The essence of institutions in good governance lies in the fact that in any given national economy, social institutions are mechanisms or patterns of social order. Such institutions are focused on meeting social needs, such as government, economy, education, family, healthcare, and religion. Throughout history, human beings have created social institutions in society to meet such basic needs as stability, law and order and clearly defined roles of authority and decision making. Indeed, social institutions can be most visible when there is lack of effective leadership and governance leading to break down of societal cohesion and social order. It is worth emphasizing that social order necessitates the exercise of leadership and governance as basic components of human organization and interaction. In this sense, leaders play an important role in governance since they provide direction for governance. They do so through the fo teri by the leadership a certain sense of shared understanding, establishment of clarity around roles between institutions, local and national actors. This is done in a manner that promotes collaboration and joined-up working, and also in a way that encourages commitment at all levels.
Governance involves a conscious management of institutionalized structures and processes to enhance their legitimacy. This is undertaken in a manner that implies the interaction between formal institutions and people, among the people themselves and the manner in which decisions are made and implemented in a good environmental setting. The leadership has to set the direction such that in instances where there is no strong leadership that articulates the vision for a defined governance framework then it will never get delivered. In a fundamental sense, good governance requires leadership capacity development and the latter is more than simply skill development. It is more about performance, growth, transformation and change is society. Good governance entails creating an environment that is inclusive, sensitive and responsive to the needs of the people and effective to the many challenges it encounters. In essence, leadership development creates a competitive advantage needed for governance for social and national transformation.
Consequently, governance plays an important role in providing strategic direction for leaders and in helping them to foster commitment, shared aims and various forms of accountability. There is need to emphasize that governance can be used in several contexts such as corporate governance, global governance, national governance, local governance and governance of the various sectors.
A leader without necessary competencies may not be effective and efficient in leading an organization. Globally, competent leadership and governance are recognized as key to the economic and political success of a nation. High growth organizations and institutions have been found to be characterized by objectives and value-driven leadership. It has been observed that failed institutions have been diagnosed to have poor and incompetent leadership. Therefore, as far as corporates and other organizations are concerned, leadership in governance is demonstrated in the willingness and ability to take ownership in a part of an organization and to continually do what is best for the organization. Observably, effective corporate leaders stand on a foundation of solid governance principles. In the interest of these and other stakeholders, the Leadership and Governance Hub at AIU is dedicated to the improvement of the leadership development of its clientele and partners. The core purpose of this Leadership and Governance Hub, therefore, is to develop skills and apacity in a new crop of leaders that can provide s utions to 21st century challenges in Kenya, Africa and beyond. Participants in its programs and planned activities will be empowered to meet and solve complex governance and governance problems and challenges. They will be expected to explore and effectively deal with the emerging global issues that affect governance and leadership in civil society, public sectors and the corporate world. They are expected to be outstanding governance leaders. Indeed, it is not profitable or wise at all to leave cultivating leadership skills to chance since great organizations require great leaders who understand modern governance. These are leaders who have acquired the right tools at the right time to make decisions and make the best of every opportunity. Therefore, leadership must be understood as a critical ingredient of good governance.