Engine droop governor and method

A machine (100) has an internal combustion engine (104) operating in response to a control signal provided by an engine governor (216). The engine (104) provides a torque output to a machine system providing a machine function. An electronic controller (214) determines a current operating state of the engine (104) and a torque utilization of the machine system, and compares the current operating state of the engine (104) with the torque utilization in an engine droop function (302). A change to an engine speed (308) setting of the engine (104) is instructed in response to a change in the torque signal. Such change is to increase the engine speed (308) setting when the torque utilization is increasing, and to decrease the engine speed (308) setting when the torque utilization is decreasing.