5.3. Governance
💡 First Principle: Governance is how an organization is directed and controlled — distinct from management, which executes — and it exists because someone has to set direction, evaluate performance, and ensure the organization stays aligned with its purpose, rather than just doing work.
Why care: an organization with great execution but no governance drifts — teams optimize locally, risks go unmanaged, and the whole loses alignment with its purpose. Governance is the steering, management is the driving. The mental model: a board of directors governs (sets direction, monitors); the executives and teams manage (carry it out). Both are needed; they are not the same.
⚠️ Common Misconception: That governance and management are the same thing because both involve authority. Governance directs and controls; management plans and executes within that direction. Conflating them is a frequent error.
