Figure 2: No Copyright Infringement Intended

 

About

The covid pandemic and the several crises it created may begin to fade in the coming year, but a slew of other issues, ranging from the failure of climate action to the deterioration of societal cohesiveness, do not appear to be going away. To address these issues, leaders will need to adopt a new, more inclusive governance style. People's faith in their leaders, on the other hand, appears to be eroding in recent years.

 

About Governance:

'Governance' refers to both the process of making decisions and the process of putting those decisions into action (or not). It can be used to corporate governance, international governance, national governance, and local governance, among other things.

 

Governance 1.0:

• Following World War II, both public and corporate governance were characterised by the reign of a "strong leader."
• This style of leadership thrived in a culture where knowledge was expensive, hierarchical administration ran smoothly, and technological and economic advancements benefited practically everyone.

 

Governance 2.0:

• This paradigm, which arose at the end of the 1960s, asserted the primacy of material riches and corresponded with the growth of "shareholder capitalism" and progressive global financialization, upheld the primacy of material wealth.
• Managers who were only answerable to shareholders ruled supreme and had worldwide clout. Despite the fact that the global financial crisis of 2008 shattered this model, its narrow vision survived.

 

Governance 3.0:

• Crisis management dominates decision-making, with leaders focusing on operational challenges and ignoring potential unintended consequences.
• The covid shock ushered in Governance 3.0, and this model's trial-and-error approach has resulted in chaotic pandemic and aftermath management.

 

Consequences of poor governance:

• Poor or weak governance is a cause of catastrophe risk, and it's linked to a slew of other risk factors like poverty and inequality, as well as poorly planned urban expansion.
• The most vulnerable, the poor, the weak, women, children, and the environment are frequently victims of bad government.

 

Need for new governance model:

• The problem with global governance is that both the institutions and the leaders are no longer suited for their function.
• Public and corporate governance must adapt as the Fourth Industrial Revolution and climate change continue to impact people's lives.
• A new governance paradigm is required for the world, one that prioritises the primacy of society and nature over the commercial and financial world.

 

Approach Under Governance 4.0

Long-Term Strategic Planning:

• Under Governance 4.0, short-term management must be replaced with long-term strategic thinking.
• Focusing on issues like the pandemic, socioeconomic crises, and people's mental health must be accompanied with measures to combat climate change, reverse biodiversity loss and environmental harm caused by human activities, and handle linked challenges like forced migration.

Responsibilities to be Assumed by Businesses:

• The new model will take the place of the previous model's tunnel vision and top-down approach. The roles of each stakeholder in society must shift in a complex and linked environment full of discontinuities.
• Enterprises must no longer overlook their social and environmental consequences, and governments must be held accountable for ensuring that businesses are held accountable.

Priorities Must Change:

• The reliance on a narrow view of economics and short-term financial concerns must be abandoned. The supremacy of society and nature, on the other hand, must be at the heart of any new government structure.
• Finance and business are critical, but they must serve society and the environment rather than the other way around.

New Leaders:

• Many leaders, particularly business CEOs who advocate for environmental, social, and governance measures, as well as some political leaders, are eager to usher in a new era of governance.
• Leaders that move outside of their narrow interests as trailblazers and advocate for particular action to combat climate change and address social injustice should be welcomed.
• The best indicators of today's responsible and responsive governance are how much leaders accept and consent to stakeholder responsibility.

 

Conclusion:

• Although stakeholder accountability assessment is still in its infancy, the creation of uniform metrics will allow us to assess whether leaders are taking a more comprehensive perspective of their role and duty.