Governance and Good Governance

The terms “governance” and “good governance” have been bandied about a lot recently however it is difficult to define what governance means. UNESCAP (2009) describes governance as “the process of decision-making and the process by which decisions are implemented (or not implemented)”. According to Kofi Annan (1998), Former United Nations Secretary-General, ‘Good governance is ensuring respect for human rights and the rule of law; strengthening democracy; promoting transparency and capacity in public administration’.

All organisations, whether public or private, should be concerned about good governance.

Corporate governance differs from public governance: private companies are profit-oriented and expected to provide corporate social responsibility to address the operations’ social, economic and environmental impact. However, in public-purpose organisations, the definition of good governance is often more complex. A lot of effort has been made to establish a list of principles of good governance. The United Nations Development Program promotes eight principles of good governance, which are summarised below:

  1. Participation: Everyone should have the right to decision-making, either directly or through legitimate institutions or representatives.

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    Participation must be informed and organised. This builds on freedom of association and expression and requires an organized civil society.

  2. Consensus Orientation: Different needs must be analysed to reach a compromise on what is the best interest of the community, and how it can be achieved.
  3. Direction: Leaders need to have strategic vision and a sense of what is needed for human development.
  4. Effectiveness and Efficiency: Institutions and processes must serve stakeholders in a timely manner. They must produce effective results while making efficient use of resources.

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  5. Accountability: Government institutions, private sectors and civil society organisations must be held accountable for their decisions.
  6. Transparency: Decisions must be taken according to rules and regulations. Information must be freely accessible to the public and available in an understandable form.
  7. Equity and inclusiveness: Everyone is to be given the same opportunities and should be made to feel included.
  8. Rule of law: Legal frameworks should be fair and enforced impartially. This requires an independent and impartial judiciary and police force (UNESCAP, 2009)

These principles are interrelated and mutually reinforcing. Good governance assures that corruption is minimised, that it responds to society’s present and future needs and that the views and voices of the minorities and the most vulnerable are heard in decision-making (Office of the Ombudsman, 2013). International organisations such as COE, World Bank, ESCAP, OECD, IMF and WTO also recommend similar principles as the central aspect of good governance (Prabakaran, 2011). Since institutions’ ethos varies, the perception of good governance must be tailored to suit the different needs of organisations’ cultural norms and values while finding the right way to achieve desired results (Office of the Ombudsman, 2013).

Good governance also requires good management practices (Van Vliet, 2009). Fayol (1930) synthesized fourteen principles of management, which he believed achieve performance with excellence, most of which remain valid today. These principles cannot be practiced in isolation but have to be effected with other human resource management practices to achieve good governance (Adam & Suleiman, 2018). Without effective leadership and good governance at all levels it is impossible to achieve and to sustain effective administration, achieve goals, sustain quality and deliver first-rate services (Legas, 2019). Good governance and effective-ethical leadership are essential for an organization to be considered successful by its stakeholders.

Effective leaders are necessary to ensure that employees are engaged in their work and that they take their responsibilities seriously. Employees must be willing to accept responsibility and to work in a team complementing each other’s strengths and weaknesses (Council of Europe, 2015). Effort should be made to reduce staff turnover by providing fair and equal opportunities to all employees. Managers must have professional and leadership competencies and must ensure the upkeep of workplace morale and employee motivation. Employees must be seen as assets to the organisation and effort must be made in order to improve their engagement. The Hawthorne Studies confirmed that employees performed better when management involved them and treated them positively (Mayo, 1949). Staff must be given the necessary authority and responsibility in order to give their best. Good management also requires that risks and performance are managed through robust internal control and that tasks and processes are evaluated to ensure that objectives are achieved as planned, while ensuring best practice.

Managers need also ensure that the organisation is compliant to regulatory and legal obligations. They are responsible for implementing strategy through the efficient and effective use of the organisation’s resources by planning, organising, leading and controlling (Daft, 2010). Employees at all levels must have good knowledge of rules and ethical standards in order to ensure good governance. Management is accountable for the ethical and cultural environment of the organisation and must promote a culture of improvement by encouraging learning (Council of Europe, 2015). Management is also responsible for the accomplishment and adherence to the strategic plan and organisation’s mission and values.

Good administrative practices are essential for the successful running of any organisation. However, organisations must also follow ethical principles in order to ensure good governance. Ethics is defined by Merriam-Webster as “the discipline dealing with what is good and bad and with moral duty and obligation”. Hamlin et al (2001) states that “ethics is concerned with rules or principles that help us to distinguish right and wrong” (Armstrong & Taylor, 2014). Legge (1998)’s stakeholder theory notes that management must act in the interests of the stakeholders as their agent, and act in the interests of the organization to ensure the survival of the firm, safeguarding the long-term stakes of each group.

The Equity Theory stresses the importance of treating people fairly (Adams, 1965). Rawls (1973) proposes that everyone is to have the same equal rights as others and that there should be no social and economic inequalities between people. This enforces the idea of “justice as fairness”. An organisation’s ethical standards are established through the behaviours and attitude of the people at the top, which cascade down to lower-level employees. Organisations must establish a framework for appropriate conduct. These written rules and values are essential to enforce adherence to moral values and commitment to good governance, while curbing wrongdoings. The Code of Ethics for Employees in the Public Sector (Office of the Prime Minister, 1994), the Public Service Management Code (Office of the Prime Minister, 2019) and the Public Administration Act (Laws of Malta, 2019) all provide a set of standards that need to be upheld by government officials in the course of their duties. Ethical frameworks must be revised and updated on a regular basis (Ray, 2019). New rules should be introduced according to need and not when scandals or crises occur (Christoph & Moilanen, 2011). Core ethical values reinforcing the organisation’s ethics may include:

  • Integrity: Officials must act with honesty, fairness and impartiality while performing their duties. Public funds and resources must be managed competently and effectively, solely with the public interest in mind. Conflicts of interest must be declared and disclosed to superiors.
  • Respect & Non-discrimination: Fairness is essential and everyone must be treated equally and respectfully irrespective of gender. Good governance requires that no one is discriminated or harassed at any time and on any grounds.
  • Loyalty: Public sector employees must be loyal to the Constitution, abide by the law and be objective in the implementation of all government policies irrespective of the political party in government.
  • Trust: All information must be safeguarded and treated confidentially. Good behaviour must be exercised at all times in order to safeguard the organisation’s and the public’s trust.
  • Quality: Officials should make an effort to continue to improve their knowledge in order to enhance their service. They must also strive to get the best value for public money spent and must address any misconduct or misuse of resources once identified.
  • Accountability: Good governance demands that organisations operate in an accountable and transparent manner while being compliant with all laws and regulations. Government officials must take responsibility for any shortcomings and must be able to explain any action taken by themselves in the course of their duty. Employees in supervisory roles must also monitor their subordinates and report any misconducts immediately.
  • Impartiality: Decisions taken must be unbiased, objective and fair, without giving preferential treatment to anyone. The public expects a high standard of conduct from public servants who must act in a responsible manner even when off-duty and ensure that their private endeavours do not jeopardise the public’s confidence in the competence and impartiality of the public service.

Local councils take the above-mentioned principles very seriously. Councillors must declare any conflict of interest immediately and refrain from voting on matters of personal interest. This enforces a culture of integrity and adhering to laws and regulations. Training is given to staff to ensure quality customer service that is indiscriminate and treats everyone fairly. Local council employees also benefit from qualification allowances as stipulated in the PSMC (quote) encouraging them to further their studies to ensure ameliorated service. Vacancies are filled through a predetermined process that promotes fair and equal opportunities. Employees are also encouraged to join a Union and a Collective Agreement protecting their interests covers their employment. An Executive Secretary is employed as the executive, financial and administrative head and all formal decisions must be taken in his/her presence, guaranteeing that decisions taken by democratically-elected members adhere to all laws and regulations. A Data Protection Officer oversees each council’s data protection strategy and its compliance to GDPR requirements. Public procurement regulations oblige local councils to obtain quotations before any purchase and for purchases exceeding €5000, they must issue a call for quotations/tenders via the eTendering system. This endorses the idea of obtaining the best value for public money spent and curbs any wrongdoings.

Good governance also requires that an effort be made to increase transparency and accountability by introducing measures and indicators especially in matters of public finance. Local councils upload financial information online to ensure it is easily accessible to the public. They champion the needs of their constituents by encouraging their participation in the decision-making system by welcoming them in Annual General Meetings and monthly public meetings, which are also live-streamed and available on demand. Meeting agendas and minutes are also uploaded online for transparency. The Floriana Local Council selected the best practices of information sharing by also taking into consideration its aging population. By recognising that transparency requires that information is not only available but also accessible in an understandable form, it chooses to use a broad range of media such as door-to-door information leaflets, website, Facebook and Instagram pages, newspaper and radio adverts in order to reach a broader audience with different needs. By offering different alternatives, it ensures that important information is successfully disseminated while encouraging open communication.

According to CIPFA and IFAC (2014), “effective governance is characterized by robust scrutiny, which provides important pressures for improving public sector performance and tackling corruption”. Since local councils operate on public funds, independent auditors audit their finances and report their findings via a Management Letter, which is also made public. The Council is required to submit a reply and explain its shortcomings. This reply must be approved during a Council Meeting and publicised. Sharing such information enforces transparency, impartiality and increases the public’s trust in the organisation.

Good governance also requires that organisations continuously strive to improve their services by improving the access and quality of services offered. In order to become more effective, organisations must use indicators to determine whether the people using the service are satisfied with its quality. Investment in innovation and in research and development is also crucial. Decision-makers must strive for improvement by continuously reviewing and changing procedures, mechanisms and methodology. Regular monitoring and evaluation plans are necessary to ensure continuous improvement (United Nations Development Programme, 2011). Organisations need also be efficient by providing services in a timely manner and improving the cost-benefit ratio of services. Local councils now use an online electronic tendering system, which facilitates the tendering process and supports “the effort for achieving efficiency gains, while promoting core principles of the laws and regulations on public procurement such as transparency, security, availability, non-discrimination and equality of treatment” (Etenders.gov.mt, 2020).

Ethics Committees are important to ensure compliance to ethical standards. Such committees carry out reviews and monitor or recommend any disciplinary actions that need to be taken regarding any misconducts (Christoph & Moilanen, 2011). It is also important to implement regulatory activities and accountability mechanisms in order to detect and nip bad behaviour in the bud. The Public Service Commission is responsible for staffing and discipline in the public service. When a breach of ethical standards is confirmed, appropriate disciplinary action should be taken (and seen to be taken) immediately. Employees must be provided with a safe environment where they can reporting any misconducts or violations. Measures such as the implementation of the Protection of the Whistleblower Act (2013) encourage people to report unethical actions or malpractice while ensuring their protection.

Independent government bodies must also be established to evaluate performance. Board members should be knowledgeable, competent and engaged enough to ask questions forthrightly and without hesitation. Committees must also be assessable and able to measure their performance in order to ensure they are meeting their roles and responsibilities in the best way. Most importantly, members must be independent and must declare any conflicts of interest.

Abiding by governance principles is crucial since there is an interrelationship between governance principles and institutional qualities. When government principles are followed, institutions remain stable and increase their performance and adaptability. However, when the institutions responsible of upholding government principles (Parliament, judicial bodies, etc.) fail to perform, adapt and be stable, then these cannot fulfil their mandates and cannot gain legitimacy (United Nations Development Programme, 2011).

Numerous efforts have been made to develop indicators for good governance with most focusing on “measuring political freedoms and the rule of law” (United Nations Development Programme, 2011). A study carried out by World Bank (2010) suggests these indicators for the following principles:

Equality and Non-discrimination: The paper suggests disaggregation of data. Indicators should target exclusion and discrimination in general and should focus on minorities and vulnerable groups.

Accountability: The paper proposes monitoring and independent mechanisms to ensure accountability such as Ombudsmen’s Offices. It also suggests access to justice as well as the establishment of complaint facilities.

Participation: The study suggests indicators that “can capture civil society involvement in policy processes such as the poverty reduction strategies, processes of advocacy and empowerment […] and legal outcomes.” (United Nations Development Programme, 2011)

In order to promote good governance, the European Label of Governance Excellence was created to award local authorities having achieved a high overall level of good governance across the Council of Europe’s 12 Principles of Good Governance. It allows authorities to understand their strengths and weaknesses when providing public services to the local community and exercising public authority (Council of Europe, n.d.)

However, good governance is complex and difficult to achieve with very few countries and societies having come close to achieving good governance in its totality. Nonetheless, actions must be taken to work towards this ideal with the aim of making it a reality in order to ensure sustainable human development (UNESCAP, 2009).

Good governance is founded on transparency, accountability and the rule of law. Transparency is indispensable and inevitable to avoid unethical behaviour and corruption. Decisions must be taken ethically, responsibly and according to good governance principles (Getsmarter, 2017). Good governance principles encourage decision-makers to go beyond the limitations of thinking only in legal terms but to also consider an action in relation to ethical values and aspects. The role of the government and its entities is essential in maintaining order and righteousness in society. Effective governance can improve management, leading to more effective implementation of the chosen interventions, better service delivery and better outcomes.

Integrity is essential in the public administration (OECD & SIGMA, 2013) which is why ethical standards must be implemented, updated and emphasised in order for good governance to be ensured. Measures must be taken continuously to enforce adherence by officials representing the government (UKEssays, 2017), in order to help them make ethical decisions and to ensure good conduct and good practice. Public officers must be seen by the public as being virtuous, and seen to be doing “right” by practicing fairness, equality and transparency at all times. It is only by proving that good governance principles are being followed that the public confidence in the administration is maintained and improved.

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Governance and Good Governance. (2021, Mar 05). Retrieved from https://studymoose.com/governance-and-good-governance-essay

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