Forums › ACCA Forums › ACCA AA Audit and Assurance Forums › “those charged with governance”
- This topic has 5 replies, 6 voices, and was last updated 6 years ago by alkemist.
- AuthorPosts
- April 16, 2012 at 4:57 pm #52230
please distinguish the term “those charged with governance” with management.
April 17, 2012 at 4:51 am #96343In a company, those charged with governance would be the directors and the audit committee.
In a trust it would be the trustees.
In a school or hospital it would be the board of governors.
April 19, 2012 at 7:54 pm #96344AnonymousInactive- Topics: 8
- Replies: 199
- ☆☆☆
Well people who are charged in corporate governance thats simple! well for that you have know the full Corporate governance (formely UK Combined Code)
so We know that we have principles for Directors (both N.E.Ds and E.D)
we have rules for Chariman, CEO
also we have principles for Audit and Audit Committee! so its simple! people who are mentioned in corporate governance 🙂
it hope it makes sense now!
April 19, 2012 at 10:01 pm #96345AnonymousInactive- Topics: 0
- Replies: 27
- ☆
Those charged with governance (ie directors), provide the leadership and direction at the very top of the entity, they will set the overall strategies and direction. They are the stewards of the entity and whilst they may delegate some of their responsibilities to management they remain ultimately accountable for the perfomance of the entity.
Managements role is to perform the day to day running of the entity, to carry out the strategies, decisions and policies made by those charged with governance. Management have a high degree of responsibility for the operational aspects of the organisation and are accountable to those charged with governance.
There is a good document from the institute of directors which describes many of the differences between those charged with governance and management
http://www.iod.com/MainWebSite/Resources/Document/managers.pdfNovember 14, 2017 at 7:40 am #415667Hello sir,
This is still confusing for many students.
Are those charged with governance a “subset” of “Management”?
Is it right to say that?Is it such that within Management there are those charged with governance, or are they separate?
Thanks.
January 11, 2018 at 8:56 am #428373@gussy Those charged with governance (TCWG) are the board of directors. They have a fiduciary duty to conduct the affairs of the company for the benefit of the company and its shareholders. Roles of directors are established in companies law legislation. TCWG also includes as noted above Trustees of a Trust, Board of Governors of a School, or any other body which is the highest decision making body of an entity. TCWG formulate the strategic objectives (long term goals)
Management may or may not be TCWG. If the board is integrally involved in the day to day operations of the entity, that is providing operational direction, then TCWG are also considered management. In this context, think of a board consisting of say two members, one of whom is the managing director and the other the finance director. Both are executive roles in the company.
A subset of TCWG may also form management. In this case, think of say a 20 member board, where one member is the managing director (sometimes titles such as president or chief executive officer is used). This person is in charge of the day to day operations and along with other members of management (who are not a part of the board) are responsible for the operational direction of the company. In this case TCWG and management are two separate group.
Third is where there is a definite clear distinction, that is no member of the board (TCWG) are involved in the operations of the entity. Again the two groups are different.
Something to bear in mind, where the chairman of a board plays an active role in operational decisions, then TCWG are automatically management (one person with 2 roles). Think cases of executive chairman or dual roles such as Chairman and CEO; Chairman and President; Chairman and Managing Director.
- AuthorPosts
- You must be logged in to reply to this topic.