What is the main purpose of contract governance?

The main purpose of contract governance is to manage contracts in a compliant and effective manner. This governance framework establishes clear guidelines, procedures, and responsibilities for contract management, ensuring that contracts are executed in accordance with legal and regulatory requirements while also aligning with the strategic objectives of the organization. Effective contract governance helps to minimize risks, enhance accountability, and promote collaboration among stakeholders involved in the contract lifecycle.

Good contract governance involves oversight and monitoring of contract performance, ensuring that terms and conditions are met, and making adjustments as necessary to maintain compliance and effectiveness. This management approach is crucial in providing a structured way to track obligations, manage disputes, and optimize the performance of the contract throughout its duration.

While writing contracts correctly is important, it is only the first step, and eliminating the need for modifications is unrealistic in complex environments where changes are often necessary. Additionally, hiring external consultants may be beneficial in some cases, but it does not define the main goal of governance itself, which is centered around the ongoing management and oversight processes.