Harvard Business School defines governance as the system of rules, practices, and processes by which a company is directed and controlled.
Corporate governance mainly involves balancing the interests of many stakeholders in the company, such as shareholders, senior management executives, customers, suppliers, financiers, government, and society.
Good corporate governance helps companies build trust with investors and the community. As a result, corporate governance helps enhance financial viability by creating a long-term investment opportunity for market participants. Engineering governance is an essential component of overall corporate governance. In short, it is the management and improvement of design, development and operating systems.
It is the set of clearly defined structures, processes, and policies that guide and control how organizations align their investments and incentives with the organization’s strategic interests, including risk mitigation.
To explain further, engineering governance is one of the most important ways to obtain high-quality engineering advice in the identification and management of risk, an increasingly important part of the modern engineer’s skill set.
This is especially true for government systems, where engineering advice is vital early in the policy planning and target agreement stage, not just at the point of delivery.
On the other hand, digital technology is an essential component of any future assured engineering governance system, as it needs to support faster and more flexible deployment of products and services. For auto companies, the ability to control and update governance of management systems and business processes is essential.
Manufacturers need to be able to shape and operate a set of structures, processes, and policies that connect interests and incentives within the entire engineering value chain.
Governance systems that integrate digital technologies and process improvement capabilities with compliance requirements are better equipped to alert engineers and managers to risks, and provide information that highlights process improvement opportunities.
Finally, through governance, engineers can look holistically at interrelated systems and processes and understand the risks within this overall lifecycle to help organizations improve their risk avoidance processes.
To achieve this comprehensive vision and understanding, engineers need to be able to analyze disparate sets of data across the organization, and then understand the potential impact of that data on workforces and operating systems. Intelligent technologies can assist engineers in the engineering governance process.
Academic Researcher at New York University Abu Dhabi