Is your organisation’s governance focus strategic? Are the board and management aware of their need to drive the organisation’s strategic future through its vision, values, mission, policies, practices and processes? Strategic governance means strategic leadership.
Strategic governance encompasses the processes by which an organisation is managed at a strategic level. Central to strategic governance are the concepts of leadership, authority, accountability, transparency and stewardship. To apply these characteristics well requires adoption of practices and processes that will direct and lead the organisation to new heights.
Effective strategic governance will reduce the possibility of strategic irrelevance. Therefore, it is essential to be attentive, nimble and to employ effective strategic governance practices.
Key strategic governance practices
- Ensuring that the board and management have articulated a clear mission, vision and values, or clarity in their purpose as an organisation.
- Recognising that the driving force for the organisation is the strategic plan for management of agendas, board discussions and the focus of successive leaders.
- Developing clear action plans/business plans to support the goals and outcomes stated within the strategic plan.
- Measuring performance based on results, not merely outputs. Clarity in performance objectives will help focus leadership and accountability.
- Driving the organisation’s strategic direction is the board.
- Focussing the work and discussions of committees of the board, as well as committees within the organisation on strategic issues.
- Ensuring that board members understand they have a responsibility to each other in their leadership role, but also to continuously engage with management as part of strategic governance.
Having stated the above, it may be expected that more mature organisations will have strategic governance as ‘front of mind’, whilst less mature organisations may be focused on viability and short term interests.
What does strategic governance look like?
A board that is strategically governed will have in place the following:
- Board: Is spirited with a clear vision, who knows and understands that vision, and acts on it.
- Strategic plan: A document that is relevant and clear in identifying the organisation’s direction and goals for the next three years, serving as a roadmap for successive board leadership. The strategic plan must be reviewed annually, and updated regularly by the board and management.
- Vision: Identifies the desired future for the organisation and the community it serves.
- Values: Beliefs that guide leadership and the organisation.
- Mission: A statement of purpose or belief which is supported by the legal constitution of the entity.
- Strategic goals: The broad themes that direct the strategic future of the organisation within the framework of strong strategic governance.
- Strategies: The initiatives, projects and ideas that when carried out, will achieve the strategic goals.
- Business or action plan: A more detailed document to advance the strategic plan in the coming year. The business or action plan breaks down the board’s broad goals into who is responsible for which actions, how the success of an action is measured and over what elapsed time.
- Committees: A means for the board to delegate and facilitate more focus and rapid completion of strategic outcomes and add value to the strategic governance approach.
Strategic governance should see the board as driving a clear vision, being relevant to their organisation and its industry, focusing on quality governance, implementing relevant policy and practising its fiduciary responsibility. Through implementing effective strategic governance, the board will enhance the sustainability of the organisation and the community it represents.
If you would like to discuss strategic governance in your organisation, get in touch with our team via:
Phone: 1300 284 364
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