What is governance?

The governance of an organisation refers to the oversight and activities of a governing body (board, committee, trust or similar) who set the strategic direction and goals of the organisation. It involves a framework of values, processes and practices, which should direct the organisation and provide a benchmark to monitor progress and measure performance.

Through this framework, a governing body can make informed decisions that:

• help the organisation achieve its purpose and goals
• ensure the organisation operates ethically, and
• ensure all laws and regulations are complied with.

Governance is about working on your business rather than working in it. The separation between the two is about distinguishing between governance and management practices.

The difference between governance and management

Governance is about planning the framework for work and ensuring it gets done. Management focuses on organising and monitoring the work (while operations focuses on doing the work).

As far as possible, a governing body should steer clear from making managerial decisions and getting involved in day to day operations.

Governance in rail safety

The rail licence is ultimately the responsibility of the governing body of each licence holder.

When applying the principles of governance to rail safety, there is a focus on rail participants having a demonstrable plan and a proactive approach to ensuring all their rail activities are as safe as they can be. (See our So far as is reasonably practicable page for more information).

This means the governing body should be ensuring:

• the organisation’s safety case is adhered to, reviewed and maintained
• appropriate systems and processes are in place to support health and safety
• these systems and processes are reported on to provide evidence of compliance, and
• there is proper resourcing and verification of health and safety at the board table.

Managing the risks involved with the organisation’s rail activities is key to maintaining safety. The governing body is legally responsible for the compliance of the whole organisation as per section 66 of the Railways Act 2005(external link), so must be aware of all the laws and regulations that apply to them.

For more information, see our guidance on Risk management.

Governance beyond the board

While not all organisations are run by boards, it’s important to remember that all organisations must have governance. In the rail industry, we see the governance function carried out by:

• an owner
• trustees (eg when a rail operation is overseen by a trust)
• boards or committees (eg of an incorporated society or a company)
• sub-committees (eg when an overarching board delegates the governance of their rail activities to a rail committee), and/or
• senior leadership teams (eg when the rail activities at an industrial site are governed by site management).

Whenever there is a modified or informal arrangement it’s critical that you’re clear about who performs the organisation’s governance duties. The responsibility (and accountability) ultimately rests with the top tier, so having a clear reporting process helps satisfy all parties that things are safe and build the trust needed to make the arrangement work long term.