Management -v- Governance

Some areas of business seem to be confusing the concepts of organisational governance and effective management to the detriment of both processes. One of the important aspects of ‘good governance’ is to create the environment that allows ‘good management’ to be practiced and to require systems that ensure ‘good management’ is practiced at all levels of the organisation’s management, but governance and management are quite different processes undertaken by different groups of people.

As a basic starting point, Governance is the exclusive responsibility of the Board of Directors, or their equivalent, not management – the governing body (typically Directors) directs and governs; managers manage at various levels.

The three primary levels of involvement are:

  • Governance. The governing Board sets the organisation’s objectives, agrees the strategy to achieve the objectives, define policies and rules for the organisation, requires effective management systems, and also requires processes to be in place to ensure these are implemented by management and to provide effective oversight to the governing body. This is the exclusive non-transferable responsibility of the Board.
  • Executive management. The executive’s role is creating the organisation capable of achieving these requirements and providing input and advice to assist the governing body’s decision making processes. Developing an effective culture of openness and accountability is a core executive responsibility.
  • General management. Senior and operational management’s roles are to develop and maintain the systems and processes needed to make the organisation effective within the parameters set by the executive. This includes supporting middle and lower management so they can effectively manage the work needed to implement the strategy set by the Board.

For some reason, these different roles are being confused in some business domains, including IT and project management to the detriment of the organisation and the respective disciplines. When a group of managers start referring to ‘normal good management’ practices as ‘governance’, they simply create excuses for bad management practice.

A good example is a project steering committee failing to support a project manager by refusing to make a difficult decision. This lack of support can be defined in two different ways:

  • By claiming the committee is a governance body responsible for ‘governing’ the project, usually interpreted as making sure the project does not do ‘wrong things’, the imperative for a timely decision is removed or hidden, the requirement is no wrong doing which translates into not making a wrong decision. If the project fails as a consequence of the lack of decision, it is called a ‘project failure’ not a governance failure.
  • Change the description of the same steering committee to the management entity responsible for the overall creation of value within the organisation based on the work of the project they are overseeing, the situation changes. As the management group responsible for implementing and managing the overall Project Delivery Capability (PDC) needed by the organisation to achieve a positive ROI on its investment in the project, the same failure to make a decision can be seen to have a direct impact on the ROI the managers in the steering committee are personally responsible for achieving. This is a management failure and the managers in the steering committee are directly accountable for the delays caused to the project.

Similar issues to the project management obfuscation described above also attach to calling pragmatic and effective management of IT processes ‘governance’ – data security, backups and recovery capabilities, other IT functions and managing the projects needed to enhance IT are not IT governance issues, they are IT management responsibilities.

My personal view is that if the project and IT management practices described above are determined to be a ‘governance’ function, almost everything in management is ‘governance’, fortunately:

  • No one claims the processes used to make sure the accounts department pay the right people the right amount of money at the right time is a ‘governance’ process – it is seen to be a prudent accounting requirement.
  • Similarly no one claims the processes used by the stock department to fill orders with the right goods, and ship them to the right customers is ‘governance’; it is simply a customer service process.

IT and project management should be no different!

The art of good governance is for the Directors to ask the right questions of the executive and have sufficient skills to understand the answers. I do not know of a good resource to help in this respect for IT, however, a really useful (and free) guide to help Board’s ask the right questions of their executive about PDC has been published by the Association for Project Management in the UK, it can be downloaded from:

Once the Board starts asking the ‘right questions’ and sets a strategic framework my feeling is any executive manager worthy of his/her role will start taking appropriate actions and adapting their organisation. If they don’t the Board probably needs to start asking other questions about the suitability of the executive. However, changing the organisation to achieve effective PDC is a major change program in itself and will need time to be effective……

One short term solution that can be used to kick-start the cultural and organisational changes needed to move to an effective PDC is already in the hands of the governing body and executive. If the organisation cannot find a committed senior manager prepared to take personal responsibility for delivering the value promised by a project do not start the work! We know the lack of effective sponsorship is closely aligned to project failure, so it will be far cheaper and preserve shareholder value if projects without effective sponsors are not started. Conversely, if senior managers are responsible for the delivery of value from the projects they are sponsoring, the key people needed to create effective change in an organisation are already involved and have a vested interest in succeeding.

The important thing to remember is the realisation of value from effective benefits management is very much the end of a process. The overall capability to realise value from an investment in a project starts with selecting the right project to do for the right strategic reasons, then doing the work of the project effectively and efficiently before the organisation can implement the changes and generate value. The project manager is only responsible for the bit in the middle – the ‘doing the project right’, a steering committee, sponsor or other management entity is responsible for the beginning and end parts of the overall process as well as supporting the project team. Therefore PDC has to be seen as a general management responsibility.

The management concepts and framework needed to develop an effective PDC within an organisation have been discussed in earlier posts:

  • The concept of ‘project failure’ -v- ‘management failure’ is discussed in our post Project or Management Failures?.
  • Similarly, PDC and the organisational aspects of change have been discussed in length in a series of earlier posts, see:
  • An overview of the management framework needed to achieve effective PDC is in our White Paper: PDC Taxonomy – this White Paper is a conceptual framework not a methodology and is evolving, but should still be helpful in separating ‘governance’ from ‘management’.

These ideas are not new, work by the Boston Group in the 1990s reported in our latest blog, the PDC Value Proposition shows the significant increase in ROI when an effective project delivery capability level is achieved by an organisation.

The governance requirement is to ensure management accepts this responsibility and excel in creating value for the organisation.

4 responses to “Management -v- Governance

  1. As posted on LinkedIn…

    Lynda Bourne’s article echoes a song I have been singing since the publication of the Australian Standard for Governance of Information and Communication Technology, AS 8015.

    Unfortunately, when we developed AS 8015 we did not have a full understanding of how deeply attached the IT industry in particular is to the wrong ideas – ideas that are perpetuated today by IT organisations and frameworks such as COBIT, ITIL and Prince2. We published in AS 8015 a new and robust definition for governance of IT, distancing the concept from the more commonly referenced “IT Governance”.

    When it came to revising the Australian Standard to create the ISO version, we recognised the need for a clear and complementary definition of management. One issue that astounded me, as the Project Editor and wordsmith for the project, was the lack of suitable definitions of management in the marketplace. We ended up synthesising one!

    For the record, here’s what ISO 38500 says:

    1.6.3 Corporate governance of IT
    The system by which the current and future use of IT is directed and controlled.

    Corporate governance of IT involves evaluating and directing the use of IT to support the organization and monitoring this use to achieve plans. It includes the strategy and policies for using IT within an organization.

    1.6.9 Management
    The system of controls and processes required to achieve the strategic objectives set by the organisation’s governing body. Management is subject to the policy guidance and monitoring set through corporate governance.

    The ISO 38500 definition for governance of IT is modelled directly on the “Cadbury” definition. Cadbury in turn relied on ground breaking work done by US academics Berle and Means in the 1930’s as they explored the factors behind the great depression (factors that have been frighteningly paralleled in the past ten or so years). It is essential to understand that the key word in the definition is “system”, where the “system for governance” is dependent on the extensive management systems that management establishes at the request (implicit or explicit) of the board. Interestingly, nobody ever gets confused about the distinction between governance and management in respect of finance and HR – no self-respecting CFO would ever suggest that he or she does “finance governance”, although all of them would clearly understand how their work is a critical enabler to the board’s role of governing the organisation’s financial situation and use of financial resources.

    Any argument that “corporate governance” is only one kind of governance is a furphy. The expression “corporate governance” is not an adjective-noun combination, but a contraction of the more wordy, but explicit “governance of the corporation”. It is worth noting that globally known IT luminaries Weill, Ross and Broadbent identified six asset classes that boards address as part of their job in governing the corporation – these are financial, human resource, physical assets, intellectual assets, relationships and information.

    Lynda laments the lack of a good resource to help Directors to ask the right questions of the executive and have sufficient skills to understand the answers. At the risk of being seen as spending too much time promoting my own work, this is what high profile board advisor and director educator Julie Garland-McLellan said about my book, “Waltzing with the Elephant”: “This book puts the board firmly in control of the demand side of the IT equation. The language is precise, and hence quite dense, but very amenable to non-techno-savvy readers. The ideas are pure gold.” More reviews are available at

  2. Pingback: Governance from the perspective of Systems Theory | Mosaicproject’s Blog

  3. Pingback: Does organisational governance exist? | Stakeholder Management's Blog

  4. Pingback: Does organisational governance exist? | Mosaicproject's Blog

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