One point catches my attention in the governance of organizations and has to do with common behavior in family businesses. It is the frequent difficulty in recognizing the existence of governance and management agents. Yes, many times these functions are performed by different members of the family or they can be merged in the same person. It is the old story of different hats in the same human being.

 

As a founder, shareholder or board member, the family member is a governance agent. In general, the main function of this agent is to direct the company and the macro strategy, explain and practice the values ​​and check the fulfillment of these drivers and the results. As an executive officer (CEO, C-level, managers and other managers), the role is clearly to plan the execution of the strategy, execute it to meet goals and report to the governance agents.

 

And when do any of these agents fail to perform their role? How is it? Let's see when a governance agent (shareholder, or board member on his behalf) leaves a gap. In this case, it is quite possible that the owner's vision will no longer be made explicit from the “source”. This “vision” has to do with the reason for the organization, the purpose, the strategic line of action, values, which emanate from whoever constituted it.

In this scenario, two things can happen. The first is that nothing happens and is “for that very reason”. The second is someone taking on that role. In the first situation, among the employees, there can be a lack of direction and generate the feeling of “what am I really here for, in addition to receiving my salary?”, Which is quite inappropriate for an agile and trust-based management.

 

In the second situation, whoever takes on the role is usually someone from management, such as the president, executive director or equivalent position. But this agent will have to fill a gap that is not his and is at risk of taking an unwanted direction by the owner, assuming more than he should or assuming less than he should, for example.
None of these situations are interesting.

 

And in the case of overlapping functions of the governance and management agents? A sign of lack of clarity in roles and responsibilities. In this situation, the idea of ​​conflicting direction or actions emanating "from above", however, disjointed, if not contradictory, may pass. Thus, productivity is impaired, and the internal climate and belief in the organization are negatively affected.

 

Who loses with these situations: everyone, from the customer to the shareholder, from the employee to the supplier.

 

Organizing governance as a concept, with roles, practices and structures separate from management, is not complicated. Like everything, it starts slowly and moves forward methodically and evolutionarily.

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Let's get back to the topic!

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MARCO ANTONIO F. VILLAS-BOAS

 

DMS partner, master in administration, engineer, mentor, consultant and professor.