governance
GUV-ur-nunss
/ˈɡʌvərnəns/
The system of rules, practices, and processes by which a company is directed and controlled.
Governance is distinct from 'management.' Management is about running the business day-to-day; governance is about the oversight provided by the board of directors.
The story behind the word. The word comes from the Greek 'kybernan', which means 'to steer a ship.' This same root gave us 'cybernetics.' It implies that the leaders of an organization are the pilots navigating through stormy seas.
Word relationships
- oversight: The action of overseeing something, often with a focus on preventing errors.
- regulation: A rule or directive made and maintained by an authority.
- anarchy: A state of disorder due to absence or non-recognition of authority.
- mismanagement: The process of managing something badly or wrongly.
Commonly confused with
- government: Government is the institution; governance is the process or system of exercising authority.
Word family
- govern (verb): To conduct the policy, actions, and affairs of an organization.
- governing (adjective): Having the authority to conduct the policy and affairs of an organization.
Collocations
- corporate governance
- governance structure
- good governance
- environmental governance
Example sentences
- "Good corporate governance is about 'intellectual honesty' and not just 'sticking to rules and regulations'." A leading expert on corporate law defines the essence of good oversight. (Mervyn King)
- "The failure of the energy giant was largely attributed to a complete breakdown in corporate governance." The shareholders voted for a change in leadership to improve the firm's oversight.
Memory hook
Think of a 'Governor' on an engine—it's the device that controls the speed and keeps things from blowing up. Steering the corporate ship.
When not to use
Don't use 'governance' when you simply mean 'the government' (the people in power).
Fun facts
- The 'G' in ESG (Environmental, Social, and Governance) investing refers specifically to how a company is policed from within.
Related words
Explore more words
govern, administrative, transparency, regulation, accountability, rule of law
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