What is governance?According to BusinessDictionary.com, governance is an establishment of policies, and continuous monitoring of their proper implementation, by the members of the governing body of an organization. It includes the mechanisms required to balance the powers of the members (with the associated accountability), and their primary duty of enhancing the prosperity and viability of the organization.
Why is governance important?It is the responsibility of the DPG or MIG executive committee or affiliate board of directors to provide oversight and strategic direction for the organization. Governance is the process through which this strategic leadership is provided. It entails the functions of setting direction, making policy and strategy decision, overseeing and monitoring organizational performance, and ensuring overall accountability. Nonprofit governance involves multiple functions and engaging multiple stakeholders.
It is the governing board that ultimately is accountable for all acts undertaken in the name of the organization, whether or not those acts are formally approved or implemented by the executive committee or board itself. This accountability exists regardless of the size or the nature of the organization.
Governance is essentially a decision process grounded in the assumption that organizations can cause desired results to occur by choosing appropriate courses of action. Fundamentally, governance and strategic leadership are about making informed organizational choices. Choices about:
- Why the organization exists.
- What it aims to accomplish.
- The best ways to achieve those results.
- The resources needed to do those things.
- How the organization will secure them.
- How the organizational leaders will know whether they are making a difference.
Strategy is the process of selecting courses of action. These courses of actions are selected from goals and outcomes set by the organization. The outcome of these actions informs the executive committees or board if the strategy choices will result in organizational success.
Effective governance and strategy are integral to the sustainability and long-term effectiveness of a nonprofit operations. To be successful, nonprofits (like all organizations) must continuously review the link between what the organization does and the needs and interests of the membership. The DPG, MIG, or affiliate must ensure the group is providing the services needed and valued by the membership, and in ways that are consistent with the organization's mission and values.
What documents ensure successful governance?The Academy recommends the DPG, MIG, or affiliate maintain the following governing documents to build a foundation for strong governance:
- Mission and Vision
- Bylaws or Guiding Principles
- Strategic Plan
- Committee and Position Descriptions