Government exists to serve the needs of the public. Governance exists to ensure those needs are served efficiently, effectively and fairly. It accomplishes that goal by providing clear processes and structures for all aspects of executive management. Decision-making. Strategic alignment. Managerial control. Supervision. Accountability. Governance has been a hot topic in corporate boardrooms for nearly a decade — and it's gotten even hotter due to recent corporate scandals like Enron. Citizens and regulators are calling for higher levels of transparency and accountability in all areas of business. And they're making those same demands of government, which has always been held to high standards for governance and accountability. In a recent study, the World Bank found a strong relationship between good governance and good government performance. Other studies have revealed similar findings.
One technique many governments are adopting to improve governance and control is accrual accounting, a common practice in the private sector. By establishing a clear link between expenditures and performance, accrual accounting helps agencies focus on outcomes and results — not just budgets and spending.
- Setting direction: Government stakeholders are a diverse mix of citizens, businesses and special interest groups, often with wildly divergent values and objectives. It's up to government leaders to drive those conflicting viewpoints down to a single set of strategic objectives that best serve the public interest.
- Establishing control: Inadequate controls are the leading source of governance problems. Agencies need rigorous processes and controls to ensure their actions align with the organization's overall strategic goals.
- Managing risk: Although a certain amount of risk is unavoidable, the public expects government agencies to identify and manage that risk systematically so it doesn't get out of control.
- Maintaining integrity: Government is entrusted with public funds and resources, and must adhere to the highest ethical standards. Honesty. Integrity. Propriety. Objectivity. These goals can be achieved only through a combination of individual professionalism, personal standards and a rigorous control framework.
- Sharing information: Openness and transparency help instill public confidence and trust, and are increasingly considered basic operating requirements for any government. The Internet has fueled the public's thirst for information — and provided a means to satisfy it.
- Focusing on results: Good intentions and ethical behavior are not enough. These days, accountability is measured in terms of outcomes and constituent value — not money spent.
Strategies for success:
- Provide full transparency for critical activities and decisions, including budget preparation and execution.
- Promote impartial decision-making through strict conflict-of-interest policies.
- Measure results relative to overall strategic goals, using performance contracts to define success
- Establish a clear relationship between activities and outcomes.
- Embrace performance measurement and accrual accounting.