Most executives believe they understand governance—until they’re asked to define it clearly. So how does governance really differ from strategy, management, and stewardship?
Recently, in a conversation with the chair of a nonprofit board, he made an observation that stayed with me: governance is one of those terms everyone uses, few define, and even fewer truly understand. Like “innovation,” it has become both essential and imprecise.
That imprecision matters.
In many boardrooms, governance is treated as an overlay—something that sits alongside strategy and execution. A set of policies. A compliance function. An obligation to be addressed once the real work is underway.
But governance is neither management nor strategy, and confusing it with either creates blind spots.
Strategy sets direction. It defines where the organization is going and the choices it makes to get there.
Management executes. It mobilizes people, processes, and resources to deliver results within agreed objectives.
Stewardship safeguards purpose and trust. It ensures the institution remains aligned with its mission and long-term responsibilities.
Governance plays a different role. It defines decision authority, establishes accountability, and provides oversight—especially when complexity, scale, or risk make informal judgment insufficient.
Governance exists because execution can move faster than collective judgment.
When governance is weak or ill-defined, familiar patterns emerge. Initiatives are approved without clarity on who owns outcomes once they are live. Well-intentioned decisions accumulate into fragmentation that no single leader is accountable for resolving. Risk frameworks remain static even as operating realities evolve.
In these situations, the issue is rarely a lack of talent or effort. More often, it is the absence of clear boundaries around who decides what, how tradeoffs are made, and how accountability is exercised over time.
This distinction is becoming harder to ignore as organizations embed more intelligence into their operations. Decisions that were once manual are now influenced by data, automation, vendors, and increasingly complex systems. Responsibility remains human, but decision pathways are more distributed—and less visible.
That shift does not invalidate existing governance structures. But it does test their assumptions.
A practical way to assess whether governance is functioning effectively is to ask a simple question:
If something goes materially wrong, can we clearly explain who was accountable, how the decision was made, and how oversight should adapt going forward?
If the answer is unclear, the issue is not execution.
It is governance.
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