Enhancing governance and management arrangements
Good governance and management are essential components of running a successful firm, but they play distinct roles and sometimes can experience tensions.
Here are roles that we can help enhance, and some of the many tensions that can be relieved between governance and management:
Governance: Governance refers to the processes, policies, and regulations that govern a firms's operations. The purpose of governance is to ensure that the firm operates legally, ethically, and responsibly while protecting the interests of stakeholders such as shareholders, employees, customers, and suppliers.
Management: Management involves the day-to-day activities of running a firm, such as setting goals, making decisions, and overseeing operations. Management aims to ensure that the business is profitable, efficient, and effective in achieving its objectives.
Strategic vs. Operational Focus: Governance typically takes a more strategic and long-term view of the firm, while management tends to focus on the day-to-day operational activities. This can create tensions between the two, as management may prioritise short-term gains over long-term sustainability, while governance may prioritise compliance and risk management over growth and innovation.
Control vs. Autonomy: Governance is often responsible for setting policies and regulations that restrict management's autonomy. This can create tensions between governance and management, as management may feel constrained by governance's rules and regulations, while governance may feel that management is taking unnecessary risks or not following established protocols.
Transparency vs. Confidentiality: Governance often prioritises transparency and accountability, while management may prioritise confidentiality and protecting the firm's trade secrets and proprietary information. This can create tensions between the two, as governance may require management to disclose information that they consider sensitive or confidential, while management may feel that governance's demands are overly intrusive.
Approach Limited recognises that while there can be tensions between governance and management roles, it is important for both to work together to ensure that the firm operates legally, ethically, and effectively in achieving its objectives. As a result, one of our specialties is to help you support good governance and management practice. Please feel free to call us today for a chat how we may be of assitance.