“Governance is about how your organisation is run - the structures and systems and understandings that enable you to make the right decisions and set the right course.” - (Modern governance and community groups 2007)
The governance role is different to the day to day management of an organisation. Governance is normally about the “big picture” responsibility. The governing body provides leadership and is responsible for setting broad directions; to ensure policies and plans are put in place by management and staff. The governing body is also required to ensure that the organisation complies with relevant legislation, awards, regulations and policies. Management refers to the “hands on” role of putting the broad directions into practice on a day-to-day basis within the organisation, and reporting progress to the governing body. Put simply, governance provides the structures and processes which enable an organisation to function properly and ethically. The governing body normally delegates management responsibility and authority to appropriate staff employed by the organisation. In large community organisations, where there are senior management positions, there is normally a clearly defined division of responsibility between staff. In some small organisations, with minimal staffing, members of the governing body sometimes assist in day to day management of the organisation. The governing body can take different forms in organisations including a board of directors or an executive. Its roles may include:
- Leadership and strategic direction - establishing a clear mission and vision; identifying guiding principles for the organisation and developing a strategic plan.
- Performance management - monitoring the progress of key programs.
- Financial management - acting with probity and integrity in developing business plans, administering and monitoring budgets and managing investments.
- Risk management- developing practices to assess and manage risk within the organisation.
Leadership selection - choosing appropriate staff such as the Chief Executive Officer and monitoring their performance.
Why is it important?
The application of sound governance contributes to an organisation’s success, reduces risk and increases confidence in the performance of the governing body.
What should good governing bodies do?
The governing body needs to be clear about its role, duties, responsibilities and the extent of its powers. It needs to be able to address questions such as:
- How are governing body members appointed?
- What are the roles, responsibilities and powers of governing body members?
- How will it report to members?
- What is the nature and relationship between the governing body and the Chief Executive Officer?
It also needs to be clear about what governance model is being used (examples include tripartite, stewardship, managerial, and political). The difference between models should be well understood by all members. The governing body should:
- Have the mix of skills required to fulfil its role.
- Demonstrate a clear understanding and commitment to the organisation’s vision, values and strategic directions.
- Understand and comply with relevant statutory obligations and legislation.
- Recognise when to seek external advice.
- Act with integrity and demonstrate ethical and responsible decision making.
- Be open to regular review and auditing of its operation.
- Be clear about who it is accountable to.
References
See the Service Excellence Program for more information.
Governance - Introduction, Paul Bullen, Management Alternative (Online) (2007) [Accessed 20.9.07]
Modern Governance and Community Groups - Help sheet (Online) (2007) [Accessed 6.11.07]
Supported Accommodation Assistance Program: Performance Management Framework (2005) Published by the Department for Families and Communities, Adelaide, S.Aust.
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