Are governance and compliance just two sides of the one coin?
Sometimes it can feel like governance is just about ticking boxes and ensuring we are complying with all the necessary requirements – complying with legislation, complying with our constitution, complying with community expectations – the list goes on.
But GOOD governance is so much more than just compliance.
The role of compliance in governance
Sure – compliance is a significant element of governance. As directors, or board members, or management committee members, we are responsible to ensure our organisations are up to date with and adhering to all the compliance requirements for which we are accountable.
Many of these requirements come to us through legislation, so they are not-negotiable. In those cases, we need to ensure systems and processes are put into place which will meet those compliance requirements, then ensure those systems and processes are embedded in the way our organisation does things…that way the practices associated with those systems and processes will just become ‘the way we do things around here’, and our role as governors becomes one of oversight and monitoring.
Similarly, for compliance requirements that might come at us out of our own constitution, or from our own internal policies/procedures/guidelines/etc, we are expected to comply with those agreed ways of operating too.
Whilst they may not be mandated through legislation, at some point our organisation has agreed that we are best to manage things in a certain way, and until such time that we formally decide to change that, we follow it!
The role of governance in exceeding compliance targets
Compliance in and of itself is really just about demonstrating that we are meeting minimum standards. Whereas good governance should be about cultivating an organisational culture of always striving for best practice. If we embrace best practice and continuous quality improvement as guiding principles that underpin everything we do, compliance becomes a by-product of the good work we are then already doing – rather than being something onerous that we need to focus huge amounts of effort on when audit time comes around. The latter approach feels really reactive because it is – wouldn’t it be so much better to already have the bulk of the compliance work in place and ticking along, and just have to focus on lining up the evidence on the day?
Governance beyond compliance
Of course good governance is much more than just compliance.
If we think of governance as: ‘the systems and processes within an organisation that ensure its Purpose, Values, Vision and Mission remain at the heart of everything it does, while ensuring good practice and compliance in the areas of strategy, risk, and finance’ it’s always what sits behind the ‘…Purpose, Values, Vision and Mission…’ bit that captures my imagination. Thinking about: why does our organisation exist; who are we here for; how are we going to add value to the world in the context of whatever it is that our organisation does. Those questions – or, more specifically, the answers to those questions – are what is going to excite and inspire and mobilise us and our organisation’s supporters to drive forward and make things happen.
‘But I just want to focus on […enter your core business here…]!’
If I only had a dollar for every time I heard a statement like that. Many people who take on governing roles do so because the core business of the organisation is something close to their heart. And there’s nothing wrong with that! But we have to realise that if we don’t get the governance stuff right, the organisation won’t be delivering its core business as effectively or efficiently as it could, and the people who benefit from what we do won’t be getting the best service we could provide for them. Good governance – and compliance – need to be part of our ‘core business’ too.
If you think I can help your organisation improve its good governance, and assist you to embed compliance into your everyday practices, do get in touch with me on megan@mjbconsulting.net.au or 0421 525 048 – I’d love to help you make compliance just another part of what you do.
And if you’d like to receive my fortnightly Good Governance E-newsletter, with all its tips, information, and news of upcoming events, just let me know.
I hope to talk to you soon!
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