The Importance of Governance
                     THE 
IMPORTANCE 
OF 
GOVERNANC
E
INTRODUCTION
Governance can be defined as: “The 
system by which entities are directed 
and controlled.  It is concerned with 
structure and processes for decision 
making, accountability, control and 
behaviour at the top of an entity. 
Governance influences how an 
organization's objectives are set and 
achieved, how risk is monitored and 
addressed and how performance is 
optimized”.
Source: www.governancetoday.com
WHAT DOES 
GOVERNANCE MEAN?
Governance is a system and 
process, not a single activity and 
therefore successful implementation 
of a good governance strategy 
requires a systematic approach that 
incorporates strategic planning, risk 
management and performance 
management.  
Like culture, it is a core component 
of the unique characteristics of a 
successful organisation.
Source: www.governancetoday.com
IMPORTANCE OF 
GOVERNANCE
STRENGTHEN 
STAKEHOLDER
To preserve and strengthen stakeholder 
confidence – nothing distracts an 
organisation more than having to deal 
with a disgruntled stakeholder group 
caused by a lack of confidence in the 
governing body. 
And on the positive side, a supportive 
stakeholder base can generate benefits 
for the organisation though social and 
emotional support, intangible but very 
valuable attributes that all organisations 
should strive to achieve and sustain
Source: www.governancetoday.com
FOUNDATION FOR A 
HIGH-PERFORMING 
ORGANISATION
To provide the foundation for a high-
performing organisation – the 
achievement of goals and sustainable 
success requires input and support 
from all levels of an organisation. 
The Board, though good governance 
practices, provides the framework for 
planning, implementation and 
monitoring of performance and 
without a foundation to build high 
performance upon, the achievement 
of this goal becomes problematic. 
Source: www.governancetoday.com
ENVIRONMENT OF 
CONSTANT CHANGE
To ensure the organisation is well 
placed to respond to a changing 
external environment –business 
today operates in an environment of 
constant change.  
Source: www.governancetoday.com
IMPORTANCE OF 
TECHNOLOGY
Technology has created an 
information age that has 
transformed our world, and for 
business to both survive and remain 
profitable to enable it to fulfil its 
mission and achieve its vision, a 
system has to be in place to assist 
an organisation to identify changes 
in both the external environment 
and emerging trends.
Source: www.governancetoday.com
BENEFIT OF GOOD 
GOVERNANCE
GROW YOUR 
BUSINESS
• Create a clear vision of the future 
and aim for it
• Improve performance and get 
better financial results
• Get a competitive advantage
• Discover and act on the right new 
opportunities
• Attract investment more easily.
Source: www.business.govt.nz
STAY AHEAD OF 
RISKS
• Better understand current risks 
and get insights about possible 
future risks
• Create strategies for reducing or 
avoiding risks
• Remove opportunities for fraud, 
corruption, or mismanagement
• Learn from other people’s 
experience and mistakes
Source: www.business.govt.nz
IMPROVE 
COMPLIANCE
• Better understand your legal 
responsibilities, especially when 
they change
• Reduce time, money and effort 
on compliance
• Ensure accountability for what’s 
happening at an operational level
Source: www.business.govt.nz