Five Elements of Corporate Governance

by guest on August 25, 2009

rk-iconsGovernance is everywhere.

As we all know, our universe is governed by 5 elements of nature:

1. Land
2. Water
3. Air
4. Fire and
5. Sky

Without these elements, really, there is no life.

The elements of nature bring in different assets to our existence. Our ancestors have acknowledged these and we all know their importance.

Now, what has this got to do with Governance?

[ Note: Governance is the set of policies, roles, responsibilities, and processes that you establish in an enterprise to guide, direct, and control how the organization uses technologies to accomplish business goals.]

Before we answer that question let us see what is one of the major driving forces of this world:

It’s the economy.

Opening up of economy ensures that a countries limitations are overcome through partnership and collaboration. This comes with not only an increase in opportunities and challenges but also an increase in the dependencies on each other. These collaborations, partnerships and the numerous opportunities are tempting desires in a philosophical sense and human minds go to great extent to reap those in all possible ways and means. Any disturbance in these balances stand to impact the lives of thousands of people.

One thing that can guide us from all these imbalances is Governance. Governance could be lethal or soothing based on how it is used leading to the thought that “Governance itself needs to be governed!” One way to think about this is using the “elements of nature” framework outlined above.

Let us look at each of the elements of nature in the context of Governance:

1. Land: Being Grounded.

The mass of the universe is land, which we call Mother Earth that holds all living beings. Without land, there is nowhere for us to live.

Organizations can very much manifest the quality of the land in the following ways:

  • Corporates need to be grounded and look at things as others see them.
  • Only when Corporates are grounded, they fuel other elements of corporate governance
  • Fundamentals of Corporate Governance is about dealing with the ground realities from all the stakeholders perspectives including the employees

2. Water: Being Flexible

We can tell from the past human missions that all manned and unmanned missions to other planets are in search of the most precious resource – Water. Water is essential for us to survive. The attributes of water is such that it takes the shape where it’s contained – a lesson in flexibility! Once it occupies the space, one needs to dive-in to understand what is inside. This is the element which brings in the sense of taste.

Corporate governance should take these basic attributes of water and inculcate these in their organizations thus:

  • Being Adaptive and Flexible
  • Understanding matters deeply than looking at its surface
  • Getting the taste of what is being guided and governed

3. Air: Invisible Presence

Governance is all about not knowing that you are being governed. To me, that’s the highest level of governance; it should be as simple as electricity flowing from the switch, water flowing from the taps. No drama! Just silently going through the motions of doing what it does. Governance needs to be invisible yet exist everywhere like air. It should transmit the sounds of governance to the right levels as to the true attribute of air which transmits sound and it will show its color if something is mixed up.

4. Fire : Destroying Evil

This is the ultimate weapon. Fire absorbs the good and destroys the evil. The only attribute of this element is that, it can be seen, Evil forces that act will always see the fire behind them waiting to destroy them. Another quality of fire is it leaves no trace of what it destroys.

Corporations should have the fire to clear the evil forces that hinders the growth of the Organization. The governance should be structured in a way that it is clearly seen as a lethal weapon to all the destructive forces.

5. Sky – Endless possibilities

Even in utmost turmoil, one thing that holds us together is Hope and the endless possibilities. History shows many instances of this quality. If we observe closely, when you try to reach the sky, it expands itself infinitely. Men have traveled farther to moon only to understand the limitless possibilities that sky brings in. We know we cannot capture it we can only appreciate and acknowledge it.

The rule is very simple – The possibilities are endless. Sky is the limit.

photo_rk_small

Rajesh Kannan leads the develpment of Odondo. Odondo, an offering from Compassites is a service that helps the Directors and management to listen to real people and feel the pulse of their organization. Odondo’s goal is simple; to facilitate robust communication that feeds into a 360° IT enabled solution. You can follow him on Twitter at @Odondo

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  • Rajinder Arora

    Amazingly written.

  • Rajinder Arora

    Amazingly written.

  • Rajinder Arora

    Amazingly written.

  • Pingback: Five Elements of Corporate Governance « Corporate Governance Leaders

  • Veronique

    What a cool article, thank you.

  • Andy Dale

    I like it

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  • Tamanna soni

    Actually i m a teacher so i have to make a board on the topic 5 elements. so after watching it on net i feel gud and especially the explation part i like very much.

  • Wenpross

    The 5 elements as the Chinese describe them are Water, Wood, Fire, Earth and Metal in that order. Water feeds Wood (makes trees grow) , wood feeds fire (to burn it) , fire feeds earth (by releasing minerals through creating ash after burning wood) and earth feeds metal (to create minerals. Therefore,  your arrows are going in the wrong direction and your energy is flowing backwards!

  • Fwoulin

    thank’s to you such an enlighted emphasizing it we’ll I believe these fvie elements completed The Planet Earth of Living….. Godspeed,,,,,,,,

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