Ecosystems

Where in governance does the story begins and where does it ends? Governance is difficult for many to interpret. While we are on the right track in governance, we are still witnessing excesses today and we need to work hard on best-practice governance cases. The corporate governance Code is a good guide and widely supported. And that is not easy if each country ultimately chooses its own path in terms of insight into the Code and in terms of the reasonableness, fairness, and fiduciary duties in complying with the Code. In the Netherlands, the Supreme Court has made a more explicit statement about the binding nature of the principle-based governance Code. To comply or explain is legally anchored in the Netherlands and as a result has direct and indirect effects. But when the Monitoring Commission added long-term value creation compliance to its Code, the challenge of aligning the Code in the hybrid governance environments in the world has been tremendously increased. Entity-centric thinking and support for material ESG targets accelerate the principle that the company is a long-term partnership of stakeholders in the public, private and social governance domains. Material ESG targets require a government to mandate to stakeholders the use of standards, to execute audits by a 3rd party and to create a fiduciary duty to society. This transition, certainly from an agency-principle to an entity-centric governance model, is a revolution in governance. Although a new generation widely supports the latter view there is a long way to go. The coronavirus pandemonium, the stalling of GVCs, and  the response on geopolitical tensions have shown our global dependencies creating a wicked problem in the public multi-purpose multi-value governance models. Aligning all those too early creates a chaotic context and uncertainty as to strategy and the role of the board. As a result, also entity-centric thinking in decision-making to balance all interest, purposes and values within the diversity and inclusion of cultures and cross-border governance, requires more hybrid governance guidance.