Shared governance – benefitting from a diverse range of stakeholders.

Shared governance – benefitting from a diverse range of stakeholders

9 May 2022

The article at a glance

Cambridge Judge Business School hosts this week a first annual Conference on Shared Governance, in conjunction with Stanford University. Professor Mauro Guillén, Dean of Cambridge Judge, writes about how shared governance can help address issues ranging from climate change to inequality.

Mauro Guillén
Professor Mauro Guillén

Amidst the cataclysmic events of the past few years, including a global pandemic and tragic war in Ukraine, it’s important that a business school also focus on less dramatic issues of huge importance to commerce, government and society at large.

That’s why Cambridge Judge Business School is proud to host this week a first annual Conference on Shared Governance, in conjunction with the Centre for Advanced Study in the Behavioral Sciences at Stanford University. The 12-14 May conference brings together scholars, practitioners and other experts to discuss a variety of topics related to how shared governance issues affect business, government, the planet and our society.

Among participants are junior faculty and doctoral students from around the world, a wealth of talent that Cambridge Judge is delighted to welcome.

Panel discussions include sessions on industry-government relations, green initiatives in cities, digital tools and practices, gender inequality as it relates to tech and scientific ideas, civil service reforms in the Global South, development, and learning through collaboration.

Many thanks to the conference co-organisers, Professor Woody Powell of Stanford University Graduate School of Education and Professor Robert Gibbons of MIT Sloan School of Managment, and to Erin Hallett, Director of Alumni & External Engagement at Cambridge Judge, for helping to make this happen.

Drawing on the talents of many to benefit countless more

So why is Shared Governance so important? As implied by the name, Shared Governance gives different stakeholders a voice into how an organisation functions – hopefully drawing from the talents and ideas of many rather than a few, in order to benefit countless more.

Following the horrors of World War II, a raft of international institutions was established as part of a Global Liberal Order for economics and geopolitics – the United Nations, International Monetary Fund, World Bank and General Agreement on Tariffs and Trade (forerunner to the World Trade Organization) – and all these bodies relied upon a form of Shared Governance.

This postwar Global Liberal Order Version 1.0 then gave way in the 1970s to a Global Liberal Order Version 2.0, the liberalising of markets and capital flows in developed countries in response to oil shocks, inflation and economic stagnation. But the excesses of such liberalisation were exposed in the financial crisis of 2008, giving rise to populist sentiments manifest in events like the Brexit vote in the UK in 2016

Addressing those left behind

In a book published a few years ago, Rude Awakening, I called for a new Global Liberal Order Version 3.0 to address problems caused when – amidst immense technological opportunity – many people feel left behind and climate change is a rapidly galloping threat. Shared governance principles lay at the heart of two areas I identified as requiring the world’s immediate attention:

  • Redirecting the energy of popular movements: Defenders of liberal democracy need to better convince people of all political persuasions that a Global Liberal Order reduces inequality by raising all boats. This means listening and responding to the voices of those who feel left behind – and not just relying on technocratic arguments to convince them – which means a sharing of ideas and solutions, the bedrock of Shared Governance.
  • Better engagement of citizens through “deliberative democracy”: An emphasis on combining the principles of representative and direct democracy can help fight the polarisation that has afflicted the politics of the US and other countries. Treating citizens as decision makers rather than merely voters will demonstrate the effectiveness of Shared Governance better than any political speech ever could.

Governance concepts evolve over time

Concepts of governance evolve over time. The first version of the UK Corporate Governance Code, published in 1992 following a series of high-profile business scandals, defined corporate governance drily as “the system by which companies are directed and controlled”, with a focus on the Board of Directors, shareholders and auditors.

An Introduction to the Code’s current version is more expansive, noting that “companies do not exist in isolation” and that “the environment in which companies, their shareholders and wider stakeholders operate continues to develop rapidly” – so long-term success requires building and sustaining relationships with a wide range of stakeholders “based on respect, trust and mutual benefit.”

Shared Governance is about such respect, trust and mutual benefit – and a wide range of diverse views – so I look forward to the ideas and solutions presented at our first annual Conference on Shared Governance.