Extract from the book: Inactivity Based Cost management: Measurement of Intangible: Governance, Ethical & Fiscal Responsibility and Acountability
Where does Governance exist? The interesting quote of Robert Doniger, [from Timeline by Michael Crichton], I’m not interested in the future; I’m interested in the future of the future, possibly has a clue. To-day was the future of yesterday and tomorrow is the future of to-day as well the future of the future of yesterday. Effectively what Doniger says is that he dwells in the past all the time the fascinating historical events and ever interested in tomorrow, a dreamer and a maverick he is, that he ignores ‘to-day’ completely. Working like a beaver, he takes his scientists and cultural experts to the past making them stuck in the ruins of history and the genius that he is, promises a great future of the future making the people of to-day to sit in awe and wonder till they realize the future ever remains a distant dream. A solar view of the planet displays the monumental towers everywhere, promises that are not kept. These towers represent a cost already incurred that cannot be recovered. Donigers do not think that it is necessary for them to be concerned about to-day and not at all obliged to inform or discuss the cost consequence of their action, where to-day represents the effect of decisions of yesterday for all to see with utter helplessness.
Governance is antimatter. So are the expressions Government of the people, by the people, for the people. These do not take up space and have no mass. The scientists are looking for an answer as to how the mass was created in billionths of a second afterthe Big Bang. Antimatter cannot be even thought about by all the faculties the human mind possesses, as to what antimatter was beforethe Big Bang. Meaning antimatter can be discussed only in relation to matter. Governance is same as antimatter – intangible – meaning the one that is not tangible as known in the business vocabulary. It can be ‘seen’ however, but only in relation to tangible
Accountability, Governance, Good Intentions, Confidence Measures, Responsibility, all are Intangible. They are not ‘seen’, just like running, sleeping, walking, idling etc. that are intangible elements. In fact a sentence cannot be formed without the intangible as this is the rudimentary verbal element that develops to form a stem and to the stem is added a personal ending so as to form a complete verb. The Earth’s atmosphere is thick enough that virtually no X-rays are able to penetrate from outer space all the way to the Earth’s surface. Neither the atmosphere nor the x-ray one is able to ‘see’. When the same x-ray is passed through a machine the result is not only seen but is also captured for verification.
‘Running’ is intangible that one does not ‘see’, nevertheless when we say triple Olympic champion Usain Bolt set a new world record as he stormed to a stunning victory in the 100m at the World Championships in Berlin in 9.58 seconds, millions could ‘see’ it happening. When intangible is associated with tangible it becomes alive. Just like an antiparticle when it collides with a particle that merges and converts into pure energy, intangible and tangible together become pure energy. Similarly Governance merges with tangible matter to become a powerful force that could be captured and yet remains unaffected by any possible loss or depreciation. When Governance collides with the matter it annihilates the inert or idle element of matter and transforms into pure energy. Governance is the cause of pure energy, without which matter remains inert.
In ‘running’ the intangible is the nucleus at the center of the operations with actors performing the task around it. When the results are captured we get a database of performance benchmarks that are comparable to any such tasks accomplished by other actors elsewhere. Similarly Governance is the nucleus surrounded by actions attributed to the intangible in question. The connotation seems to be missing in the normal parlance of the word Governance. Illustratively, In the Government Auditing Standards January 2007 Revision, issued by the United States Government Accountability Office, the word Governance has been used sixty times and barring two, the word Governance is prefixed with the words “Those charged with” [Governance]. It implies: 1. Governance is a staff function and there are individuals who are not entrusted with Governance. 2. Audits are undertaken in the same pattern as Balance Sheet audit: “Performance audit objectives may vary widely and include assessments of program effectiveness, economy, and efficiency; internal control; compliance; and prospective analyzes.”
In both the cases understanding of Governance needs further explanation. The expression “Those charged with Governance” is akin to “those who are charged with breathing”. Tangible item is inert and it is the intangible that converts the mass into energy. Governance is a dynamic force. In ‘running’ if one takes a photo at the time the athlete is getting ready to run there is no telling that the running has taken place. If the athlete abandons running and so reported later, it means ‘running’ has not taken place. Similarly reporting to those who are entrusted with Governance after the events have taken place that such and such lacunae are found means Governance has not taken place ab initio. Auditors who go for audit are to ensure that Governance takes place but the current reporting system is like a pussycat coming back after threatening the little mouse under the chair without performing the duty of looking at the subject. What happens in such cases of auditing, in reality, is reporting of the activity called ‘fraud or misfeasance’ is construed as reporting of the activity called ‘Governance’.
The traditional application of auditing standards is not valid for Governance. Governance reporting is like running commentary on a live TV of an athletic event analyzing as to the distance covered and yet to be covered. Illustratively, a passenger in an aircraft is provided with the video display of the real-time information on the flight path, a map covering the route, the position on dot, altitude, cruising speed, distance to destination, time from origination point and time to reach the destination. The passenger is given the assurance on the Governance aspects of the flight thereby giving a level of confidence while flying. When the captain announces the likely turbulence the passenger willingly clicks the safety belt without any murmur. Auditors are to ensure that such real-time reporting system is available. When Governments or Corporate provide the public a reporting system of a similar kind, Governance is said to be taking place. Governance is always in the present tense. Governance is feasible for only one day, i.e. today. Mindset of constraints imposed by a Balance Sheet shall not be brought into Governance reporting system. A statement of account like a Balance Sheet has set designs for reporting whereas Statement of Accountability, covering the deeds or misdeeds, with Governance aspects well defined, enlarges the scope, as it is dynamic and is the energizer. Accountability is the essence of Governance and its very purpose.
Jayaraman Rajah Iyer