“Building Successful Business Associations: Why Good Association Governance Matters”

Good corporate governance is crucial for companies large and small in both developed and emerging economies. Today business associations around the world are facing the same set of issues companies began to face two decades ago. How relevant is the concept of governance for them? Who should be engaged in business association governance reform? What are the key principles? Why should you reform? What are the benefits and costs? Where does the impetus for reform come from? Where do you begin?

In this Feature Service article, Aleksandr Shkolnikov, Senior Program Officer for Global Programs at CIPE, talks about good governance as a necessary component of business associations’ effectiveness. As vehicles of the private sector’s transparent participation in the policymaking, business associations in and of themselves are democracy-strengthening and market-reforming institutions. However, they do not fulfill this role simply through their existence. Business associations have to put in place sound mechanisms of their day-to-day operations.

Certainly, various organizations have different needs and challenges regarding governance reform. Yet, there are general steps and model guidelines that any association may follow in order to improve how it is governed and how successful and sustainable it is. Shkolnikov elaborates on those steps and concludes, “Good governance provides the necessary mechanisms for organizations to remain more dynamic, more able to deal with emergent issues by being strategically prepared, develop and deliver valuable services to members, and fulfill their advocacy role.”

Article at a Glance

• Good governance is vital to creating dynamic, sustainable, influential, and truly representative business associations.

• Business associations must embody democratic values and ideals to fulfill their representative role.

• Association governance is about setting up a process that works in a given institutional climate, not just finding the right people.

• Improving governance in business associations is not a matter of choice – it is a necessity for associations that want to remain relevant to their membership and grow.