Governance is a term for activities that are used to transmit the will of owners or other interest groups (stakeholders). It forms a layer between the owners and organizational management and ensures the protection of the interests of owners. It applies primarily to large organizations with a complex ownership structure. Good governance increases the level of investment protection of owners, fulfillment of legal obligations, reduces a number of risks towards the owners.
Governance in practice: Corporate Governance takes place in practice through a set of rules (policies), strategic objectives of the organization, setting management responsibilities and processes of the organization. It is exercised directly by the owners or their representatives (governing body) who lead and influence performance managers. In practice, there are several types of governance:
- Corporate Governance - an umbrella term for governance in companies. It is exercised by owners or their representatives (according to the type of the company, they are statutory bodies, board of directors, etc.)
- Project Governance - is a governance within project management. It ensures the fulfillment of objectives of project owners
- IT Governance - is a governance in the field of informatics and use of information technologies
- Public Governance - is a governance of political representation of states and countries