Principles of Organizational Governance - an Overview
At the heart of all organizations is purpose, i.e. a meaningful reason to exist. Values inform both the purpose and the way the purpose is achieved. ISO 37000 sets out guidance to help governing bodies clarify the purpose and values, ensure that strategy is aligned with this intent and ensure value is generated for all relevant stakeholders to strategically achieve purpose in line with the values. The standard outlines how this requires a carefully considered approach to stakeholder engagement, and a systemic, long-term and proactive view of appropriate risk so that the organization remains viable over time.
ISO 37000 also reinforces the critical need for effective oversight, in particular through a clear-cut internal control system and reliable assurance processes.
Accountability at all levels is another principle at the heart of good governance: neither the members of the governing body nor those to whom power has been delegated stand above the law. The governing body is ultimately accountable for the actions and omissions of the organization, hence governing bodies need to ensure they define roles and responsibilities and have a well-functioning reporting and accountability system in place. It places the Governing Body (board of directors etc.), at the cornerstone of good governance. It is not prescriptive, but guidance based, and the strength of the Standard is in the way it is interpreted by organizations to suit their unique purpose and strategy.
ISO 37000 further stresses that leaders set the tone for an ethical organizational culture, need to ensure the strategic and responsible use of data and to ensure that decisions are transparent and aligned with broader societal expectations.
It will help the leadership develop a highly focused mindset when developing and implementing the strategic plan. It therefore has application for all board directors and C-suite executives.
The Standard itself consists of 11 principles of good governance, of which purpose is the primary governance principle. The principles also cover areas such as strategy, oversight, accountability, stakeholder engagement, risk governance, and sustainability amongst others.
LINKS
A link to the ISO Standard which explains it in more detail can be found here: ISO 37000 Governance of organizations - Guidance. For many ISO standards, it is the organization that is certified. For ISO37000 it is the individual.
Click here ISO 37000 - reaching consensus for more information regarding the ISO Technical Committee and Working Group which led the development of the standard itself: