Types of leadership

Leadership and management oversee the corporate governance of an organisation.

Both are vital functions of a well governed business. But what is the difference between the two?

Types of leadership

Leadership and management oversee the corporate governance of an organisation. Both are vital functions of a well governed business. But what is the difference between the two?

Leadership vs management

Leadership and management are not the same thing. Organisations must have both.

While leadership can be displayed by anyone in an organisation who uses their talents to inspire others and make a difference, in the context of corporate governance it can be useful to look at it this way.

Leadership is the art of providing direction and guidance and motivating a group of people to work towards achieving a common goal. In an organisation, the leadership function is responsible for setting the direction and strategic goals of an organisation. In their capacity as board members, an organisation’s directors function as leaders of the organisation.

Management (or the executive) on the other hand, are responsible for the implementation of the tactical plans that will ensure value is delivered to the customer and the organisation’s strategic goals are reached.

The responsibility of board members as leaders

Board members can be seen as ‘leaders of leaders’, whose role it is oversee the strategic aspects of a business – without trying to run the business – while at the same time developing its management team.

This structure of corporate governance ensures everything done within the organisation is in alignment with board-set direction for that business. For this to work effectively, leaders and managers must have a grasp on the best-practice principles behind good governance.

While good governance is about more than just effective leadership, without visionary and accountable leaders, an organisation’s governance can quickly become ineffective and lacking in credibility.

Learn from the best

Leadership skills and qualities are critical to the effectiveness of an organisation’s governance.

The AICD regularly speak to a diverse range of business leaders, emerging leaders and business entrepreneurs to gain their perspectives and insights into the skills and attributes of successful leaders, how they see the business landscape evolving, and what effective governance looks like in different environments.

We trust that by tapping into the leadership experience of others, members can grow their own leadership capabilities and contribute to a more effective corporate governance environment in Australia.