Governance is the key function of societal stability and economic progress, since time immemorial. The world is no longer simple and static, but rapid and complex. This requires new approaches to leadership : organisation and processes of democratic governance, or the role of directors and top management in corporations, require re-design to maintain delivery of individual and common goods and to cope with current interdependent challenges.
The concept ‘governance’ can be broadly defined as a system of elected, appointed or co-opted actors awarded the power and responsibility for designing public policy, corporate or organisational strategy (mentoring) and for rule making (monitoring), applicable to the society at large or to the corporation or organisation. The purpose is that of ensuring society’s Common Good or the realisation of corporate or organisational objectives.
The key objective of governance today should be to embed the opportunities brought by research and technology into a flexible, dynamic, stimulating and enabling environment, by creating and promoting ecosystems of innovation. This is meant to create added value for society by enhancing the quality of life of its citizens and the competitiveness of its enterprises, through intelligent interaction between a broad variety of stakeholders and the use of multiple instruments from the toolbox (High Level Group on Innovation Policy Management, 2014). This requires deep re-thinking of governance as inherited from a previous industrial age.
In business, the emergence of new systems of manufacturing and services and their accompanying social innovations demand a fundamental rethinking of corporate strategy. More than ever corporations need to engage all intangibles which co-determine company success and align them more effectively with the company’s key commercial objectives.
Corporate Boards as the guardians of the enterprise through the exercise of corporate governance have to pay far greater attention to the mentoring and influencing of the broader context in which the enterprise is situated in order to realise competitive advantage and sustainability. In this sense, the board’s skills and insights into policy formation and rule impact and in forging deeper partnership with government and other stakeholders is a costly inefficacy at a time of deep shifts.
Modern public governance has traditionally been focused on capital allocation, market regulation and social protection. The ways in which these have been practiced since the economic principles of the so-called Washington Consensus came to dominate governance thinking have caused much collateral damage. How can it be remedied in order to bring back more sustainable growth and reducing inequality, which has itself negative economic impacts (IMF Study 2014) ? How will these functions be exercised in a digitalized, global economy driven by inter-acting scientific and technological developments and their opportunities and risks in the more slowly evolving, culturally different and internally fragmented societies of Europe ?
Moreover, multi-layered governance in Europe need to “re-fitted for purpose”. At the moment, EU governance is excessively focussed on centralisation and regulation and not enough on mentoring, collaboration, stewardship and peer review. Alternative methods of integration and collaboration are ignored and under-developed. The legalistic driven integration needs to be complemented with more flexible and holistic methods, facilitating interlinkages in rapidly changing and complex contexts, and balancing better economic and social dimensions.
Governance organization and methods, dating basically back to the 2nd industrial revolution, need to be re-designed to deal effectively with the current 4th revolution and its simultaneous demands for competitiveness and sustainability and social equality. Without innovation and experimenting, European and national governance systems are heading for even deeper trouble, with serious fall-out for people and business.
Governance needs to primarily focus on delivering public value and on providing novel frameworks for societies to adapt and for economies to function in the general interest. New collaborative governance methods are needed, with leadership focused on shared core values as a basis for pursuing alignment processes, which in turn can lead to more coherent business strategies and public policies.