Corporate Governance: From Regulatory Compliance to Actual Practice
Many organisations adopt a governance manual and stop there. The gap between the text and the practice is what matters.
Adopting a governance manual is a first step, not a last one. Many organisations start with a well-drafted document, then discover a year later that it has changed nothing about how decisions are actually made, because nobody connected it to day-to-day procedure.
Where the gap usually shows
The gap is rarely in the text. It is in the distance between the text and what actually happens in the room. The recurring places it appears:
- Authority between the board and executive management is not precisely delimited, so matters get settled by custom rather than by the document.
- Committees exist in the manual but do not meet, or meet without minutes recording their decisions.
- A conflict-of-interest policy exists, but no periodic disclosure mechanism activates it.
- The manual is not tied to a clear delegation-of-authority matrix that can be consulted when there is disagreement.
What makes governance workable
Workable governance leaves a documented trail. Every material decision should have a basis in a document, minutes showing how it was reached, and a clear path to whoever holds the authority to approve it. That is the difference between an organisation that has governance and one that has a governance file.
The first practical step is usually not drafting a new manual, but reviewing the existing one against what actually happens, then closing the gaps one at a time.