What is the main purpose of governance in an organization?

The main purpose of governance in an organization is to provide a framework for decision-making and accountability, ensuring that the organization operates effectively and ethically toward achieving its goals. Governance establishes the structure through which the organization is directed and controlled, facilitating oversight that aligns with its mission and values. It plays a critical role in safeguarding the interests of stakeholders and maintaining the integrity of the organization by preventing unacceptable situations, such as risks, conflicts of interest, or mismanagement.

This role goes beyond just ensuring profitability, which is more of an operational outcome rather than the central focus of governance itself. While financial health is important, governance encompasses broader responsibilities, including compliance with laws and regulations, ethical conduct, and stakeholder engagement.

Additionally, while member recruitment is vital for certain organizations, it is not the sole focus of governance. Governance is concerned with the overall strategic direction and well-being of the organization rather than just recruiting members. Similarly, managing day-to-day operations is typically the responsibility of management and staff, rather than governance, which is focused on oversight and strategic leadership.