What is the function of compressor governor?

It puts the compressor into an unload state once cut out pressure is reached, and back into a loaded state once the cut in pressure is reached. Depending on the exact setup, a line from one of your air tanks will go to your governor. When the cut out pressure (between 120 and 135 psi) is reached, a valve opens in the governor to send air to to compressor and to the air drier. This closes the discharge valve on the compressor, sending it into an unloaded state, and also starts the air drier purge cycle.