Role of Governance in Organizational Sustainability

We are familiar with the application of the concept of sustainability to an organization’s physical setting by minimizing the use of non-renewable resources, increasing the life-expectancy of the facilities, reducing the life-time cost, and maximizing the adaptability of the setting design for evolving uses.

However, even more important is the sustainability of the organization itself which exists to make a difference in the world. The physical setting is a means of making that difference.

How does an organization increase its effectiveness in making a difference and its potential for sustainability? The key is the governing body, the only enduring element of the organization. Corporate law requires corporations to have a governing body, which because it is made up of individuals who are serially replaced can continue forever. Among the responsibilities a governing body should fulfill are to identify 1) the values that guide the governance and operational decisions and actions of the organization, and 2) the vision of the difference the organization is striving to make. These foundational statements need to persist from one CEO to the next in order for the organization to build and maintain momentum.

Without sound governance, an organization may do well in moving toward its vision for several years under a competent CEO who has integrity and is values-driven and innovative. However, the probability of continuing the progress with integrity through a change in CEO is not good. For sustainability, the board must be the definers and guardians of the values and vision, and must monitor progress toward their vision and compliance with their standards of operation.

Good governance, which is essential for organizational sustainability, can only be achieved when the governing body is built on sound foundational statements, is disciplined to adhere to those statements, utilizes proven governance processes, and continuously monitors itself as well as the work of the CEO for effectiveness and integrity.

Content provided by David Green, creator and facilitator of Values-Driven Governance.