In this piece Dr Roshan Boojihawon emphasises how strong, inclusive and decentralised governance is essential in facilitating sustainable growth.
Aligning Good Governance for Good Growth
Economic growth is no longer the endgame in the face of intersecting challenges—climate breakdown, social inequality, and eroding public trust—the more critical question is what kind of growth we are pursuing. “Good growth” must be inclusive, fair, locally grounded, and environmentally sustainable. However, such growth cannot be engineered solely through fiscal stimulus or technological investment; achieving this type of growth demands something foundational: robust governance and the capacity to scale it.
Governance is perceived as an administrative process, the silent architecture of institutions, guiding compliance, and decision-making. Yet, it is precisely this architecture that determines whether strategies for achieving net zero, helping social mobility, or promoting regional regeneration can take root and endure.
Nowhere is this more evident than in the UK’s ongoing efforts to decarbonise at pace. Despite the urgency, structural weaknesses in governance have hindered progress. A telling example lies in housing retrofit. Homes account for around 16% of UK emissions, yet retrofit schemes have been repeatedly delayed or diluted due to fragmented responsibilities, policy inconsistencies, and competing regulatory objectives. In conservation areas, for instance, strict planning laws obstruct retrofit efforts, resulting in millions of tonnes of avoidable emissions and worsening regional inequality. Here, we see the cost of misaligned governance, where good growth is not blocked by a lack of innovation but by institutional inertia.
Contrast this with the example of Nottingham, a city that has reimagined its local governance to meet the demands of sustainability and social equity. Nottingham’s Green Partnership exemplifies collaborative governance, bringing together the city council, universities, local businesses, and civic organisations to co-create and deliver a shared green agenda. Rather than centralising power or outsourcing responsibility, Nottingham has built trust and coordination through structured dialogue and shared leadership. Similarly, Copenhagen’s journey to carbon neutrality showcases how polycentric governance—marked by iterative consultation, decentralised decision-making, and broad stakeholder involvement—can accelerate sustainable growth. Its success lies not just in ambitious policy but in governance structures that ensure community buy-in and localised implementation.
Conversely, governance failures also offer important lessons. The UK’s top-down “SuperPlaces” or “Robin Hood Energy” initiatives highlight how centralised strategies, even when well-intentioned, risk exacerbating local inequalities when they fail to involve communities or local government meaningfully. Likewise, Ireland’s well-intentioned peatland restoration policies floundered in rural areas where community voices were not included in the planning process, emphasising the dangers of implementing green growth without procedural justice.
The broader governance landscape in the UK remains highly centralised, particularly compared to other developed nations. This centralisation has constrained local authorities, reducing them to “policy takers” operating within fragmented and often contradictory national frameworks. Despite over 75% of councils declaring climate emergencies between 2018 and 2019, only 2% had delivery plans two years later. The gap here is not just financial—it is one of agency, capacity, and coherent governance support.
There are glimpses of innovation, however. Implementing the regulatory sandbox model, particularly in the energy sector across Europe and the UK, has allowed for controlled experimentation in areas such as peer-to-peer energy trading. These sandboxes create temporary flexibility within rigid regulatory frameworks, encouraging novel approaches to complex challenges. Yet, access remains uneven; smaller organisations and community-led projects often lack the resources to participate meaningfully.
All these hopeful and cautionary examples reinforce a central truth: good governance is not merely a procedural concern—it is the primary enabling condition for sustainable growth. However, to align with good governance, we must move beyond isolated success stories and towards enabling structural transformation.
Two key policy shifts are needed.
First, the UK must introduce a National Governance Capability Strategy to equip local and regional authorities with the tools, resources, and mandates to lead on place-based economic and environmental transformation. This should include statutory clarity on climate responsibilities, long-term funding models, and the authority to convene cross-sector partnerships. Recent research outlines nine core governance functions vital for credible climate governance: clear long-term objectives, strategy-setting, independent expert advice, horizontal and vertical mainstreaming, effective coordination, inclusive stakeholder engagement, financial mobilisation, and strong oversight and enforcement. However, current legislative frameworks frequently emphasise strategic direction at the expense of equally crucial functions such as cross-sector coordination and independent advisory mechanisms, undermining effective implementation.
Second, inclusive governance education and literacy must become a national priority. From the boardroom to the council chamber, leaders must be trained in compliance and risk management, systems thinking, inclusive decision-making, and ethical leadership. We need governance education that prepares decision-makers to engage with complexity, balance trade-offs, and build public trust in a rapidly changing world.
Ultimately, the pursuit of good growth—growth that benefits people, places, and the planet—will depend on the quality of our governance. The path to good growth hinges upon governance systems that are agile, transparent, and inclusive. Scaling these practices is not about bureaucratic uniformity but empowering diverse, context-sensitive, and community-centric approaches that align strategic vision with immediate social and economic benefits. It’s about creating governance systems that are agile enough to evolve and stable enough to build confidence and resilience. So, if we are serious about reshaping the future, we must begin by redesigning how we govern it.
About the author
Dr Roshan Boojihawon is Associate Professor in Strategy at the Business School, University of Birmingham and a Visiting Research Fellow at the Open University Business School. He specialises in teaching Strategic Management, International management and related subjects.
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