Peter Crow
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The distinction between governance and management

18/4/2017

 
Bob Tricker, named by Sir Adrian Cadbury as the godfather of corporate governance, is a hero of mine. While he did not 'invent' the term (Richard Eells did, in 1960), Tricker did do most the heavy lifting—helping all of us who followed understand what corporate governance is and, crucially, what it is not.
Sadly, some directors, consultants and academics have lost sight of Tricker's useful guidance; wandering off to propose all manner of definitions and descriptions. Thankfully, Tricker and a few others have continued to carry the baton, periodically reminding us what corporate governance actually is. Recently, Tricker put pen to paper again, writing this short piece to call out a common mistake: of conflating governance and management. That these two terms are used interchangeably has become a real problem. ​
A key insight from Tricker's most recent article is that corporate governance is what the board does. In contrast, management is what managers do. Sometimes, the two distinct roles (director and manager) are performed by the same person (an executive director, for example). In such cases, the person performing both roles must be diligent in the extreme, to correctly discern the particular hat they are wearing at a given moment in time. 
Thank you for the timely reminder Bob.

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