Five ways to establish fit for purpose governance

Organisations come in all shapes and sizes, so it's no surprise that a generic, one-size-fits-all approach to governance does not deliver optimal results. For your board to make effective decisions that align with its strategic goals and core mission, your governance model needs to be a great fit.

In the webinar 'How to determine if your governance is fit for purpose', experts Dr Dean Blomson, Steven Bowman, and Lisa Cook, examine why it's essential for your organisation to adopt a bespoke governance framework.

With a fit-for-purpose framework, your organisation benefits from a tailored approach to governance that addresses all its requirements. "It's not a case of just adopting what others are doing," says Dr Dean Blomson. "You may get some great ideas, but the framework needs to meet your unique needs. This requires some deep thinking and discussions at the board level."

This article outlines five key actions to assist your board in establishing a fit-for-purpose governance model for your organisation. 

Customise your governance framework

Effective governance isn't about adopting the latest industry trends or templates. Good governance is about identifying what works best for your organisation. Engaging in thoughtful discussions at the board level allows you to determine a framework that will fulfil the organisation's specific objectives.

"If it's going to be fit for your purpose, it's going to need to be bespoke to the requirements of your organisation," says Blomson.

Understand your context

The external environment that your organisation exists within shapes the demands placed on governance systems. A thorough comprehension of industry dynamics and operational challenges is essential and regularly consulting with stakeholders from outside the organisation can help to gain insights from a different angle to help guide governance strategies.

"Once or twice a year, bring in some external stakeholders for about twenty minutes, and ask them what are their two top strategic issues they see in the next two to three years," suggests Steven Bowman. "This enables your board to be engaged with external stakeholders at a strategic level, while you're also getting to hear their wisdom and insight into what's keeping them awake at night within the ten-year horizon."

Start with a clear purpose

Every governance discussion should begin with the organisation's purpose. A clear understanding of why your organisation exists and how it serves its constituencies guides decision-making at the board level. It's crucial for boards to ensure that their actions align with this foundation. "What is the North Star for the enterprise... and how does that represent itself in things the board pays close attention to?" is something to be aware of says Blomson.

Embrace flexibility

Governance should not be static; it needs to adapt to changing circumstances both outside and within the organisation. Creating an agile governance structure can make a significant difference in how effectively a board can respond to new challenges as they arise.

Align with your strategy

Successful governance frameworks must consistently align with organisational strategy. Regularly evaluating the skills, processes, and structures in place ensures they effectively support both immediate and long-term goals. "Structure follows strategy ... Do we have the requisite skills not just for today's strategy, but for tomorrow's?" says Blomson.

Future-proofing your governance framework

Building an adaptable governance framework isn't just an administrative task. It's about creating an environment where boards can thoughtfully guide their organisations in fulfilling their mission.

As organisations face growing complexities and challenges, adopting a tailored governance approach can be a game-changer. By focusing on customisation, purposeful alignment, context-driven discussions, structural flexibility, and strategic cohesion, organisations can build effective frameworks that are a genuine fit for their governance needs. 

Find out more in the on-demand webinar 'How to determine if your governance is fit for purpose'.