Governance is primarily intellectual exercise

Rules, standards, and laws are the minimum but not sufficient requirements for governance. Governance is a broader, an all-inclusive concept. Parliament frames rules and regulations, and establishes various agencies like the securities and exchange commissions, the comptroller and auditor generals, competition commissions, anti-corruption commissions and registrar of companies. The ministries and private sector organisations follow these regulations. These rules, regulations, and regulators do not, however, work sufficiently. Parliamentary standing committees are not formed according to standard parliamentary policies in the functioning democracies. Many ministries do not prepare annual reports regularly. And the Office of the Comptroller and Auditor General, the supreme audit institution, does not enjoy much power.
There are codes of corporate governance all over the world. The chairman or executive directors or some influential institutional shareholders usually nominate the non-executive directors (outsiders). Influence may be exerted in this nomination process. Thus mere skills, rules, codes, or regulations, though necessary conditions, are not sufficient conditions for good governance.
MANAGEMENT VS GOVERNANCE: Management is mainly busy with day-to-day affairs whereas governance (the Board) is concerned with strategy and policy matters. Non-executive directors discuss with the executive directors on strategic issues like financing, budget, investment opportunities, and competitiveness. Management, on the other hand, deals with day-to-day relatively structured issues like demand forecasting, production, job scheduling, factory management, labour management, preparation of accounts and annual reports.  The latter are subject-specific skills and tasks which are routine matters. The board of directors works out a comprehensive plan. Here knowledge and skill in specific subjects is not enough. Knowledge of the business environment at home and abroad, government fiscal and monetary policies affecting the company, government regulations, competitiveness, stakeholders' expectations, future potentialities and threats are very important. Since the management is busy in repetitive works, it can be bogged down in specific routine matters. The Board, particularly the non-executive directors (who are drawn from university professors, lawyers or celebrated personalities), on the other hand, is concerned with the broader market and continuously changing issues.
SKILLS VS KNOWLEDGE: Knowledge has emerged as primary resource for economic development; land, labour and capital - the traditional factors of production, have become secondary (Peter Drucker 1988). In early eighties, corporate executives (expertise) around the world took large benefits and perquisites which were not consistent with company performance. Thus skill and expertise are not sufficient to avoid self-interest. True 'knowledge' is necessary to overcome self-interest and greed. Knowledge is more than skill and expertise.
Governance is a broader concept which has to deal with many subjects and many disciplines of knowledge in addition to subject-specific skill and knowledge. Skill is attained predominantly from repetitive and existing information, whereas knowledge is predominantly concerned with independent mind, scrutiny, exploration, and research.
GOVERNANCE IS PRIMARILY INTELLECTUAL EXCERCISE: Frederick Hayek (1945) held that knowledge never exists in concentrated or integrated form. Knowledge or wisdom exists neither in physics nor in economics nor in literature. To gain it one has to delve into all relevant subjects. In philosophy, knowledge is a belief or reason where there is no overriding belief or reason to the contrary. It means that when two beliefs or reasons are conflicting with each other then there is need for dialogue, analysis, scrutiny, and synthesis of these conflicting beliefs which will give birth to better beliefs - a state of knowledge as against a state of fixed beliefs. Good knowledge starts with a belief first at the individual level, then it is checked with family, the community, country, and finally, with the international level. Climbing this ladder is a rare behaviour, usually confined to the intellectuals.
AN INTELLECTUAL IS PRIMARILY AN INDEPENDENT PERSON HAVING DIVERSE IDENTITIES: True independence has a broader meaning. Let us ask - why, when and how do we influence others? One way is by information and knowledge, which is good. But we can also influence others out of self-interest. Religion, race, colour, class relation can influence transaction, interaction, behaviour, and decision making. A single unique identity can be belligerent too. Amartya Sen's (2006) book Identity and Violence argues that self-interest, devoid of competition, comes from narrow identity. Therefore, for free, fair and independent decision, one has to avoid narrow specific identity. An independent man has plurality of identities. He is at the same time a fan of folk and classical music, football and tennis, collectivism and individualism, a poet and a philosopher, a teacher and a researcher, a theorist and an empiricist. He dwells in these diverse and collective identities and thoughts; none of these is taken to be his only identity or singular membership category. He takes decisions on merit and reason rather than from any specific line of identity. But people in general love to identify themselves with a particular religion or political party, and have a strong regional view.  
EXPERTISE AND ENLIGHTENMENT ARE NOT SAME: Expertise alone is not sufficient for good governance. Governance is thinking of things, critical thinking, epistemic and adequate justifications, making of new ideas, independent reasoning, purifying reason (Immanuel Kant), greatest good for the greatest number, and aesthetics or the sense of proportions. For enlightenment we need psycho-philosophical development together with skill and technological development. An enlightened person must practise science, philosophy, literature, sports and music. Music and sports engage intelligence; music develops sense of proportion, and playground is the place of people of diverse identities. Technical skill alone is devoid of awakening of thought. An expert does not necessarily have all these virtues. For example, an expert has justifications but an enlightened has richer or epistemic justifications.
Functioning parliaments around the world have a provision for independent MPs who have rendered distinguished public service or have distinguished themselves in the field of arts and letters, culture, the sciences, business, and industry. Similarly, corporate boards in the US and the UK are now dominated by independent directors who are experts as well as intellectuals.
Dr Dhiman Chowdhury is Professor of Accounting, University of Dhaka.
dhiman_chowdhury@yahoo.com
 dhiman_chowdhury@yahoo.com