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Participatory Governance, a Corporate Performance Tool

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Updated on September 21, 2023

Participatory governance is an asset for companies that want to improve the quality of their decisions and engage their employees.

The shift from vertical decision-making to participatory governance, that is, from CEO to committees, is an undeniable trend. This model emphasizes autonomy and cooperative relationships. In addition to fostering employee commitment and retention, it helps to improve decision-making and the organization’s performance.

Throughout your organization’s life, several situations provide an opportunity to review your governance strategy so it is better aligned with your objectives. For example:

  • You have a development project and want to introduce an innovation culture.
  • A new business partner requires you to assess your governance.
  • You want to reinforce your team’s engagement to maximize results.

These pivotal moments are an opportunity for you to consider implementing a new model.

What are the benefits of participatory governance?

Good governance is not just a matter of assigning tasks. It’s about sharing responsibilities strategically. By taking into account each of your managers’ expertise and vision, you allow them to offer the best of themselves and you benefit from a wide range of skills. There are many advantages to this diversity:

  • Gaining broader perspectives to foster vision and innovation;
  • Obtaining new information to capitalize on business opportunities (new markets, developing the offering, digital transformation, etc.);
  • Improving the connection with the needs and goals of all stakeholders (employees, clients. business partners, investors, etc.);
  • Empowering and engaging each governance body and retaining key employees;
  • Enhancing risk management and optimizing control and compliance;
  • Ending the leader’s isolation;
  • Ensuring greater transparency and improving the preparation of successors.

A participatory governance structure makes it possible to better meet challenges, whatever your organization’s development stage. Whether you’re starting up, contemplating a strategic partnership or considering a major investment, business partners and investors will have the reassurance of seeing a leader with solid support and a robust decision-making process.

In the case of a business transfer, participatory governance is the ideal approach to integrate the buyers gradually, while providing the support of an experienced team.

How to implement a successful governance structure?

In this governance transformation, the entrepreneur becomes coach and advisor. The entrepreneur will define the vision as a team, mobilize employees and help them accomplish their responsibilities instead of carrying the burden alone. But where do you start?

Reflect on your type of governance

The transition can be gradual so everyone can adjust to the change. How much of your power do you want to share? What do you expect from this new vision of governance? Take the time to think about it and be ready to question your way of seeing things, because more people will be involved in defining the organization’s future.

Start with committees

Setting up committees is a good way to get started. Do you already have an executive committee? Add an HR or innovation committee, or a family council if it’s a family business. You can also have project teams or an advisory committee and, eventually, a board of directors. In all cases, you should have a delegation of authority policy that formalizes the authority delegated to the governance body. Clarity makes everything run more smoothly.

Select profiles according to the skills required

You can then list the profiles you are looking for and select people based on their skills, ability to challenge, expertise in the subject matter and knowledge of the business sector.

Look for diversity in the profiles: gender, age, background, culture, expertise. You can also recruit someone from outside, for example a long-standing client or business partner, someone who understands your challenges, who can bring a new perspective, in addition to a network and market knowledge.

Determine the frequency

When these steps are completed, you will need to determine the frequency and duration of meetings, and then prepare an agenda (and relevant documents to be sent in advance) to allow members to contribute fully. Consistency is important, and the frequency should ensure a good work pace without complicating or slowing down operations.

Follow up

It is important to put the decisions into action; otherwise, you will create a sense of cynicism and disengagement. You must assign responsibilities and follow up on planned actions, budgets and progress.

If roles and responsibilities are clearly defined, it is possible to have multiple committees in a governance structure. Be proud of your model and talk about it to your business partners, clients and lenders: you’ll be showing that you’re serious about your business.

Don’t hesitate to call on an external expert who will take the time to build trust and guide you through the development of your governance strategy and change management.

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