Good governance is far more than policy documents and compliance checkboxes. In their latest Compliance Conversations column, Anna Romberg and Julia Haglind reveal how thoughtfully designed governance frameworks serve as an organization’s hidden engine — connecting strategy with operations, clarifying decision rights and building organizational resilience.
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While corporate governance is perceived as a given for running an organization, it is also often mistaken for a formality to take care of before “going back to doing business.” The term may conjure images of boardroom formalities, lengthy policy documents and a complex delegation of authority matrix. Some perceive governance as an “off the shelf” product and the responsibility of the corporate lawyer (or external law firm). While this may be one approach, it underestimates the power of good governance as the hidden engine of the organization.
Those of us who have experienced governance breakdowns know that when an engine fails in a high-stake situation, the consequences can be fatal. Like a car engine, which must be designed for the purpose and overall capacity of the car, the corporate governance framework should be tailored for the purpose and capacity of the organization. Good intentions will not make up for bad design.
Below, we explore how reimagining governance as an enabler rather than an obstacle can create organizational clarity, adaptability and accountability.
Think in systems — not silos
A well-functioning governance model connects the dots across the organization. Instead of managing governance in silos — by department or legal entity — think systemically.
Good governance provides clarity on how information flows, how responsibility is distributed and how decisions are made. It’s about ensuring that the right people are informed at the right time, that there is a rhythm and clarity to how the organization operates and that leaders at all levels are empowered but also accountable.
This also means connecting governance with strategy, operations and culture. When governance lives in a vacuum, it quickly becomes obsolete or ignored. But when it’s integrated into strategic decision-making, budgeting, project planning and performance review, it becomes a force multiplier.
Practical tip: Map your key governing documents, decision rights and reporting lines across entities. Identify overlaps, gaps and inconsistencies. Introduce a central governance registry or digital platform to give visibility and traceability to your policies and ownership structures.
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Read moreDetailsDesign for realities — not regulators
One of the greatest challenges in large organizations is managing the tension between control and flexibility. The need to maintain oversight and consistency across the group often clashes with the reality on the ground, where subsidiaries, business units or portfolio companies must respond to local conditions, regulations and cultures. The challenge is to avoid over-engineering while establishing a backbone that offers structure without rigidity.
Governance designed for people also means designing for different users: from board members to first-line employees. That means simplifying language, clarifying roles and communicating the why behind rules, not just the what. The legal department might need precision and legal citations; the business unit manager needs clarity, relevance and ease of use.
In larger structures, governance is also the antidote to fragmentation. It helps align priorities, mitigate risks and enable coordination across countries, cultures or companies. When it fails, it’s often because it becomes too abstract or disconnected from daily operations.
Practical tip: Conduct workshops with different teams to pressure-test your governance. Ask: Do people know what’s expected of them and why? Do they know where to find what they need? Are they confident in navigating ambiguous decisions? If not, simplify, visualize or narrate.
Monitor behaviors — not bureaucracies
When governance fails, the consequences aren’t just internal confusion. They can include legal violations, missed risk indicators, failed integrations and loss of stakeholder trust. Look no further than the high-profile collapses of global companies over the past decade. In many cases, there were red flags, policies and reporting mechanisms. But due to poor governance, these didn’t translate into action. Either information didn’t reach decision-makers, or responsibilities weren’t clear enough to prompt action.
In large structures, the cost of poor governance grows exponentially. Every additional business unit or country introduces complexity and the margin for error shrinks. Even the most sophisticated governance system can fail if the culture undermines it. When individuals feel disconnected from corporate decisions, when speed is valued over transparency or when leaders bypass processes for convenience, governance erodes.
Culture is the ultimate context for governance. If people believe that raised concerns will be ignored, or that policies are made for compliance but not for real life, they disengage. But if they see governance as a tool that protects them, that supports clarity and fairness, they’ll adopt it.
Practical tip: Listen closely to what people say about your governance structures. Are they trusted or feared? Do they enable action or slow it down? Use pulse surveys, skip-level meetings and scenario-based training to create honest dialogue.
If we want to make governance less dry, let’s start by making it more real, not as a theoretical structure but as something that enables people to act decisively, responsibly and in alignment with the organization’s purpose. Good governance doesn’t slow you down; it speeds you up by removing ambiguity and building trust. In an increasingly complex world, it enables companies to scale with integrity, make faster decisions and face uncertainty with confidence.
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