Necessary Governance Cost

Definition

Coordination required to maintain institutional integrity—the minimum oversight needed for accountability and legitimacy. Necessary governance cost is proportionate and irreducible.

Example

A board reviewing the annual financial statements is necessary governance cost—it's proportionate to the risk and genuinely required for institutional accountability.

Source

GCC Section 8

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Related Terms from Governance Coordination Cost

Governance Coordination Cost (GCC)

Authority FragmentationA

Governance LayeringL

Compliance Surface AreaC

Compounding Governance Cost

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Governance Coordination Cost