Who Actually Holds Power?

Ask most organisations who holds power, and you’ll get a confident answer:
“The board.”
“Senior management.”
“Leadership.”

Yet when decisions go wrong, accountability blurs, or outcomes don’t match expectations, a different reality emerges.

In practice, power rarely sits exactly where governance charts say it does.

Understanding this gap—between formal authority and real influence—is one of the most important (and misunderstood) aspects of governance today.

Governance frameworks are built around formal authority:

• Who is appointed
   
• Who approves
   
• Who signs off
   
• Who is accountable
   

But real-world decision-making doesn’t always follow formal lines.

Power often shifts to those who:

• Control information
   
• Shape narratives
   
• Influence timing
   
• Are perceived as “safe” decision-makers
   
• Have historical or cultural authority
   

This creates shadow decision-makers—individuals who may not hold official titles but heavily influence outcomes.

Research into governance roles from the Institute of Directors highlights that confusion between authority and influence is one of the most common causes of accountability failure.

A core governance problem is that these three concepts are often treated as the same thing—when they are not.

• The formal right to make decisions
   
• Defined by role, mandate, or policy
   

• The ability to shape decisions
   
• Often informal, relational, or reputational
   

• The obligation to own outcomes
   
• What governance frameworks aim to enforce
   

Governance breaks down when:

• Influence exists without responsibility
   
• Authority exists without clarity
   
• Responsibility exists without control
   

Studies on organisational power from MIT Sloan show that influence often outweighs formal authority—especially in complex or fast-moving environments.

As organisations grow more complex, informal power becomes unavoidable.

Common sources of informal authority include:

• Long-tenured employees
   
• Technical experts
   
• Gatekeepers of data or systems
   
• Trusted advisors to leadership
   
• Individuals who “know how things really work”
   

These people are not villains. In many cases, they keep organisations functioning. Problems arise when governance systems fail to recognise or document their influence.

When power is invisible, accountability disappears.

Many governance failures don’t start with bad intent—they start with misaligned assumptions.

Examples include:

• Decisions made informally but defended formally
   
• Responsibility assigned to people without influence
   
• Oversight bodies approving outcomes they didn’t truly shape
   
• Accountability pushed downward while power sits upward
   

The World Economic Forum frequently highlights that leadership influence—not just authority—determines organisational resilience and trust.

When governance ignores influence, it governs the wrong people.

An accountability gap forms when:

• Power sits in one place
   
• Responsibility sits in another
   
• Oversight assumes alignment
   

These gaps are dangerous because:

• No one feels fully accountable
   
• Issues escalate unnoticed
   
• Blame becomes circular after failure
   

Good governance doesn’t eliminate informal power—it acknowledges and manages it.

This is where Governancepedia plays a critical role.

Governancepedia exists to help people:

• Understand how power actually operates
   
• Recognise informal authority structures
   
• Distinguish influence from accountability
   
• Learn governance concepts without legal complexity
   

Rather than focusing on enforcement, Governancepedia focuses on education and clarity—making governance understandable for professionals, leaders, and everyday stakeholders alike.

Modern governance is not about rigid hierarchies—it’s about accurate maps.

The strongest governance systems:

• Acknowledge informal influence
   
• Align authority with responsibility
   
• Make decision pathways visible
   
• Reduce reliance on assumptions
   

When organisations understand who truly holds power, they govern better—not harder.

In an era of rapid change, distributed teams, and complex stakeholders, power is more fluid than ever.

Ignoring that reality doesn’t make governance simpler—it makes it fragile.

That’s why Governancepedia matters:
it helps people understand who decides, who influences, and who is accountable—and why those distinctions shape outcomes.

Because good governance starts with a simple question:
Who actually holds power?