Bizcuits | Are you being served?

Leanda Lee

Governance is often not well understood by the average man on the street but what we frequently take for granted in the structure and norms of organisations are mechanisms to safeguard the interests of a number of groups of people associated with them. Annual General Meetings, the chairman, the boards of directors, the CEO’s reporting role, along with board structure and elections, financial statements and disclosure exist to facilitate the stewardship of resources. They are there to ‘stop the abuse of power’, to minimise the agency costs of having one party own and another party manage – it’s about institutionalising trust, in a way. It’s applicable to companies, NGOs and community organisations.
First of the interests that governance set-out to protect was that of the owners, or investors. Indeed philanthropy and its modern-day off-shoot, Corporate Social Responsibility and the even more recent corporate social integration, did not start to develop until the 1970s. Until then and the subsequent corporate abuses of power in the heady 1980s, the interests of the investors were seen as paramount. Any dispersal of financial assets through gifts to society or others was seen as improper use of investors’ funds, an assault upon their wealth. We now value a different paradigm, and organisations, communities and governments expect that all parties impacted by the activities of an organisation deserve a duty of care.
Where regulatory institutions are weak, problems arise when management’s arrogance of their own trustworthiness tempts an organisation to circumvent or disregard the rigors of governance. Cronyism and nepotism may take a legitimate role in selection processes as trust and a certain knowledge about a person is already built into the process. It’s also expedient. To recruit a respected associate from the same club, social group or congregation may seem a good idea but when the stakes are higher and conflicting obligations become part of the equation there is little guarantee that those other interests will be protected.
International organisations with diverse stakeholders (investors, community members, students/customers/patients, employees, regulators…) will purposefully search for and select people to upper levels of management and for nomination to boards who have a range of skills and affiliations so that the diverse interests are upheld. Not only is it important that they are diverse and represent different parties, it’s crucial that they appear to be diverse so to reassure each group of stakeholders that they have voice and that their interests will be safeguarded in inevitable times of conflict.
The new line-up of official positions at the University of Saint Joseph to be put in place after this weekend in the presence of the Vice Rector of the Catholic University of Portugal, Professor José Tolentino Calaça de Mendonça, was announced this last week. A university has a clearly diverse constituency but that diversity of interest does not appear to be represented in USJ’s new management team. Three of the four senior positions will be held by individuals of Portuguese heritage closely aligned with the church, thereby immediately undermining the diversity required of good governance for a wide range of stakeholders.
The homogeneity also undermines the international dimension of the institution (unless the word international has been construed as non-Chinese in this context). The international nature of universities is one of the criteria used to assess global university rankings. It’s also an attribute of importance to the current institutional body, according to USJ’s Rector (MDT, September 19).
There is little reason to doubt the capacity of the individuals appointed to their positions to protect the interests of all stakeholders nor to doubt the veracity of the decisions. But in the interests of the pillars of good governance – transparency, ethics and accountability – neither has the wider community, which the university serves, been given any reason to trust that good governance is being served.