MaRS Library Good governance—An introduction
A bright idea takes shape in the mind of an entrepreneur. Some specific need or want will be satisfied when this idea gets to market. It may be the sale of a product or the offering of a service. The end customer may be another business (B2B) or an individual consumer (B2C). The enterprise will be for-profit or not-for-profit. To supply this need or want, a venture is created. If it is a non-profit organization (NPO), it will probably be funded by its founders’ own resources at the start, or from grants and donations. If it is a for-profit venture, it usually begins with the founder’s own funds, then friends and families invest, debt is provided, and at the right time, venture capital is acquired.
Step, by step, a board evolves
As each organization grows, an operating team is hired with the skills and knowledge to carry out the plan as directed. Whether they are volunteers or paid staff, they need to“buy in” to the elements and aspirations of the organization and assist in every way they can, within the limits of their capacity. The organization’s leader will want to be sure that what he or she is doing is worthwhile, that their management style is fair, and that the organization is valuable and within the limits of the applicable laws. So the leader will need guidance and support, just like the team does. When the time is right, even before incorporation, the organization will need some form of a board of governors, directors, or advisors to provide this oversight and advice.