The Role of Governance on the Wellbeing of Individuals or Organisations

Abstract

Ten of the eleven OECD metrics established for measuring individual wellbeing can be directly affected by how organizations are governed. Two types of governance architecture are considered: (i) simple centralised command and control hierarchies and, (ii) an ecological form universally found in nature and pre-modern societies that Nobel Laureate Elinor Osprom described as possessing “polycentric compound” decision-making centres as also found in human brains. Modern stakeholder controlled organisations that survive over generations typically possess an ecological form of governance. This can be explained by the ability of networks to simplify complex dynamic environments as comprehensively as required to survive from distributed decision-making. While centralised hierarchies simplify complexity incompletely and less immediately by filtering data through different levels that can obscure harms, opportunities and existential threats. The paper concludes that the OECD metrics provide a basis for rating the quality of governance of organisations or democracy with rich opportunities for research.