It was only a few months ago that I proposed my definition of "good governance," and I've already changed my mind.
I know it’s only been, like, three months since episode 102 where I offered a definition of “good governance.” Well, I’m excited to say that I already think I got it wrong. I’ve had a slight, yet significant, shift in perspective thanks to reactions that I’ve received from clients, classrooms, and listeners. Let’s begin with the definition from episode 102: Good corporate governance means creating conditions that maximize the likelihood that effective decisions will get made. The most important part I got wrong was emphasizing the effectiveness of *decisions* which isn’t really what I meant to do in the first place. We all know that one of the things about decisions is that you can’t know what the result will be until you make the decision in the first place, and talking about an “effective decision” implies that the result will be good. So that needed to change. I also don’t really like the “maximizing the likelihood” part because that implies that good governance is really a game of chance. On top of that, some people have told me I should add the word “intentional” somewhere, while others prefer “active.” I think I’ll use both. Ultimately, what I really want to convey is that the heart of good governance is an interest and curiosity in the conditions for making decisions throughout an organization. So here’s where all this wordsmithing has gotten me as of November 2022: “Good corporate governance is the act of intentionally creating effective conditions for decision-making in an incorporated entity.” Let me know what you think. Clearly, I’m in a pretty impressionable place right now, so you might just change my mind.