16. Corporate Governance (definition...finally)

NOTE: if you’re new to Ground-Up Governance, or are finding anything a bit strange or confusing, you might want to START HERE.

There is no perfect time in our journey to define “corporate governance.”  Too early and we wouldn’t have enough words to use, making it too hard to really understand what corporate governance is.  Too late and we’d miss a lot of opportunities to talk about it and build on it.  The solution was to make an arbitrary decision, which, as you’ll learn in a few seconds, is kinda apt.

Anyway, the term “corporate governance” is basically what this Ground-Up Governance thing is about.  A *LOT* of people who talk about corporate governance tend to think of it as something that you can’t describe without WAAAAY more words than we have so far.  Ground-Up Governance disagrees. It’s not that those people are wrong. In some ways corporate governance is a term that’s open to interpretation and has lots of ‘correct’ definitions. But, for the purposes of this newsletter, corporate governance means something really simple: it’s the way that decisions get made in a corporation. 

That’s it. 

Say it out loud: “Corporate governance is the way that decisions get made in a corporation.” If it doesn’t feel right or comfortable yet, try it again when you get out of bed tomorrow morning and see if it fits a bit better. If not, that’s OK. Feel free to write Ground-Up Governance a strongly-worded letter.

A lot of corporations only have one person involved: one shareholder, one employee, one manager – all the same person. Usually, for that type of corporation, corporate governance looks like that person sitting down for lunch and just doing stuff that they think will make their corporation as good as possible. Kind of like that time you had a weird yet vivid dream:

The sky is orange. The lasagne you just made smells amazing. Billie Eilish is there. You tell her you have an 11th toe. The toe is magical. She sings you a song about using your toe’s magic to sell more Reallie Steilish fanny packs.

Inspired, the next day you start a campaign to find all the fanny-pack-toting-extra-toed Eyelashes in the world (there must be dozens!), offer them BOGO discounts, and make lots of money. You came up with the idea on your own and didn’t need to ask anyone’s permission – it just got done! That’s corporate governance.

The more complex your stakeholders get – more shareholders, more customers, more employees, bigger community – the more complicated corporate governance can get. Why? The more people your corporation affects, the more likely it is that you can’t make everyone happy. So, do you try to make everyone a little happy? Do you make one person or group REALLY happy, and everyone else really unhappy? There are TONNES of factors that you need to take into consideration when you’re making decisions. 

Anyway now you know what corporate governance is, and that’s basically what Ground-Up Governance is about, so if you’re already a subscriber and it sounds boring you should probably get a refund. If you’re excited and you’re *not* a subscriber, then you better sign up now for the wildest corporate governance experience of your life!