ISYS90038 Chap.5 Introduction to Governance
Introduction to Governance
Week 5 opens the governance half of the subject with corporate governance: the processes, customs, policies, laws and institutions that shape how an organisation is directed and controlled. The board or council sets direction and carries legal responsibility, while the senior executive team implements strategy and governance across six key assets, of which information and ICT is one.
Financial and legal governance are well established; ICT governance is the newest and least mature of the three, which is why frameworks such as COBIT and ITIL exist.
The central distinction of the week is governance versus management: governance is doing the right thing, policy-oriented and concerned with direction, oversight and evaluation, while management is doing things right, process-oriented and concerned with day-to-day operation. The module gives six functions of governance and seven of management, and it stresses that the line moves with an organisation's size and maturity.
Governance policies, made by the governing body, differ from operational policies drafted by the top manager, and a governance policy document has a recognisable structure. Good governance, in the module's account, is short, general and outcome-oriented. The worked case judges a utility whose long policy manual hides weak direction and missing oversight.
What this chapter covers
- 01
Corporate governance: the players, the board, the senior executive team and six key assets
- 02
Financial, legal and ICT governance, and the behavioural and normative aspects
- 03
Governance versus management: doing the right thing and doing things right
- 04
Six functions of governance and seven functions of management
- 05
Governance policies versus operational policies, and the governance policy document
- 06
Good and poor governance: the World Bank's marks and the lecturer's brevity test
Worked example · free
Classify activities as governance or management
- 1(a) Governance: the council setting long-term direction is the strategic direction function.
- 1(b) Management: allocating staff to a project is program and project implementation within existing policy.
- 1(c) Governance: commissioning an independent review is the audit and evaluation function of the governing body.
Key terms
- Corporate governance
- The processes, customs, policies, laws and institutions that shape how an organisation is directed, administered and controlled.
- Senior executive team
- The chief executive and the other chiefs, who put strategy and governance into effect for each of the organisation's key assets.
- Key assets
- The six asset classes governance covers: human, financial, physical, intellectual property, information and ICT, and relationships.
- Governance policy
- A whole-of-organisation policy made by the governing body, stating vision, goals, standards and its own accountabilities.
- Operational policy
- A policy for daily administration, such as complaints or employment, drafted by the top manager and approved by the board.
- Normative governance
- The rules, from company law to listing requirements, that frame relationships among the people who govern.
Introduction to Governance FAQ
What is the difference between governance and management?
Governance sets direction, oversees and evaluates, deciding what should be done; management plans, builds and runs activities within that direction, deciding how. The module sums it up as doing the right thing versus doing things right.
Is the line between governance and management fixed?
No. The module says the boundary is not hard and fast: the same activity can fall on either side, and size and maturity move the line. Small organisations blend the roles; large ones separate them more sharply.
What does a governance policy document contain?
Vision and mission, the governance structure with roles and reporting, policies, strategies with objectives and measures, an index to current initiatives, reward and incentive schemes, and annual reports.
How long should good governance policy be?
Short and general. The lecturer's rule of thumb is five to ten pages of principles rather than exhaustive rules, so that policy can adapt without renegotiation and does not drift into management detail.
Exam move
Make two lists from memory, the six governance functions and the seven management functions, and test yourself by classifying activities from any case. For each classification, note the level at which the decision binds and who carries it out. Then practise judging governance quality against named criteria: brevity and generality, regular review, and whether direction, oversight and evaluation actually happen.
Keep the grey-area point ready, because questions on the governance and management boundary reward an answer that explains why the line moves.
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