Governance systems are the structures and processes by which an organization makes decisions, allocates authority, and holds itself and its people accountable for pursuing its objectives.
A governance system answers who decides, how, and on whose behalf. It includes formal elements such as ownership, boards, voting rights, and bylaws, and working elements such as ethics, risk management, compliance, and administration. The American Society for Quality describes governance as "a system by which an organization makes and implements decisions in pursuit of its objectives" (ASQ). Governance is distinct from management: governance sets direction and provides oversight, while management carries out the work, a distinction developed in Mosaic Project Services' white paper Governance Systems and Management Systems.
Systems vary chiefly in how authority is distributed. Church polity offers a clear contrast: the Catholic Church is governed hierarchically through bishops under the pope, while Presbyterian churches are governed by elected elders in representative bodies. Business offers others, including the venture-backed model described in 📝Traditional Silicon Valley Financing System, where investors buy preferred stock and gain board influence, and the 📝Worker Cooperative, where worker-members govern on a one-member, one-vote basis. Representative government applies the same logic to the state.