National Seminar on Standards for Quality

& Empowerment

Good Governance
 Organisational Governance

• Organizational
governance is the set
of processes, customs,
policies, laws and
institutions affecting
the way in which a
organization is
directed, administered
or controlled.

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 Good Governance

• It includes the relationships among the constituents and

the goals for which the organization is governed.

• It is operationalised by the persons having the authority

and responsibility for pursuing the organization’s
objectives, i.e. the purpose for which organization exists.

• It is maximizing value for all stakeholders, transparency in

functioning, and respect and mutual trust amongst all
constituents of organization and stakeholders.

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 Constituents

• Owners, members or constituents of the organization like share holder in

case of companies and members of general body in case of societies,
cooperatives etc.
• Board of directors
• Management
• Employees,
• Suppliers, contractors
• customers,
• funding agencies,
• regulators,
• the environment ,
• community
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 Principles of Good Governance

• Integrity

• Accountability

• Transparency

• Ethical conduct and values

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 Principles of Good Governance

• Integrity - Integrity comprises perceived

consistency of actions, values, methods, measures
and principles.

• Integrity is often seen as the quality of having a

sense of honesty and truthfulness with regard to
the intentions or motives for one's actions.

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 Principles of Good Governance

• Accountability – is the state

of being answerable for
decisions and activities to
the organization's governing
bodies, legal authorities and,
more broadly, its
stakeholders.
• Accountability should focus both, on compliance,
with rules and ethical principles, and on achievement
of results.
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 Principles of Good Governance

• Transparency - Transparency is a principle of

access to, or disclosure of, appropriate
information.

• It refers to the provision of making available

relevant information to the various stakeholders,
both internal and external to the organization, who
may be affected by, or have an interest in, its
decisions and actions.

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 Principles of Good Governance

Ethical conduct and values - The organization’s

stakeholders expect the organization to conduct its
activities in an ethical manner.

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 Ethical conduct and values

Ethical conduct and values -

Not only delineate the minimal standards below which a
persons actions will not be tolerated, but articulate a set
of values that a person should aspire to emulate.

What makes actions right and wrong?

Is it a Virtue or Duty or Rights?

Q: A man in a sinking boat with mother, wife and little

daughter can save only one person. Who will she be?

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 Legal Compliance

• The applicable laws, statutes, regulations

• The personnel responsible for compliance.

• Audits that compliance is evaluated and reported to top

management and the board.

• Due awareness of the legal responsibilities and liabilities to

partners/business associates, suppliers/distributors in the
supply chain, etc. where ever applicable.

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 Stakeholder Identification & Engagement

• Identification of stakeholder
(both internal and external).

• Identification of needs and

concerns of the stakeholders

• Stakeholder Engagement Process

– Setup appropriate channels/ forums/
structures for their engagement

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 Stakeholder and their concern

Stakeholder Their Concern Engagement Information

Classification Process Sharing
Customer Quality of Product and services including
issues relating to health and safety
Employee Quality of work environment and
recognition, career progression.
Investors/ Return on Investment
Shareholders/ Risk Minimization
Financers
Supply Chain Terms of doing business including financial
such as and credit limits;
suppliers and Capacity building;
distributors Fair and transparent process;

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 Stakeholder and their concern

Stakeholder Their Concern Engagement Information

Classification Process Sharing
Environment Protection and conservation in context of
organization’s activities
Government Financial accounting and compliance to
laws; national image, security
Community Sustainable development;
Protection against adverse impact;
Compliance to Social mandates
Civil Society Sustainable development; Respect towards
social, cultural, traditions and practices;
business Terms of doing business including financial
associates and credit limits;
Fair and transparent selection process;

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 Responsiveness to stakeholder

•The information given is:

–Relevant
–Complete
–Reliable
–Neutral.
–Understandable
–Accessible
–Equitable
–Timely Response

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 Policy, Planning & Strategy

• Organization to define it’s vision, mission and

value statement.

“One day Alice came to a fork in the

road and saw a Cheshire cat in a tree.
Which road do I take? she asked.
Where do you want to go? was his
response. I don't know, Alice
answered. Then, said the cat, it
doesn't matter.”

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 Governance structure

• Define its vision, mission and value statements.

• The governance structure is defined by a hierarchy

of levels which includes:
» a) Owners/Promoters
» b) Board, and
» c) Management (Strategic/Operational)

» With clarity of roles, responsibility, authority, accountability and

liability at each functional level.
» Effective flow of communication and decisions fully understood
by each functionaries

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 Documentation

• Documentation
– Vision, mission and values statement
– Code of Conduct for Board, employees, etc.
– Roles, Responsibilities, authorities, accountability and
liability of the Board members, management etc.
– Terms of reference of Board and other committees
– Specific policies (e.g. HR, gender, environment, etc)
– Grievance redressal mechanisms for all stakeholders

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 Monitoring and Review

• Monitoring and review

– Through Internal & external audits and audit committees
– Committee for reviewing the good governance practices of
the organization to review
» Policy deployment
» Feedback system
– System of identification and reporting of all breaches
– System of checking legal and financial compliances.
– System of checking non-compliance in ethical conduct, etc.

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 Reporting & Communication

Reporting
– Establishment of proper
reporting mechanisms.
– System for timely statutory
and regulatory reporting.

Communication
– Channels of communication
with the respective
functionaries for
communicating with the
respective stakeholders.

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 Maturity model

• The issue of governance is progressive and evolving.

• It is a journey towards making right decisions considering
the interest of all stakeholders.
• It goes much beyond legal compliance.
• It even goes ahead of expectations of stakeholders.

Road map based on the concept of capability maturity

model considering 5 levels of maturity guides the journey to
good governance.

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 Maturity model

• Initial Level:
– To some how comply to bare minimum legal requirements. Adhoc
approach with focus on managing the crises.

• Basic Level
– Some structure with management controls including planning,
monitoring and control system for ensuring compliance to all legal
requirements.

• Defined Level
– Well defined and written roles and responsibilities for all decision
makers.

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 Maturity model

• Managed Level
– defined vision, mission and goals and have policies for
each stakeholder

• Optimized level
– Strive to take care of interest of all stakeholder way
beyond the statutory or legal requirement.
– Look towards its long term sustainability.

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 Good Governance – Risk Mgmt

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 Good Governance – Achieving Goals

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 Our Role

• With great power comes

great responsibility

• Not everyone is meant to

make a difference. But for
me, the choice to lead an
ordinary life is no longer an
option.

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 Our Role

• I'm trying to free

your mind, Neo.
But I can only
show you the door.
You're the one that
has to walk through
it.

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Thank You