Abstract
Background: The governance of organisations has entered a new era, one that demands demonstrable maturity rather than mere compliance.
Objectives: This study explores the strategic role of ISO 37004:2023 Governance of organisations – Governance maturity model – Guidance, the first international standard designed to measure and enhance governance maturity.
Method: Through a review of literature, policy frameworks, and emerging practice, the article positions ISO 37004 within the global evolution of governance towards one which steers organisations towards value creation and sustainable performance.
Results: It analyses how the standard reframes governance assessment around three governance aspects: governance behaviour, effectiveness, and efficiency. By assessing governance using these aspects, ISO 37004 provides a universal, outcome-based model applicable across sectors, jurisdictions, and organisational sizes, enabling longitudinal measurement and comparability. The findings highlight that governance maturity assessment strengthens accountability, credibility, strategic clarity, continuous improvement, and risk mitigation which are key enablers of organisational resilience and trust.
Conclusion: The study concludes that measuring governance maturity is now a strategic imperative and that ISO 37004 advances governance from a compliance exercise to a dynamic system of evaluation and improvement, embedding governance as a driver of long-term value creation.
Contribution: The article calls on boards, professionals, and regulators to adopt ISO 37004 to ‘measure what matters’ and to institutionalise governance as a cornerstone of sustainable success.
Keywords: governance maturity; ISO 37004; corporate governance; governance measurement; governance effectiveness; strategic leadership; outcome-based governance; sustainable value creation; governance assessment models; governance performance evaluation.
Introduction: The imperative to measure governance
The governance of organisations has entered a new era. No longer is the emphasis solely on compliance with codes or regulations; the question boards and stakeholders must now answer is: how mature is our governance, and how can we prove it over time? The publication of ISO 37004:2023, Governance Maturity Model – Guidance, marks a milestone in this journey. It is the first internationally agreed standard for measuring governance maturity, enabling organisations to evaluate, compare and continually enhance governance in a structured, globally consistent manner (International Organization for Standardization [ISO], 2023).
This study examines the reasons for the emergence of maturity level measurement, evaluation and monitoring activities, which are crucial for the evolution of corporate governance from the past to the future, as well as the challenges faced in practice. The aim of the study is to clarify the importance of assessing the maturity level of corporate governance and to create valuable resources for professionals and researchers in this field. Additionally, this study seeks to contribute to the literature by providing policy recommendations and a call to action to all stakeholders.
From inputs and outputs to the outcomes
The strategic importance of governance is widely recognised as a matter closely monitored by all stakeholders in the context of corruption, scandals and performance issues emerging in the business world. In this regard, every incoming administration is committed to being transparent and accountable in a way that avoids conflicts of interest. Efforts to achieve this are evident in the number of general assembly and board meetings disclosed to the public, as well as the information and presentations made regarding the implementation of key corporate governance indicators (Rehman & Hashim, 2020). However, it is a fact that traditional governance assessments often focus on inputs, such as the number of meetings held, or outputs, like the existence of policies or charters. These measures reveal little about whether governance is effective. ISO 37004 challenges this by asking a more fundamental question: What is the net result of governance for the organisation and its stakeholders?
Drawing on ISO 37000:2021, the governance of organisations standard, ISO 37004 assesses governance maturity across three interdependent outcomes:
- Effective performance – delivering on purpose and objectives.
- Responsible stewardship – managing resources and relationships sustainably.
- Ethical behaviour – acting with integrity in decision-making and operations (ISO, 2023).
By shifting attention to the outcomes, boards move from a compliance mindset to one of value creation, focusing on governance’s tangible impact rather than its procedural form (Good Governance Academy, 2023a). The key point here is the importance of changing mindsets. A sole focus on compliance is no longer sufficient to achieve the strategic goals and expectations of businesses in today’s digital landscape (Bozkuş Kahyaoğlu, 2024). Strong leadership is essential for sustaining and implementing this new mindset across the organisation. The board must exemplify effective leadership and drive the necessary cultural and behavioural changes by raising employee awareness. Achieving this requires a review of measurement and monitoring activities and how they are executed (King, 2025; Tarhan et al., 2016).
Why measurement matters?
In the realm of corporate governance and the rapidly evolving business landscape, high performance alone is no longer enough. It is essential to systematically and periodically evaluate the effectiveness and efficiency of operational processes. To assess effectiveness, a key question to consider is, ‘Are we doing the right things?’ To ensure that productivity aligns with effectiveness, we should also ask, ‘Are we doing things rightly?’ Furthermore, we need to address, ‘How well are we achieving our corporate goals in alignment with our vision and mission?’ This helps us understand our overall performance, and it is necessary to measure it with the right representative metrics (Bozkuş Kahyaoğlu, 2024; Rehman & Hashim, 2020; Rehman et al., 2023).
In addition to these fundamental questions, it is crucial to foster a shift in perspective and drive cultural transformation within the organisation. This approach will help solidify the successes achieved with a high governance maturity level and align them with sustainable goals. It is a fact that governance maturity is dynamic, evolving over the years as governing bodies respond to emerging risks, stakeholder expectations and societal change (Aras & Buyukozkan, 2023; Hanelt et al., 2021). Measurement brings significant organisational benefits (King, 2025; Rehman & Hashim, 2020), such as:
- Accountability: Awareness of evaluation strengthens commitment to responsible decision-making.
- Credibility: Evidence-based governance builds confidence among investors, regulators and employees.
- Strategic clarity: Understanding governance strengths and gaps supports prioritisation of board agendas.
- Continuous improvement: Regular measurement enables targeted enhancements to governance practices.
- Risk mitigation: Identifying weaknesses early helps to prevent or reduce the impacts of governance failures (Good Governance Academy, 2023b).
Importantly, ISO 37004’s maturity model enables longitudinal tracking of governance, offering a richer picture than one-off point-in-time assessments (Chalmers, 2024).
Universal applicability and flexibility
One of ISO 37004’s strengths is its universal applicability. The model can be used by organisations of all sizes and sectors, public, private, non-profit and micro-enterprises in any jurisdiction. It can also be applied alongside any governance code, from South Africa’s King IV Report to the United Kingdom (UK) Corporate Governance Code, allowing for both local relevance and global comparability (ISO, 2023).
Contrary to the perception that governance is a ‘later stage’ concern for smaller or fast-growing businesses, early adoption of governance principles often accelerates growth. Corporate governance, as described by Chalmers (2024), functions like the brakes on a race car; instead of slowing you down, it allows you to accelerate with greater control.
Moving beyond box-ticking
ISO 37004 evaluates governance maturity across three aspects:
- Governance behaviour, the approach and leadership culture applied by the governing body.
- Governance effectiveness, the degree to which governance principles achieve intended objectives.
- Governance efficiency, clarity, delegation and continual improvement of governance practices (ISO, 2023).
These aspects ensure measurement is not limited to procedural compliance but encompasses how governance is enacted and improved over time. This framework helps boards to focus not just on ‘governing the business’ but also on ‘the business of governing’ (Chalmers, 2024).
A strategic imperative in a complex world
Today’s governance challenges are unprecedented, including geopolitical instability, accelerating technological change, shifting societal values and escalating climate risks (King, 2025). In this environment, governance must be future fit, inclusive of diverse stakeholder perspectives and grounded in sustainable value creation (Altukhova et al., 2018; Reddy & Reinartz, 2017). Measuring governance maturity is no longer optional; it is a strategic imperative that equips boards to navigate complexity with purpose, foresight and integrity.
ISO 37004 offers boards a practical pathway to achieve this. It provides a common language for governance maturity, fosters comparability across organisations and jurisdictions and embeds an ethos of continual improvement. Most importantly, it keeps the focus on what truly matters: the impact governance has on organisational performance, ethics and stewardship.
Conclusion and a call to action
This study outlines the essential requirements of corporate governance and explains the changes related to the ISO 37004 standard. Board members must go beyond mere legal compliance and embrace the value creation philosophy presented here, which includes consideration for all stakeholders. One significant and irreversible impact of digitalisation is that businesses, as vital components of social life, must operate and generate value with an awareness of their social impacts. This approach will promote greater alignment with sustainable development goals.
ISO 37004 is more than a measurement tool; it is a mindset shift. It challenges governing bodies to move beyond ticking boxes and to embrace governance as a driver of long-term value. For those of us committed to professionalising governance globally, this standard is a game changer. We call on boards, governance professionals and regulators to adopt ISO 37004 to measure what matters and to use the insights gained to strengthen governance for the benefit of all stakeholders.
The journey from compliance to maturity is one every organisation should undertake not only because good governance is the right thing to do but also because it is fundamental to sustainable success.
Acknowledgements
Competing interests
The author declares that no financial or personal relationships inappropriately influenced the writing of this article.
Author’s contribution
C.J.C. is the sole author of this research article.
Ethical considerations
This article followed all ethical standards for research without direct contact with human or animal subjects.
Funding information
This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.
Data availability
Data sharing is not applicable to this article as no new data were created or analysed in this study.
Disclaimer
The views and opinions expressed in this article are those of the author and are the product of professional research. The article does not necessarily reflect the official policy or position of any affiliated institution, funder, agency or that of the publisher. The author is responsible for this article’s results, findings and content.
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