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Difference Between Management and Governance

management_bookManagement vs Governance

Some say that there is no difference between management and governance. But the fact is that there are differences between management and governance.

Governance can be said to be representing the owners, or the interest group of people, who represent a firm, company or any institution. Governance represents the will of these interest groups who manage the company. Governance consists of a governing body, which directs the management on all aspects of a company. It is the governing body that oversees the overall function of an organization.

The governing body, on the other hand, appoints management personnel, whom are given the power to administer the organization. Management comes only second to the governing body, and they are bound to strive as per the wishes of the governing body.

Governance can be said to set the right policy and procedures for ensuring that things are done in a proper way. On the contrary, management is all about doing things in the proper way.

The responsibilities between governance and management also differ. The responsibilities of governance include choosing top executives, evaluating their performance, authorizing plans/commitments and evaluating the organization’s performance. On the other hand, management has the responsibility for managing and enhancing the overall performance of the organization. Management has the responsibility to implement the systems of governance.

While governance pertains to the vision of an organization, and translation of the vision into policy, management is all about making decisions for implementing the policies.

While board of directors form the core of governance, managers and executives form part of the management.

Governance relates to providing the right direction and leadership. Governance relates to managing the operations of an organisation. The governing body has only the role to oversee the functioning of the management, and it has no role in management.

Summary:

1. Governance can be said to be representing the owners, or the interest group of people, who represent a firm, company or any institution. The governing body, on the other hand, appoints management personnel.

2. While governance pertains to the vision of an organization, and translation of the vision into policy, management is all about making decisions for implementing the policies.

3. Management comes only second to the governing body, and they are bound to strive as per the wishes of the governing body.


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3 Comments

  1. In an otherwise well-written description of the difference between governance and management, the following sentence is jarring, ambiguous and potentially confusing:

    “Governance represents the will of these interest groups who manage the company.”

    You seem to be stating here that governance represents the will of management (“manage the company”). The result of your article makes it abundantly clear that this is not the case. Perhaps the sentence could be rewritten as

    “Governance represents the will of these interest groups who have a stake in the company.”

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