We have published 3 papers recently that clarify and differentiate the functions of management and the functions of governance.
The widely accepted ‘functions of management’ developed by Henri Fayol and published in his 1916 book Administration Industrielle et Generale, are summarised in: WP1094 The Functions of Management. Fayol’s ‘functions of management are:
- M1 – To forecast and plan,
- M2 – To organise
- M3 – To command or direct (lead)
- M4 – To coordinate
- M5 – To control (French: contrôller: in the sense that a manager must receive feedback about a process in order to make necessary adjustments and must analyse the deviations.).
These functions are to be contrasted with my Six Functions of Governance:
- G1 – Determining the objectives of the organisation
- G2 – Determining the ethics of the organisation
- G3 – Creating the culture of the organisation
- G4 – Designing and implementing the governance framework for the organisation
- G5 – Ensuring accountability by management
- G6 – Ensuring compliance by the organisation
The mapping of the relationship between the functions of management and the functions of governance are set out below:
Mapping of the functions
A more focused discussion paper has been published today in WP1096 The Functions of Governance.
Governance is the action of governing an organisation by using and regulating influence to direct and control the actions and affairs of management and others. It is the exclusive responsibility of the ‘governing body’, the person, or group accountable for the performance and conformance of the organisation (in a commercial organisation, the Board of Directors).
But in many situations, particularly associated with the governance of project and programs, the governing of organisations is far from effective. The amount of time and effort devoted by the ‘governing body’ to compliance and accountability, and the amount of resources wasted by ineffective and ‘competing’ management groups, can be significantly reduced if the organisation’s objectives, ethics and culture are sound.
Six core functions of governance are defined to bridge the gap between the ‘objectives of governance’ defined by Cadbury and others and the practices of governance defined by organisations such as the AICD. Hopefully discussion around the core functions of governance sparked by these papers will encourage improved governance performance.