The Difference between Governance and Management

Many non-profit Boards of Directors are working boards. They must attend to the functions of governance and management. Sometimes the distinction between the two gets lost.

Definitions

One way to think about the difference is to look at the roots of each word. The earliest reference to the notion of governance comes from the ancient Greek that means to “steer, pilot, guide”. It refers to a higher level of an organizational activity concerned with actions and processes that create stable practices and policies. These activities ensure the long term viability of an organization. Governance refers to the “process oriented” aspects of non-profit organizations.

For example, the questions that are included in this level of the discussion are:

• Where are we going?
• What do we want to achieve?
• How do we do things?
• What are the values that guide our actions?

On the other hand, management has a more immediate mandate. Its definition reflects the process of attending to and controlling things or people. It has an action oriented focus that determines how to use something. Management reflects the act of conducting or supervising the affairs of the organization.

In summary, governance of the organization is the structure, the framework, the shell of the organization that reflects how the organization operates. The management reflects the actions and decisions that are held with the overall governance structure of the organization.

Different Boards

Many small working boards must act as both governors and managers because they have small or have no staff. The structure of the organization through policies and procedures must be solid enough to guide decisions now and in the future. Management decisions regarding specific activities and programs must be sound and support the mission and the governance structure.

Larger organizations who have staff that perform the management functions have boards that can focus predominately on governance.

It is important for all boards to make the distinction between these two functions. Often the governance function is not addressed because the tasks associating with managing the organization take precedence. As a result, policies and principles are not created with intention and awareness but from a series of contradictory and unrelated management decisions that are not held within the overall governance.

Synergy

What can happen when the governance and the management of a non-profit work well together? There is:

• A greater awareness and capacity of boards to manage their role as governor and manager;
• The building of group harmony and alignment ;
• A better understanding and appreciation of colleagues is cultivated;
• A space is created to safely hold all perspectives and opinions towards peaceful resolution;
• The assembling story, insight and information inspires vision and action for the future;
• the building of creative solutions from the wisdom in the group.