Corporate governance and management - a blurred boundary?

A Twitter conversation reminded me that I have never got round to writing a coherent summary of the invited presentation (podcast here) that I gave at last year's MARG conference at LSE. I think I mentioned in passing that preparing it was a bit of a struggle because I found it difficult to make a clear connection between management accounting and corporate governance, the topic of the conference.

What I *really* wanted to say was that management accountants seem these days to be in search of a raison d'être and it looked as if they were now clutching at the notion of corporate governance. This was the conclusion I had come to when reading the CIMA/IFAC invention of enterprise governance, which classifies corporate governance as conformance and "business governance", whatever that is, as performance. (The model is derived without acknowledgement from the model developed by Bob Tricker, twenty years earlier: I probably should have made that point more strongly but Bob is in my slides.) But that might have been a bit rude, given the audience, so I watered it down a bit and discussed the relationship between governance and management, rather than management accounting.

And I probably talked a bit too much about the history of NEDs but the book was not long completed and I was in the middle of interviewing NEDs so they were at the forefront of my mind. But I do think that the restructure of corporate boards has had two consequences which have not so far been discussed by academics, regulators or practitioners.

Firstly, as boards have become smaller and predominantly non-executive, most executives have been squeezed out on to an executive board. The structure that has evolved is effectively two tier which is interesting, because objectors to the creation of audit committees at the time of the Cadbury Committee report argued that they would undermine the unitary board structure, which they viewed as a Very Bad Thing. (Difficult to know why this was seen as so important for UK companies, other than the fact that two tier boards were common in continental Europe...)  And the main link between the main board and the executive board is... the CEO. Now, wasn't the whole thrust of corporate governance focused originally on constraining the power of the CEO? Hm.

Secondly, these disenfranchised executives seem to be claiming links to corporate governance by coupling their functional areas with governance, in meaningless combinations - marketing governance, sales governance, IT governance, HR governance, even financial governance. On examination, all of these misuse the word governance: they are concerned with management.

Does this blurring of meaning matter? I still haven't made up my mind. What do you think?