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How to Optimize Performance Using the Governance Maturity Model

Executive Resource
Weaver's downloadable, customizable governance maturity tool provides a path for measuring the stage of maturity for each of six specific attributes of organizational governance.
August 30, 2022

Baselining your organization’s level of maturity could unlock key tools and strategies for managing organizational performance.

Effective leadership requires decisiveness in the face of uncertainty, resourcefulness in times of duress and purpose when opportunity arises. Structured organizational governance provides the support leaders need to confidently rise to the challenge and take advantage of new opportunities.

Governance is the system of oversight and support of organizational activities — the framework for how decisions are made. Governance instills order and transparency to roles and processes, bringing clarity to decision-making and predictability to performance. Structured governance builds trust between the organization and stakeholders — including employees, customers, shareholders, vendors, partners, lenders and government agencies — by strengthening transparency, accountability and equity.

Intentional governance does not happen by chance. It is built through charters and bylaws, strategy, key performance metrics (KPI), documentation and risk management. Leaders who understand how to assess and improve their governance have the keys to manage overall organizational performance.

A Deeper Dive into Governance

Governance is the combination of processes and structures implemented by the board of directors or executive management to inform, direct, manage and monitor activities of the organization to achieve strategic goals.

Every organization has a governance structure, whether implied or explicit, based on the natural formation of the organization. The level of intentionality behind that structure — the maturity — influences how organizations deploy their people, processes, technology and capital.

Structured governance helps organizations transform instinctive management and workflows into intentional action. When a governance framework is in place, organizations are positioned to:

These factors align to improve organizational performance and mitigate against disruption. When everyone understands what is expected of them, they are better equipped to move in the same direction.

Governance is not culture. Organizational culture is a blend of undercurrent and explicit expectations. Governance is a set of intentional actions to appropriately govern your organization. Governance is what you deploy; your culture is how you deploy it.

The Six Attributes of Organizational Governance

Based on guidance from the National Association of Corporate Directors (NACD) and criteria established by the COSO 2013 Internal Control–Integrated Framework, Weaver has developed an organizational governance model covering the following six attributes:

  1. Board roles and oversight: How the board and its subcommittees provide appropriate guidance for the organization
  2. Strategies, policies and procedures: How an organization defines, executes and monitors its strategic plan, policies and procedures
  3. Structure and accountability: How an organization manages talent recruitment and development, succession planning, compensation and evaluations
  4. Communication and reporting: How an organization collects and disseminates information to stakeholders
  5. Assessment and risk management: How an organization assesses, manages and monitors performance, risk and compliance
  6. Ethical values: How an organization defines, communicates and enforces its ethics policies

Each attribute can be measured against a 1-5 scale to determine organizational maturity. The stages of maturity are defined as:

The maturity model is a stacked model based on incremental improvements. Each level builds on the one prior by defining expectations and processes at an increasingly granular level. In other words, the requirements of a level must be met before an organization can achieve the next stage. Maturity is driven by a variety of factors, including organizational structure, age, priorities, industry (organizations in heavily regulated industries will typically have more mature processes to ensure compliance), market dominance, size and stakeholder expectations.

Maturity manifests across the six attributes of organizational governance, as shown in the table below. Each attribute is described in more detail following the table.

*Click to enlarge the image below.

Governance Maturity Model


Attribute #1: Board Roles and Oversight

Are board roles explicitly defined through charters and committees? How consistently and effectively does the board provide oversight to the organization?

The board of directors is charged with setting strategic direction, overseeing execution and ensuring accountability. The structure of the board, its level of involvement in an organization, alignment with management, and effectiveness as a governing body are largely driven by the organization’s maturity level.

This attribute manifests across the maturity model in the following ways:

Attribute #2: Strategies, Policies and Procedures

Are the strategy, goals, objectives, policies and procedures for supporting the organization’s mission clearly defined? What are the key performance indicators (KPIs) to monitor achievement of the mission? Is the strategy communicated, documented and aligned?

Defined strategies, policies and procedures are key to delivering predictable and repeatable outcomes. In immature organizations, strategy may not be clearly aligned with the organization’s stated direction and policies and procedures may be undefined or loosely owned by business functions, units or even individuals. As organizations mature, they have the tools and means in place to set organizational strategy and codify, align and monitor. The board should set direction through policy making while management implements the policy through procedures to achieve outcomes.

This attribute manifests across the maturity model in the following ways:

Attribute #3: Structure and Accountability

How effective is the structure of the organization for achieving objectives and managing programs; hiring, training and developing staff; evaluating performance; and engaging in succession planning? Are board and management responsibilities clearly differentiated? Does a clear distinction between board and management responsibilities exist? Are roles and responsibilities defined with adequate staffing?

Organizational success is dependent on an engaged and empowered staff. A defined and monitored approach to talent recruitment and development, compensation and incentives, and succession planning is crucial to instilling fairness and accountability while mitigating risk.

This attribute manifests across the maturity model in the following ways:

Attribute #4: Communication and Reporting

What types of communication are used by the organization for board reporting, internal reporting, staff meetings, dashboards and public information?

Communication and reporting are essential to building trust, marshalling support for organizational direction, executing on organizational goals and satisfying regulatory requirements. This requires organizations to have policies and procedures in place for disseminating information to stakeholders as appropriate for the organization.

This attribute manifests across the maturity model in the following ways:

Attribute #5: Assessment and Risk Management

What processes are in place to monitor the organization’s progress for meeting stated objectives, performance metrics, risk management and compliance?

This attribute brings — or strengthens, depending on the maturity of your organization — discipline to monitoring and risk management functions. As organizations mature, they implement a more sophisticated process for setting and achieving goals and anticipating and mitigating risk. These processes are integrated throughout everything to develop risk-based decision making and a risk-conscious culture.

This attribute manifests across the maturity model in the following ways:

Attribute #6: Ethical Values

Is an ethics policy in place? How are ethical standards communicated throughout the organization? Are ethics requirements enforced and followed by employees? How is compliance monitored?

Ethical values set the tone for an organization’s integrity, which in turn serves as a foundation for building relationships of trust with key stakeholders. This attribute serves as a guide for building structure around integrity, fairness and corporate responsibility.

This attribute manifests across the maturity model in the following ways:

How to Assess Your Maturity

As a leader, you can use the maturity model to benchmark your organization’s governance procedures against developed and proven criteria. Benchmarking allows you to strategically determine your current level of maturity (current state), where you want to be (goal state) and what you need to do to get there. With that information in hand, you can then begin building the structure you need to mature your organization.

At a minimum, a self-assessment should:

Success is predicated on management buy-in, consensus on the goal state and priorities, transparency, communication and follow through. A fair and honest assessment may prompt difficult questions and tough conversations. Do not shy away from them. Instead, use that input as an opportunity to engage stakeholders in the effort by explaining how a more mature organization will benefit them.

We have provided a downloadable Governance Maturity Model Self-Assessment Tool that lists common attributes associated with each level of maturity for the six governance elements named above. Your organization can use this to help you understand where you are now and begin planning improvements.

Striking the Right Balance

There is no right or wrong level of maturity, provided your organization satisfies the regulatory standards for your industry. You do not need to achieve a “managed” or “optimizing” level of maturity across every attribute. Recognize that your attributes may manifest at different levels of maturity, which is both acceptable and to be expected.

Let’s compare an established, global, publicly traded manufacturer of medical devices to a young, regional, privately owned retailer. You should expect that the global manufacturer will operate at the “managed” or “optimizing” levels across most attributes simply because of its age, regulatory requirements, level of risk and expectations of shareholders.

By comparison, reaching a “defined” level of maturity may be enough for the small retail business to meet its goals. However, should the private retail operator enter new markets, expand its staff, establish franchises or eventually go public, it may need to advance at least some attributes of its governance to manage risk, support its growth strategy, and satisfy investors and stakeholders.

Governance is Flexible and Dynamic

As the retail store example demonstrates, governance is not a one-size-fits-all task. This is an essential concept to communicate throughout any governance initiatives you undertake. The environment in which you operate is dynamic; your governance framework can and should scale and adapt along with you.

Consider the amount of uncertainty and change that you have navigated in the past year, three years or even five years. Organizations are constantly beset by change — growth and expansion opportunities, regulatory changes, competitive pressure, market disruption, technological advancements, and changing consumer and employee expectations.

An effective governance framework should undergo periodic reassessments and recalibration to ensure it stays attuned to your operations. Ultimately, this is an asset to your organization. By ensuring your governance framework grows and changes along with your organization, you will maintain the guideposts your organization needs to stay focused on strategic objectives, ethical behavior and continual improvement.

Click here to access Weaver’s Governance Maturity Model Self-Assessment Tool and get started. If you would like assistance, contact us to discuss how Weaver can work with you to assess your organizational governance to improve management of your organizational performance.



Download Weaver's Governance Maturity Model Tool.