Building a Better Mental Model for Governance

Governance is a funny thing – both ubiquitous and categorically difficult to define. It is often reduced to voting mechanisms, but this isn’t the full picture. We need a better mental model for governance that accurately reflects its complexity. 

Why do we need a better mental model? 

(1) Without a common definition of governance, we run the risk of miscommunication and misunderstanding. This hinders our opportunity to research, learn, and deepen collective knowledge. 

(2) We commonly define governance by the visible aspects of a system (i.e., rules, voting, and decision-making mechanisms). Doing so fails to account for the myriad other factors (e.g., socio-cultural, operational, and economic) that influence decision-making. A narrow definition of governance limits the diversity of information and quality of analysis which informs the design of our systems. Using a narrow definition of governance is a bad practice with potentially catastrophic consequences for our communities. 

So, how should we think about governance? 

Simply put, governance refers to the structures and processes that together determine how decisions are made in a given context. In short, it includes:

• Rules & processes on what decisions can be made;
• Rules & processes on how a system and its rules can be changed;
• Bodies, institutions, and procedures to monitor compliance to the rules, hold actors accountable, and resolve conflict.

A better model for governance combines what we traditionally think of as governance with:

• Socio-cultural components (e.g., purpose, cultural norms, communication);
• Accountability and conflict resolution; 
• Information structures (e.g., communication channels, reporting, and documentation); 
• Operations (e.g., economic, treasury, and people management); 
• Power and value distribution (e.g., ownership and incentive mechanisms).

Simple, right? But in complex adaptive systems, which we believe decentralized organizations and communities mimic, governance is much more dynamic. What’s immediately visible in governance and most frequently referred to as “governance” – i.e., rules and decision-making mechanisms – are in fact underpinned by a web of interdependent attributes, all of which influence decision making.

Through this improved, nuanced mental model, governance is defined as the place where membership rights (1), decision-making processes, incentives, accountability, community composition and culture, and legal and ethical responsibilities converge. The outcome of this convergence can enable or undermine a group’s ability to effectively navigate and coordinate change. In other words, governance is the place where the organic complexity of human behavior and social systems meet structures (rules & processes) that help inform, shape, and drive the intended outcomes of a collective. 

What does this mental model allow us to do? 

We can approach designing governance in a more holistic way through this mental model. Rather than strictly looking at rules, voting, and their enforcement, we can begin to consider how the broader context (cultural, behavioral, economic, and collective) influences collective decision making – and ultimately how we could improve it.

This is the first in a series of articles intended to explore and define our take on governance. It’s a big and complex topic, so we’re breaking up our thoughts into this series of quick and digestible articles. In this first piece on Building a Better Mental Model for Governance, we’re intentionally not yet delving into context, culture or why governance is so hard.