by Cenen herrera
Writing from Martinez, San Francisco Bay Area, CA
Writing from Martinez, San Francisco Bay Area, CA
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Let me borrow the definition of the Institute of Internal Auditors in defining organizational governance (commonly known as corporate governance) as the policies, processes and structures used by organizations to control and monitor its activities, achieve its objectives, and protect the interest of its stakeholders in a manner consistent with appropriate ethical standards. Indeed, organizational governance has gone a long way since it was formally recognized as an important component of scientific management.
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In our doctoral class at De La Salle University, we debated much on how a third world country such as the Philippines could effectively adopt an organizational governance structure that could satisfy the needs of all stakeholders of a company given that family based organizations dominate the great majority of Philippine companies. There are two good reasons why organizational governance is difficult to apply in the Philippines. First, like other corporate rules of business, regulatory guidance on Philippine governance is a codified version of the US governance code, which has been developed to cater mostly on the needs of a country which has a different level of business maturity and exposure. Second, while the Philippine governance code is aligned with internationally accepted good governance principles, e.g. the Cadbury Report and Sarbanes Oxley Act, experience on good governance among business players in the international field is substantially varied. This means that institutional differences could arise merely as a result of cross-cultural upbringing.
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The question that arises at this point is whether organizational governance could be viewed as a principal - agent relationship that traditionally characterized the Anglo-American model or the Franco-German model of organizational governance, which focuses on the stakeholder approach. Existing literature cites these concepts as the Agency Theory, i.e., principal-agent relationship, or the Stewardship Theory, i.e., the stakeholder approach.
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We have learned from our management doctoral class under Dr. Benito Teehankee (DBA Director of De La Salle University) that agency theory is the Governance Champion's choice of organizational relationship in Corporate Philippines. We also learned from Dr. Ben's class about the intricacies that evolve over time when organizations embrace the principles of stakeholder theory, i.e., where each stakeholder plays a pivotal role in influencing the organizational structure of the entity.
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Chris Argyris once said that integrative thinking means that your theory in use, i.e., actual performance, should be aligned with your espoused values. Experience generated from actual performance should serve as the foundation for crafting policy directions that could help achieve one's vision in life. Against this backdrop, during our class with Bro. Rafe Donato, FSC at De La Salle, I came to know the true meaning of integrity, and that is "doing what is right." Integrity is an important component of Good Governance. The other three equally important components are possessing an independent mind, transparency and accountability. These governance attributes form the foundation of Good Moral Character, which is the only critical requirement for winning the championship anchor that most people call Luck.
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I was extremely privileged to be given a rare opportunity to renew my professional career in what Vincent Paele considers as the greatest country where one could live today, i.e., the United States of America. It is only now that I have come to realize the value of the third discipline, i.e., 1.) possessing an intense professional will; 2.) embracing extreme humility; and 3.) learning to balance the paradoxes of developmental living. Indeed, in Corporate America each staff is called upon to act as a true catalyst of change, i.e., one who appreciates diversity, one who provides equal service opportunity, and one who embraces the life-time learning mode.
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The Governance Champion in Corporate America is an assurance provider. An assurance provider creates strategic service opportunities that leads to transformational change, i.e., enhancements in the efficiency, effectiveness and economy of an organization's operations. The resulting paradigm is full compliance and continuous improvement.
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The greatest challenge to organizational governance is how to create synergy across physical boundaries. The resounding response from the Governance Champion is to create an inter-generational and inter-class society grounded not on the traditional income engine that characterizes the corporate world, but in producing comprehensive benefits that collective human efforts can deliver, i.e., benefit engine.
