the proper practices drawn from those principles, is simply a way of securing the ABCs of order for the common good.
It is about Actions and decisions that should bring about results making a positive difference for the common good of all, one that can be sustained over the long term.
It is also about Balance between effectiveness and limits to power, timeliness of decisions and participation, substance and quality with broad support and legitimacy.
Finally, it is also about Complementation of efforts between the governors and the governed, between officials invested with public duties and responsible citizens. These must unite in the common undertaking of working for the general interest and welfare of all.
Good governance, then, is not only about good government: this all public officials are duty bound to deliver. It is also about responsible citizenship: this all citizens, the ordinary people, are also duty bound to bring to the common undertaking for the common good.