In times of increasing bureaucratization it becomes more difficult to oversee the innumerable rules that must be followed. Since the employees act autonomously and each detail cannot be regulated from the top, they need a clear set of rules. In order to provide the best possible directions, the enterprises use for example COSO and COBIT as a guideline, i.e. standards for implementing the Governance. The trend to a constantly growing number at standards is foreseeable. Let’s remember the different standards in Project Management. Do we have to adjust ourselves to the fact that in the future rules rule rules that rule rules?
A common denominator in the rules is the fact that they follow certain rules. The following aspects define the quality of the Governance.
In this case the decisions, the decision path and the principles of leadership should be made accessible to the employees. They should always be able to understand, for what reasons the top management deploys certain rules. At the same time they should understand the point of control for their own influence.
In order to create a reasonable handling of scarce means, the procedures should be designed accordingly. These definitions prevent an uncontrolled growth of rules and procedures. Beyond that, they reduce the expenditure for the introduction of guidelines and enable over time an improved use.
The employees are motivated by personal sharing and participation in the designing of the enterprise. They receive with the regulations the right and the obligation to participate in the decision making and the implementations. For this reason clear points of control for the participation of the employees are inserted in the procedures.
Through clear assignments of authority and responsibility defined tasks prevent Muda and friction losses. All areas are considered as well as the overlap of authorities and mutual obstructions are prevented. The employees know through the transferred rights and obligations, what they have to do – and what not.
- Rule of law
Through the bindingness to the rules for all, without exception, the individual is reinforced. In order to get a functioning interaction, it must be guaranteed that that all are equally treated. For this purpose it needs in case of conflicts a clear procedure as well as an independent board of arbitration that can be called by everybody.
Through an adequate and demandable reconciliation of interests, the justice offers a general framework that goes beyond the detailed rules. The values of the enterprise need a common, fundamental understanding about what is right and what not. A respective understanding avoids a variety of detailed regulations.
In order to guarantee that the Governance is adapted to the respective conditions, a clear control model is required for the enterprises. Thus, COSO offers a framework for the financial reporting and Cobit for the IT. The Governance can be introduced correctly at the right place with these frameworks.
Bottom line: The build-up of a control system, the Governance, is an effective means, for steering enterprises or departments. Standards facilitate reliably the implementation. It is however important to resist the regulation craze. More is not necessarily better. Rules rule rules that rule the rules is the end of effective rule sets.