Good Governance Practice PDF

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT
A Project of the State Government of Victoria
Bradfield Nyland Group for Department of Human Services
ACKNOWLEDGEMENTS Project Management: The IYV Secretariat, Department of Human Services Authors: Jane Bradfield and Julie Nyland, Bradfield Nyland Group Additional Research Assistance: Jane Bartier and Ann Shanley, Bartier Consultancy Lisa Thorpe Roy Bishop
The authors would like to thank the representatives from the participating organisations who gave up their time to take part in interviews, attend forums and read and comment on materials.
BRADFIELD NYLAND GROUP
ISBN: 0 7311 6144 0 State Government of Victoria, 2002
The following document is intended to be used for the production of a resource guide and materials to be published on a website. Suggested links are indicated in italic blue text.
CONTENTS 1. FRAMEWORK FOR GOOD GOVERNANCE PRACTICE .. 1
Overview .................................................................................1 Guide To Good Governance Practice ............................................3
2.
DEVELOPING GOOD GOVERNANCE PRACTICE....... 10
How To Use These Resources....................................................10 Tools And Materials .................................................................13 About Governance ................................................................13 The Charts ..........................................................................24 The Governance Guide ..........................................................28 Improvement Planner ...........................................................39
3. RESOURCES........................................................ 43
Advice And Information ...........................................................43 Management Materials And Kits ................................................46 Management Resources Online .................................................48
1. FRAMEWORK FOR GOOD GOVERNANCE PRACTICE

OVERVIEW To guide the organisation in benchmark principles and good practice indicators, it is useful to identify an overarching set of principles or elements. The statement below has been developed to reflect the key elements, at the broadest level, of good governance. It encompasses the basic concept of governance and the many good practice values that have been canvassed in the Good Governance Practice for Voluntary Committees of Management research project, and attempts to describe an effective committee of management. An effective committee of management should: be a skilled and viable group, based in its constituent community, with a clear understanding of its role and operation, which works in the best interests of the organisation on behalf of its members and stakeholders, conducting its business in an efficient and effective manner. The framework for good governance practice has five elements that draw on this definition: 1. A skilled and viable group based in its constituent community 2. A clear understanding of the role and operation of the committee of management 3. Work, within external requirements, in the best interests of the organisation 4. Work on behalf of the members and stakeholders of the organisation 5. Conduct business in an efficient and effective manner
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GUIDE TO GOOD GOVERNANCE PRACTICE: OVERVIEW Benchmark Principles
Elements
1. A skilled and viable group based in its constituent community Validity of governance Viability of the committee of management Skilled and representative structure/s Coherence of vision and goals Clarity of roles, responsibilities and duties Responsible delegation of authority Agreed set of values Consistent processes and procedures
Link to Element 1
2. A clear understanding of the role and operation of the committee of management
Link to Element 2
3. Work, within external requirements, in the best interests of the organisation
Link to Element 3
4. Work on behalf of the members and stakeholders of the organisation
Link to Element 4
5: Conduct business in an efficient and effective manner
Link to Element 5
Vision and future direction setting Maintenance of appropriate controls Application of effective risk management Sound financial planning and management Sound human resource management Compliance with laws and obligations Productive working relationships Positive representation of the organisation Validity of aims and goals Accountability to members and other stakeholders Balance of competing interests Quality services, activities or products Useful and appropriate structures Efficient meeting processes Effective communication and information sharing Informed individual participation and committee cohesion Action implementation and monitoring Review of performance
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GUIDE TO GOOD GOVERNANCE PRACTICE
Element 1.: A skilled and viable group based in its constituent community
Benchmark Principles
1.1 Validity of governance The committee of management represents an identifiable community or group of people with common interests or concerns, and can demonstrate how this constituency informs and authorises the committee of management to act on its behalf.
General Indicators of Good Practice

1.1.1 Criteria for membership of the organisation relates to the aims and goals of the organisation 1.1.2 The membership has the capacity to approve the appointment of members of the committee of management, call the committee to account, and remove some or all of its members from office 1.1.3 Membership records are kept up to date and valid 1.1.4 Members of the organisation are informed of their role and rights 1.2.1 Positions do not remain vacant for extended periods 1.2.2 The majority of meetings attract at least a quorum 1.2.3 Committee members are active and interested, and meet the majority of their participation requirements 1.2.4 Succession planning procedures are documented and implemented 1.3.1 All required skills are identified, and appropriate individuals recruited 1.3.2 Procedures for maintaining the skills of committee members are implemented 1.3.3 Diverse interests of stakeholders and constituents are identified and represented
1.2
Viability of the committee of management The committee of management is able to maintain its membership, and sufficient active participation of members to enable business to be conducted. 1.3 Skilled and representative structure/s The composition of the committee of management and any sub committees, working parties, advisory groups or consultative forums, ensure the full range of skills needed, and provide effective representation of stakeholder and constituent interests. 1.4 Coherence of vision and goals A shared vision exists within the committee of management that reflects the interests of the membership, and the stated aims of the organisation. At the same time, diversity of opinion and debate are supported.
1.4.1 A coherent vision and set of goals can be easily confirmed and is documented
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Element 2: A clear understanding of the role and operation of the committee of management
1.1 Clarity of roles, responsibilities and duties The roles and responsibilities of members of the organisation, members of the committee of management, members of any sub committees or other structures, and staff (paid and unpaid) are clearly documented, and processes exist to ensure these roles are understood and adhered to.
General Practice
Indicators
of
Good
2.1.1 Roles and responsibilities are documented in a form that is easy for all participants to understand 2.1.2 The role of the committee of management is consistent with, and reflects, the basic requirements of incorporation and/or general fiduciary duty 2.1.3 All committee members can describe their own role, the role of the committee, the role of members of the organisation, and of other relevant bodies or people
1.2
Responsible delegation of authority The committee of management reviews all areas of decision making, and documents who will have the authority to make decisions. The committee may delegate its authority to make decisions in specified areas to sub committees, or other structures, or to specified staff positions. 1.3 Agreed set of values The committee of management identifies and agrees on a set of management and operational values that are consistent with goals or philosophies agreed on by the membership, and/or documented in the constitution of the organisation. These values guide the work of the committee and any staff, and the business of the organisation. 1.4 Consistent processes and procedures The work of the committee of management is guided by processes and procedures that are followed consistently, and reviewed periodically.
2.2.1 Delegations of authority are clearly documented 2.2.2 Delegations of authority are reviewed with regard to potential risk
1.3.1 A documented statement of values exists 1.3.2 All policies and procedures conform to the agreed values 1.3.3 The way in which members, committee members and staff participate in the organisation is in accordance with the agreed values
1.4.1 The committee of management has a documented set of processes and procedures that it follows 2.4.2 All committee members are informed and understand the procedures and processes they are required to follow
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Element 3: Work, within external requirements, in the best interests of the organisation
3.1 Vision and future direction setting The committee of management ensures that the organisation has a viable future direction that is consistent with the aims of the organisation and the interests of its members and constituent community. 3.2 Maintenance of appropriate controls The committee implements a control framework of internal accountability, monitoring and reporting, and is able to take action when required.

3.1.1 A review and analysis of the current and future environment, and the broad goals of the organisation are conducted periodically 3.1.2 Reviewed goals for the short and longer term are agreed on by the committee of management and communicated to relevant stakeholders 3.1.3 An achievable plan of action for pursuing agreed goals is approved by the committee of management 3.2.1 The committee of management establishes clear expectations of its own work 3.2.2 Clear expectations are established for all work delegated by the committee of management to others 3.2.3 Limits of authority and action are established 3.2.4 Procedures for reporting and monitoring are documented and followed 3.2.5 Procedures for identifying and responding to problems are documented 3.3.1 Areas of risk are identified and prioritised 3.3.2 Strategies to prevent risks occurring are implemented 3.3.3 Responsibilities for risk management are assigned 3.3.4 Risk management is monitored, reviewed and assessed
3.3
Application of effective risk management The organisation has in place a plan for identifying, reviewing and managing incidents that may pose a risk to the organisation. 3.4 Sound financial planning and management
The financial viability of the organisation is safeguarded by well informed financial planning, careful financial management, and proper record keeping.
3.4.1 Account and record keeping complies with accepted bookkeeping or accounting practices 3.4.2 An annual financial plan is approved by the committee of management 3.4.3 Compliance with the financial plan is monitored reliably 3.4.5 Financial decisions of the committee of management are informed by identifiable sources of expertise
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3.5 Sound human resource management The organisation ensures that it complies with industrial requirements and good human resource management practice

Where staff employed: and/or volunteers are being
3.5.1 The organisation has documented procedures for recruitment, job descriptions and contracts, and staff development 3.5.2 Compliance with industrial regulations is monitored 3.5.3 Procedures for performance monitoring and discipline are documented and followed 3.6.1 The organisation has conducted a legal audit 3.6.2 Contract compliance is monitored 3.6.3 The application of any professional or community standards, or implementation of any undertaking by the organisation, is monitored
3.6
Compliance with laws and obligations The organisation operates within the law, complies with all legal requirements, meets its contractual obligations, and meets its obligations under any undertaking it agrees or subscribes to. 3.7 Productive working relationships Relationships within the organisation, between the committee of management and staff (paid or unpaid), committee of management and other parts of the organisation, and between the organisation and the community, general public and other agencies, are developed in ways that are productive for the organisation, its members and its constituent community. 3.8 Positive representation of the organisation The profile of the organisation is promoted in a way that assists the organisations capacity to achieve its aims and represent its constituent communitys interests effectively.
3.7.1 The committee of management has documented its values and procedures with regard to maintaining good relationships within the organisation 3.7.2 The committee of management is well regarded by other personnel of the organisation, other parts of the organisation and by members of the organisation 3.7.3 Relationships with external agencies and individuals are reviewed and assessed 3.7.4 Roles and responsibilities for the development and maintenance of these relationships is clearly defined and documented 3.8.1 The organisation is regarded as effectively representing the interests of its constituent community by members of its constituent community and other stakeholders 3.8.2 The organisation is regarded as being well run, and committed to its aims by other agencies 3.8.3 Committee of management members do not criticise the organisation publicly
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Element 4: Work on behalf of the members and stakeholders of the organisation
4.1 Validity of aims and goals The aims, goals and plans of the organisation are supported by the members of the organisation and by the constituent community.
General Practice
Indicators
of
Good
4.1.1 Methods for consulting with stakeholders and gathering input and feedback are in place 4.1.2 Stakeholders confirm their support for the organisations aims and goals
4.2
Accountability to members and other stakeholders The committee of management ensures that the organisation is accountable to its members, constituent community and other stakeholders.
4.2.1 Information about the organisations plans, achievements, activities and financial performance are made available to members, constituent community and other stakeholders 4.2.2 Members, constituent community and other stakeholders have clear procedures for raising issues and concerns about the performance of the organisation
4.3
Balance of competing interests The committee of management recognises different views and interests within the membership of the organisation and within the constituent community, and ensures that this diversity of interest is reflected by the committee of management in its consideration of issues. 4.4 Quality services, activities or products
4.3.1 Diverse views and interests can be identified 4.3.2 Debate and discussion is encouraged
The committee of management ensures that the services, activities or products of the organisation that are provided or produced are of a high quality and designed to meet the needs of those using them.
4.4.1 Reports or feedback from service users, clients or members indicate satisfaction with the quality of services, activities or products 4.4.2 Procedures are in place for reviewing and planning improvements to services, activities or products
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Element 5: Conduct business in an efficient and effective manner.
5.1 Useful and appropriate structures The committee makes use of sub committees, working groups, advisory groups and consultative forums where appropriate and useful to supporting the work of the committee. 5.2 Efficient meeting processes Meeting processes are designed to work through the business of the committee in an efficient fashion, without compromising the participation of committee members or the effectiveness of the business conducted.

5.1.1 Any sub committee or similar structure has a clearly defined purpose, set of tasks and life span 5.1.2 The performance and contribution of sub committees or similar structures is reviewed periodically
5.2.2 Committee meeting frequency, processes and procedures comply with the organisations constitution 5.2.3 An agreed process for setting the agenda is documented 5.2.4 All relevant information and minutes of the previous meeting are made available to committee members in advance of the meeting 5.2.5 All scheduled business is completed 5.2.6 All committee members are enabled to participate equally 5.2.7 Accurate and appropriate minutes are taken and circulated to all committee members
5.3
Effective communication and information sharing Committee members have access to all relevant information equally, in formats that enable them to understand the content. Communication within the committee and between the committee members and other parts of the organisation is conducted according to agreed principles, including the principles of transparency, inclusiveness and honesty.
5.3.1 Committee members have all the information they require to have informed input and make decisions 5.3.2 Clear procedures and policies exist for communication flow within the organisation
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5.4 Informed individual participation and committee cohesion The committee of management is able to openly discuss and debate issues, while retaining a cooperative approach to problem solving and decision making. Individuals make informed comment and actively question. Morale, active participation and good humour are maintained. 5.5 Action implementation and monitoring The committee ensures that plans are implemented and monitors the outcomes.
5.4.1 All committee members participate in discussion 5.4.2 Committee members regularly ask questions
5.5.1 Responsibility for implementing action decided by the committee is allocated and time frames set 5.5.2 Completion and outcomes of agreed action is reported to the committee 5.5.3 Tasks are reviewed and reallocated when necessary
5.6 Review of performance The committee of management reviews its own operation and performance periodically and takes action to improve its operation where required.
5.6.1 A procedure is documented for the committees regular review of performance and operation 5.6.2 The committee takes action to address any deficiencies identified
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2. DEVELOPING GOOD GOVERNANCE PRACTICE

These guides and tools have been designed to assist voluntary committees of management to review their governance structure and design a good governance practice model that is tailored to their organisation.
HOW TO USE THESE RESOURCES Reviewing governance practices and establishing a set of effective practices for your organisation does require some time to be set aside to conduct the review and discuss a new approach. The following steps have been divided into activities that can be conducted in 1 hour sessions and incorporated into a committee meeting. Alternatively, the process can be conducted in a single workshop style session, taking approximately 6 hours. Step 1 Understanding governance Find out about the basic aspects of good practice in governance, and ensure that committee members understand what is involved. Activity: Committee members should read About Governance as preparation for the review. Time needed: 1 hour About Governance
Link to About Governance
Refer to
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Step 2
Designing the governance structure Set the basic framework for the role of the committee, and for how it will monitor and control how the organisation is operated. Activity: Committee members work as group through the three charts (the participation framework, the delegations chart, and the monitoring chart, deciding the type of involvement they require, the delegation of decisions making they will allow, and the information they will need to monitor effectively. Time needed: 1 hour 1.5 hours
Refer to
The Charts
Link to The Charts
Step 3 Reviewing and designing effective governance practices Work through the benchmark principles, and identify good governance practices for the organisation. Activity: The committee reviews each section of the benchmark principles and indicators pack (Governance Guide), and assesses the extent to which they meet the indicators. Time: Can be split into 2 sessions total time 2.5 hours 11
Refer to
The Governance Guide

Link to The Governance Guide
Step 4
Planning improvement Identify areas for improvement and development, based on Step 3, and plan how, and when changes will be made. Activity: As a group, the committee reviews the areas where current practice does not meet the indicators, and plans strategies to address this, using the improvement planner Time: 1 hour
Refer to
Improvement Planner
Link to Improvement Planner
Step 5 Identifying resources Consult the resources lists, and locate the assistance or information needed. Activity: As a follow up to the planning exercise, individual committee members should be delegated the responsibility of gathering resources that can assist the committee in the work it has decided to do. Resources List
Link to Resources
Refer to
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TOOLS AND MATERIALS The following tools and materials are contained in this section:
About Governance: for use in Step 1 of the review process The Charts: for use in Step 2 of the review process The Governance Guide: for use in Step 3 of the review process The Improvement Planner: for use in Step 4 of the review process
About Governance There are six Information Sheets in the About Governance set: Information Sheet 1: The Good Governance Practice Research Project Information Sheet 2: Information Sheet 3: Information Sheet 4: Information Sheet 5: Information Sheet 6: Voluntary Committees of Management What is Governance? What do Voluntary Management Do? Issues and Challenges What is Good Governance? Committees of
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ABOUT GOVERNANCE
Information Sheet 1
THE GOOD GOVERNANCE PRACTICE RESEARCH PROJECT

The Good Governance Practice for Voluntary Committees of Management was commissioned by the State Government of Victoria as part of its participation in the International Year Of Volunteers 2001 (IYV). The project was managed by the IYV Secretariat, located in the Victorian Department of Human Services, and conducted by consultants Bradfield Nyland Group. Volunteer participation is an important community activity that provides benefits to the community through a broad range of services provided directly by volunteers. Volunteering is also essential to community building, and, through the involvement of volunteers in the running and management of community organisations, to the existence of not for profit organisations: Participation on voluntary committees of management is the second highest activity area of volunteering within Australia (following fundraising). The majority of not for profit, or community organisations are totally dependent on volunteers to form the committees of management required by their incorporation legislation. Voluntary committees of management sustain thousands of not for profit, community sector organisations in Victoria.
The Good Governance Practice Research Project was designed to research issues relevant to voluntary committees of management across the spectrum of government portfolios, and to: Draw together current thinking about governance for voluntary committees of management Explore the range of issues facing voluntary committees of management in different types of organisations Identify good governance principles, practices and models
Assess barriers and opportunities to developing good practice For more information (link to p1 of the Research Report) 14
ABOUT GOVERNANCE
Information Sheet 2
VOLUNTARY COMMITTEES OF MANAGEMENT

All incorporated bodies have in common: Owners: The person or people who have the ultimate authority (in a not for profit organisation, these are the members). Governors: The person or people who have the responsibility for the governance of the organisation (in a not for profit organisation, this is the voluntary committee of management).
Not for profit organisations are similar to other organisations in many ways, but different in the following: Voluntary committees of management: composed of volunteers who, unlike the boards of public companies, are not paid. The purpose and values of the organisation: This is often referred to as the mission of the organisation, and not for profit organisations are regarded as being more mission driven than for profit organisations. The non distribution constraint: prevents not for profit organisations from distributing surplus funds or monetary benefits to the members of the organisation. The role of the shareholders (members): The largest proportion of not for profit organisations work to benefit a broader community rather than just their immediate members.
Recent ABS data estimates 1,187 not for profit organisations operating in the community services field in Victoria (ABS(b), 2001). In addition to these organisations, there are many not for profit organisations operating in the areas of health, education and training, arts, tourism, environment and heritage, and a very large body of organisations operating in the area of sport and recreation. For more information (link to p3 of the Research Report) 15
ABOUT GOVERNANCE
Information Sheet 3
WHAT IS GOVERNANCE?
Governance, or corporate governance, is the process by which an organisation is given direction, its activities monitored and controlled and its personnel held to account. It is literally the government of an organisation.
The legal responsibilities of a voluntary committee of management Members of the committee need to understand their responsibilities and perform their duties to the best of their abilities. Members are required to operate with due care and diligence, in the best interests of the organisation Members of the committee need to ensure that: The aims and objectives of the organisation are pursued The rules of the organisation (its constitution) are followed The business of the organisation is conducted honestly and with integrity - The organisation complies with all laws and any contractual obligations - The organisation remains financially solvent
The management committee is responsible for ensuring that these things happen but not necessarily for getting them done.
The governance role
The actual role of the committee of management is to:
Lead: Providing leadership, forward planning, and guidance to the organisation, particularly in terms of developing a strategic culture for the organisation.
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Care: Custodianship or stewardship of the organisation, with the responsibility of shepherding and safekeeping the organisation on behalf of its members or constituents, particularly in terms of ensuring that the organisation pursues its stated purpose and remains viable. Control: Providing monitoring and oversight of the management, maintaining authority and accountability, ensuring good management practices and appropriate checks and balances.
The governance duties
Members of a committee of management have a basic set of duties. They need to: Understand and fulfil their fiduciary duty Establish and review accountability Establish priorities Take key decisions Monitor the implementation of plans and policies Establish and monitor a risk management plan To perform these duties members of management committees need to: Know about their roles and responsibilities Be committed to the organisation Be able to read and understand the financial and other reports they receive Know what laws affect the organisation Be aware of all contracts that are signed Know and understand the constitution of the organisation Have ways of making sure each other are behaving honestly The office bearers should: Be clear about their roles Be prepared to carry the responsibility Have the skills needed For more information (link to p13 of the Research Report) 17
ABOUT GOVERNANCE
Information Sheet 4
WHAT DO VOLUNTARY COMMITTEES OF MANAGEMENT DO?

Ideally, committees of management provide the big picture and set policy and future direction, rather than become involved in day to day operations. The following tasks and activities committees of management: are common for voluntary
Deciding the allocation of responsibilities and delegating appropriate authority Setting strategy and policy, and longer term strategic planning with an annual review Monitoring organisational performance against a strategic plan Risk management Policy development Keeping up with current demands and foreseeing new trends, facilitating growth and evolution Managing funds and ensuring the organisation is financially viable and assets are protected Meeting community expectations and knowing the needs of membership Maintaining focus, integrity and quality of service Overseeing legal functions and responsibilities Recruiting, assisting and working collaboratively with the CEO, or other staff Lobbying and representing members interests with government and decision makers Networking and making links with other organisations
Although the most common model of corporate governance recommends that committees of management remain hands off, many not for profit organisations with limited resources find that their committees of management have to take up responsibility for aspects of the management, administration, service or product delivery or support tasks such as fundraising. In assisting the full range of voluntary committees of management to provide effective governance, it is important to ensure that a diversity of models of governance are identified and promoted. For more information (link to p15 of the Research Report) 18
ABOUT GOVERNANCE ISSUES AND CHALLENGES
Information Sheet 5
The issues and challenges for voluntary committees of management in performing their governance role are:
The structure of governance, and the role of committees of management
For small to medium sized organisations, and organisations without a chief executive officer, there is a tendency for far greater blurring of the strategic and operational (or governance and management) roles to occur. The main challenges to developing a strategic and goal setting role appear to be: Resources, particularly staff to delegate to Time to spend on strategic issues Lack of information or procedures on how to become more strategic Expectations and beliefs about what the committee should do.
The operational aspects of maintaining committees Recruiting new committee members, maintaining the committee and ensuring that committee members are familiar with their responsibilities Conducting effective committee meetings, dealing with the actual workload and paperwork, and finding time to deal with issues adequately Securing sufficient funds for the organisation, and planning with limited resources Responding to specific problems, particularly industrial or legal issues.
The impact of changing environments, and the perception that there are continually increasing complexities in the job of voluntary committees of management. 19
Adapting governance models
Governance is a concept that has been derived from and developed for large, corporate organisations. Recommended practices from its modern corporate form are generally well suited to most large not for profit organisations, and medium sized organisations where paid staff provide a senior level of management and administration. They are not so well suited for many other organisations, however. In particular: Small organisations: Governance practices for small organisations need to be scaled to match the complexity of their business (which can range), and the resources that are available. Aboriginal organisations: Governance practices for Aboriginal organisation need to be developed in ways that are culturally appropriate. Culturally or politically specific organisations, and faith communities: Organisations with particular cultural or political foundations need to identify the values and practices that are important to them to retain, and design governance practices that accommodate these values and practices. For more information (link to p17 of the Research Report)
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ABOUT GOVERNANCE WHAT IS GOOD GOVERNANCE?
Information Sheet 6
What the law requires

Essentially, good governance as required by incorporation legislation consists of: Acting in the interests of the organisation (fiduciary duty) Being honest and careful (diligent) Keeping informed about what the organisation is doing Keeping proper financial records Ensuring debts can be paid Declaring any personal interest that might conflict with the interests of the organisation or duties as a member of the committee
The advice of the Australian Securities and Investments Commission (ASIC) is that company directors should: Be fully up to date on what the company is doing Find out the impact on the companys business performance of any proposal (particularly one involving financial commitment) Seek outside professional advice when there is insufficient information to make a properly informed decision Question management and staff about how the business is going Take an active part in the directors meetings (i.e. not rubber stamp)
(ASIC, The Watchdogs Guide, 2002)
The legal parameters, and the above points, provide a sound minimum standard for basic governance. However, researchers, writers and practitioners have many other good governance practices to add to this minimum standard. The Australian National Audit Office (ANAO) has endorsed the policy of the OECD on diversity in governance, proposing that the general principles of good governance must be adjusted to reflect the specific circumstances and needs of individual organisations. Therefore, what might constitute specific good governance practices for different organisations may vary.
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What organisations value

Organisations taking part in the Victorian good governance practice research project identified the following as good governance practices: Composition and continuity of the committee Cohesion, with committee members having agreed vision for the organisation, values and understanding of their role Clarity about roles, responsibilities and tasks, including documented job or role descriptions Confidence amongst and between committee members Code of ethical conduct Consensus, with healthy debate Clear understanding of operations, strategy and financial responsibilities, and agreement on priorities Strong links to the constituent community Strong structure, and integrated management system Good relationships between the CEO and the committee, with clear procedures for reporting and accountability Clear processes and ways to review activity Accountability to the community, stakeholders and internally to staff, volunteers and members Ongoing policy development on issues Meetings kept short and well organised Good documentation Contributing to entrepreneurial activity and maintaining links and networks Maintaining a positive and well regarded profile
What academic and research literature says

The discussions covered in the existing literature can be loosely grouped under the following approaches: Control framework: A number of approaches are focused on mechanisms for establishing accountability, monitoring, and effective risk management. Visionary leadership: This describes approaches that focus on the responsibility of the committee of management to provide the strategic direction and maintain the values and mission of the organisation.
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Behaving well: This approach focuses on codes of practice and ethical conduct, emphasising the responsibility of the committee members to conduct themselves honestly and diligently. Roles and responsibilities: Exploration of how the committee of management should structure its role and its relationship with staff is the most common focus in the literature of the not for profit sector.
What practice guides and resources suggest

Across a range of resources surveyed, the following common areas were identified: Coherent aims and goals, or mission Roles and responsibilities Strategic direction setting and planning Risk management and accountability Financial management Committee processes (including recruiting members, maintaining the committee and meeting procedures) Legal and statutory responsibilities External relationships (including attracting sponsorship and stakeholder satisfaction) Review and monitoring of performance Human resource management (including recruitment of CEO) Service delivery Ethical standards and codes of conduct.
For more information (link to p29 of the Research Report)
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The Charts This section contains three charts, which are formats for: Discussing and deciding the level of involvement the committee of management needs to have in various aspects of the organisations operation (participation framework). Deciding and documenting the delegation of authority within the organisation (delegations chart). Documenting the information that the committee of management requires to ensure effective monitoring and control (monitoring chart)
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THE PARTICIPATION FRAMEWORK
Use the format below to guide discussions about the level of involvement the committee will have in various aspects of the organisations operation. Follow the questions for discussion in italics
Making decisions What does the committee need to .. Services or Activities General Organisational Matters Finances make decisions about Setting broad directions/ policy .. only be involved in at the broad policy level Monitoring & receiving reports check has happened according to plan Having input/being consulted .. have a say in, give advice about, or be consulted on Carrying out tasks actually do themselves
Staffing
For example.
Fee levels
Criteria and processes for taking on clients
Level of services use by clients
Types of activities and programs for clients
Promote the service to other agencies they are in contact with
Bradfield Nyland Group, 1997
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THE DELEGATIONS CHART
The delegations chart is a quick and easy way to decide the allocation of specific responsibilities and decision making authority. Use the format to decide and record key policies and procedures related to roles and responsibilities. Example of a completed section of the delegations chart:
AREA (e.g. Financial Management, Client Service, Staffing) FUNCTION This describes the particular item that decisions need to be made about Example: Annual Budget PREPARATION This identifies who will prepare any documents or gather any information needed PROCESS This describes any process of discussion, or checking that the item will go through APPROVAL This identifies who can approve the item
Example: Bookkeeper
Example: Bookkeeper discusses with Treasurer & staff
Example: Board of Management
Bradfield Nyland Group, 1997
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THE MONITORING CHART

The monitoring chart is one way of identifying the main parameters that staff are required to operate within, and identifying how the committee will monitor these. The monitoring chart should be used in conjunction with other accountability tools such as a forward plan, the budget and a risk management plan or strategy.
Expectations Identify what the committee expects of the operations and performance of various aspects of the organisation: For example: - the management committee itself - the staff - the volunteers - the management of the finances - the delivery of services and activities - the administrative systems Example 1: The committee expects all staff to follow the agreed code of conduct Example 2: The committee expects that the organisation will operate within its agreed budget Bradfield Nyland Group, 1998 What the committee needs to know Identify what type of information will tell the committee that these expectations are being met How often Frequency of reports on each item
Reports from the Coordinator of any breaches of the code of conduct Regular reports on year to date income and expenditure as compared to the budget
As they occur
Monthly
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The Governance Guide Overview of governance: Elements

1. A skilled and viable group based in its constituent community 2. A clear understanding of the role and operation of the committee of management 3. Work, within external requirements, in the best interests of the organisation
the
elements
and
benchmark
principles
for
good
Validity of governance Viability of the committee of management Skilled and representative structure/s Coherence of vision and goals Clarity of roles, responsibilities and duties Responsible delegation of authority Agreed set of values Consistent processes and procedures Vision and future direction setting Maintenance of appropriate controls Application of effective risk management Sound financial planning and management Sound human resource management Compliance with laws and obligations Productive working relationships Positive representation of the organisation Validity of aims and goals Accountability to members and other stakeholders Balance of competing interests Quality services, activities or products Useful and appropriate structures Efficient meeting processes Effective communication and information sharing Informed individual participation and committee cohesion Action implementation and monitoring Review of performance
4. Work on behalf of the members and stakeholders of the organisation 5: Conduct business in an efficient and effective manner.
How to use the benchmarks and indicators pack: The following section contains charts for each element of the good governance guide, with the indicators for each benchmark principle. Work through each section, placing a tick in the Indicator met column wherever the organisation can demonstrate that it has a practice in place that meets the required indicator. Use the section Own indicators to add any additional indicators that the organisation wants to apply.
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Element 1.: A skilled and viable group based in its constituent community
Validity of governance The committee of management represents an identifiable community or group of people with common interests or concerns, and can demonstrate how this constituency informs and authorises the committee of management to act on its behalf.

Criteria for membership of the organisation relates to the aims and goals of the organisation The membership has the capacity to approve the appointment of members of the committee of management, call the committee to account, and remove some or all of its members from office Membership records are kept up to date and valid Members of the organisation are informed of their role and rights
Indicator met a
Own indicators Viability of the committee of management The committee of management is able to maintain its membership, and sufficient active participation of members to enable business to be conducted.
Positions do not remain vacant for extended periods The majority of meetings attract at least a quorum Committee members are active and interested, and meet the majority of their participation requirements Succession planning procedures are documented and implemented
Own indicators Skilled and representative structure/s The composition of the committee of management and any sub committees, working parties, advisory groups or consultative forums, ensure the full range of skills needed, and provide effective representation of stakeholder and constituent interests. Own indicators
All required skills are identified, and appropriate individuals recruited Procedures for maintaining the skills of committee members are implemented Diverse interests of stakeholders and constituents are identified and represented
29
Element 1.: A skilled and viable group based in its constituent community contd
Coherence of vision and goals A shared vision exists within the committee of management that reflects the interests of the membership, and the stated aims of the organisation. At the same time, diversity of opinion and debate are supported. Own indicators

A coherent vision and set of goals can be easily confirmed and is documented
Indicator met a
30
Element 2: A clear understanding of the role and operation of the committee of management
Clarity of roles, responsibilities and duties The roles and responsibilities of members of the organisation, members of the committee of management, members of any sub committees or other structures, and staff (paid and unpaid) are clearly documented, and processes exist to ensure these roles are understood and adhered to. Own indicators Responsible delegation of authority The committee of management reviews all areas of decision making, and documents who will have the authority to make decisions. The committee may delegate its authority to make decisions in specified areas to sub committees, or other structures, or to specified staff positions. Own indicators Agreed set of values The committee of management identifies and agrees on a set of management and operational values that are consistent with goals or philosophies agreed on by the membership, and/or documented in the constitution of the organisation. These values guide the organisation. Own indicators
General Indicators of Good Indicator Practice met a

Roles and responsibilities are documented in a form that is easy for all participants to understand The role of the committee of management is consistent with, and reflects, the basic requirements of incorporation and/or general fiduciary duty All committee members can describe their own role, the role of the committee, the role of members of the organisation, and of other relevant bodies or people
Delegations of authority are clearly documented Delegations of authority are reviewed with regard to potential risk
A documented statement of values exists All policies and procedures conform to the agreed values The way in which members, committee members and staff participate in the organisation is in accordance with the agreed values
31
Element 2: A clear understanding of the role and operation of the committee of management contd
Consistent processes and procedures The work of the committee of management is guided by processes and procedures that are followed consistently, and reviewed periodically. Own indicators

The committee of management has a documented set of processes and procedures that it follows All committee members are informed and understand the procedures and processes they are required to follow
32
Element 3: Work, within external requirements, in the best interests of the organisation
Vision and future direction setting The committee of management ensures that the organisation has a viable future direction that is consistent with the aims of the organisation and the interests of its members and constituent community.

A review and analysis of the current and future environment, and the broad goals of the organisation are conducted periodically Reviewed goals for the short and longer term are agreed on by the committee of management and communicated to relevant stakeholders An achievable plan of action for pursuing agreed goals is approved by the committee of management
Own indicators Maintenance of appropriate controls The committee implements a control framework of internal accountability, monitoring and reporting, and is able to take action when required.
The committee of management establishes clear expectations of its own work Clear expectations are established for all work delegated by the committee of management to others Limits of authority and action are established Procedures for reporting and monitoring are documented and followed Procedures for identifying and responding to problems are documented
Own indicators Application of effective risk management The organisation has in place a plan for identifying, reviewing and managing incidents that may pose a risk to the organisation. Own indicators
Areas of risk are identified and prioritised Strategies to prevent risks occurring are implemented Responsibilities for risk management are assigned Risk management is monitored, reviewed and assessed
33
Element 3: Work, within external requirements, in the best interests of the organisation contd
Sound financial and management planning

Account and record keeping complies with accepted bookkeeping or accounting practices An annual financial plan is approved by the committee of management Compliance with the financial plan is monitored reliably Financial decisions of the committee of management are informed by identifiable sources of expertise
The financial viability of the organisation is safeguarded by well informed financial planning, careful financial management, and proper record keeping. Own indicators Sound human resource management The organisation ensures that it complies with industrial requirements and good human resource management practice
Where staff and/or volunteers are being employed: The organisation has documented procedures for recruitment, job descriptions and contracts, and staff development Compliance with industrial regulations is monitored Procedures for performance monitoring and discipline are documented and followed
Own indicators
Compliance with laws and obligations The organisation operates within the law, complies with all legal requirements, meets its contractual obligations, and meets its obligations under any undertaking it agrees or subscribes to. Own indicators
The organisation has conducted a legal audit Contract compliance is monitored The application of any professional or community standards, or implementation of any undertaking by the organisation, is monitored
34
Element 3: Work, within external requirements, in the best interests of the organisation contd
Productive working relationships Relationships within the organisation, between the committee of management and staff (paid or unpaid), committee of management and other parts of the organisation, and between the organisation and the community, general public and other agencies, are developed in ways that are productive for the organisation, its members and its constituent community.

The committee of management has documented its values and procedures with regard to maintaining good relationships within the organisation The committee of management is well regarded by other personnel of the organisation, other parts of the organisation and by members of the organisation Relationships with external agencies and individuals are reviewed and assessed Roles and responsibilities for the development and maintenance of these relationships is clearly defined and documented
Own indicators Positive representation of the organisation The profile of the organisation is promoted in a way that assists the organisations capacity to achieve its aims and represent its constituent communitys interests effectively.
The organisation is regarded as effectively representing the interests of its constituent community by members of its constituent community and other stakeholders The organisation is regarded as being well run, and committed to its aims by other agencies Committee of management members do not criticise the organisation publicly
Own indicators
35
Element 4: Work on behalf of the members and stakeholders of the organisation
Validity of aims and goals The aims, goals and plans of the organisation are supported by the members of the organisation and by the constituent community. Own indicators Accountability to members and other stakeholders The committee of management ensures that the organisation is accountable to its members, constituent community and other stakeholders.

Methods for consulting with stakeholders and gathering input and feedback are in place Stakeholders confirm their support for the organisations aims and goals
Indicator met a
Information about the organisations plans, achievements, activities and financial performance are made available to members, constituent community and other stakeholders Members, constituent community and other stakeholders have clear procedures for raising issues and concerns about the performance of the organisation
Own indicators Balance of competing interests The committee recognises different interests within the membership and the community, and ensures that this diversity is reflected its consideration of issues. Own indicators Quality services, activities or products The committee ensures that the services, activities or products of the organisation that are provided or produced are of a high quality and designed to meet the needs of those using them. Own indicators
Diverse views and interests can be identified Debate and discussion is encouraged
Reports or feedback from service users, clients or members indicate satisfaction with the quality of services, activities or products Procedures are in place for reviewing and planning improvements to services, activities or products
36
Element 5: Conduct business in an efficient and effective manner.
Useful and appropriate structures The committee makes use of sub committees, working groups, advisory groups and consultative forums where appropriate and useful to supporting its work. Own indicators Efficient meeting processes Meeting processes are designed to work through the business of the committee in an efficient fashion, without compromising the participation of committee members or the effectiveness of the business conducted.

Any sub committee or similar structure has a clearly defined purpose, set of tasks and life span The performance and contribution of sub committees or similar structures is reviewed periodically
Indicator met a
Committee meeting frequency, processes and procedures comply with the organisations constitution An agreed process for setting the agenda is documented All relevant information and minutes of the previous meeting are made available to committee members in advance of the meeting All scheduled business is completed All committee members are enabled to participate equally Accurate and appropriate minutes are taken and circulated to all committee members
Own indicators Effective communication and information sharing Committee members have access to all relevant information equally, in formats that enable them to understand the content. Communication is conducted according to agreed principles, including the principles of transparency, inclusiveness and honesty. Own indicators
Committee members have all the information they require to have informed input and make decisions Clear procedures and policies exist for communication flow within the organisation
37
Element 5: Conduct business in an efficient and effective manner contd.
Informed individual participation and committee cohesion The committee of management is able to openly discuss and debate issues, while retaining a cooperative approach to problem solving and decision making. Individuals make informed comment and actively question. Morale, active participation and good humour are maintained. Own indicators Action implementation and monitoring The committee ensures that plans are implemented and monitors the outcomes.
Indicator met a
All committee members participate in discussion Committee members regularly ask questions
Responsibility for implementing action decided by the committee is allocated and time frames set Completion and outcomes of agreed action is reported to the committee Tasks are reviewed and reallocated when necessary
Own indicators Review of performance The committee of management reviews its own operation and performance periodically and takes action to improve its operation where required. Own indicators
A procedure is documented for the committees regular review of performance and operation The committee takes action to address any deficiencies identified
38
Improvement Planner The planner on the following page should be used in conjunction with the review of practice against the good governance indicators (Step 3). For each area: Identify any indicators that were not met by current practices Discuss what needs to be done in order to improve practice and meet the indicator/s Plan when this will be done by, and who will take responsibility for ensuring that it happens
39
IMPROVEMENT PLANNER
Element 1: A skilled and viable group based in its constituent community Indicators not met Strategies to meet Time indicators frame Who
Validity of governance
Viability of the committee of management Skilled and representative structure/s
Coherence of vision and goals
Element 2: A clear understanding of the role and operation of the committee of management Indicators not met Strategies to meet Time indicators frame Who
Clarity of roles, responsibilities and duties Responsible delegation of authority
Agreed set of values
Consistent processes and procedures 40

Element 3: Work, within external requirements, in the best interests of the organisation Indicators not met Strategies to meet Time indicators frame Who
Vision and future direction setting
Maintenance of appropriate controls
Application of effective risk management Sound financial planning and management Sound human resource management
Compliance with laws and obligations
Productive working relationships
Positive representation of the organisation
41
Element 4: Work on behalf of the members and stakeholders of the organisation Indicators not met Strategies to meet Time indicators frame Who
Validity of aims and goals
Accountability to members and other stakeholders Balance of competing interests
Quality services, activities or products
Element 5: Conduct business in an efficient and effective manner Indicators not met Strategies to meet Time indicators frame Who
Useful and appropriate structures
Efficient meeting processes
Effective communication and information sharing Informed individual participation and committee cohesion Action implementation and monitoring Review of performance 42
RESOURCES
ADVICE AND INFORMATION
General
Information Victoria All government information available through: http://www.bookshop.vic.gov.au/infovic/anonymous/home.as p Peak bodies: most community sector organisations have a peak body that provides representation, coordination and information to organisations in its field. Some peak bodies are able to provide advice, training or resource materials to voluntary committees of management. The Quality Improvement Council: Fee for service assessment and accreditation for health and community services organisations Contact: Quality Improvement & Community Services Accreditation (QICSA) Inc. http://www.latrobe.edu.au/qic Ph: (03) 9479 1878/9179 3702 C/- Australian Institute for Primary Care, Faculty of Health Sciences, La Trobe University, Victoria 3086 Australia
Incorporation
Companies (Corporations Act 2001): Australian Securities and Investments Commission http://www.asic.gov.au Company information, fees, payments and complying with the law: Phone (03) 5177 3988. Cooperatives (Cooperatives Act 1996) and Associations (Associations Incorporation Act 1981): Consumer and Business Affairs Victoria http://www.consumer.vic.gov.au Consumer Affairs Helpline: 1300 55 81 81 Address: Level 2, 452 Flinders Street, Melbourne 3000 Or GPO Box 123A, Melbourne 3001
Aboriginal Corporations: Registrar of Aboriginal Corporations. http://www.orac.gov.au ph: toll free on 1800 622 431 The Office of the Registrar also provides training on a fee for service basis
Employment
Awards and industrial legislation: Federal awards and legislation: Department of Employment and Workplace Relations http://www.dewrsb.gov.au Phone: (02) 6121 6000 Industrial Relations Victoria http://www.irv.vic.gov.au Tel: (03) 9651 5560 Level 9, 1 Macarthur Street, Melbourne 3002 Employer organisations: Victorian Employers Chamber (VECCI) Ph: (03) 8662 5333 http://www.vecci.org.au of Commerce and Industry
Victorian Hospitals Industrial Association Ph: (03) 9520 1800 http://www.vhia.com.au Jobs Australia National employer body with special focus on community services industry Ph: 1800-060-098 http://www.ja.com.au/csirservice/
Occupational Health and Safety: Victorian WorkCover Authority Ph: 03 9641 1444, 1800 136 089 http://www.workcover.vic.gov.au/
Taxation
Federal: Australian Taxation Office ATO Tax Reform Infoline 132 478 (for legal requirements) http://www.ato.gov.au Council of Social Services GST Project Resources Available from NSW COSS: 02 9211 2599, info@ncoss.org.au Section of website devoted to GST: http://www.ncoss.org.au/hot/index.html State: State Revenue Office of Victoria Ph: 132 161 email: sro@sro.vic.gov.au http://www.sro.vic.gov.au/
Legal information
Australian Legal Information Institute (AUSTLII): http://www.austlii.edu.au/ for all Australian laws and regulations. Public Interest Law Clearing House (PILCH) Level 1, 550 Lonsdale Street, Melbourne 3000 Ph:(03)9225 6680 E-mail: pilch@vicbar.com.au
Fundraising
General: Australian Charities Eagle Communications help@auscharity.org http://www.auscharity.org/ Trust (03) 9704 7581,
Fundraising Institute of Australia Ph: (02) 9411 6644 email info@fia.org.au, http://www.fia.org.au/ Professional body for fundraisers Ourcommunity.com.au Fundraising and several other fact sheets listed under Advice and Learning http://www.ourcommunity.com.au Victorian regulation: New law applies from 1 January 2002: Vic Fundraising Appeals Act 1998 (amended): http://www.dms.dpc.vic.gov.au (Department of Premier and Cabinet website) Vic Gaming No.2 Act 1997 http://www.dms.dpc.vic.gov.au/ (go to 1997 Acts) Department of Justice, Consumer and Business Affairs Victoria Toll free: 1800 177 905 Fundraising: 1300 558 181 http://www.justice.vic.gov.au/ Victorian Casino and Gaming Authority, Office of Gambling Regulation http://www.gambling.vcga.vic.gov.au/ Ph: (03) 9651 3333 Raffles, lotteries or other activities authorised under the Gaming No. 2 Act 1997 need permits from the Victorian Casino and Gaming Authority MANAGEMENT MATERIALS AND KITS
Australian
Sports Commission: Publications include a set of how to guides known by some people as the volunteer improvement program. For sale, $24 for the full set or less for individual guides http://www.ausport.gov.au/pubcat
Commonwealth Department of Family and Community Services

Corporate Governance: Handbook for the Board Prepared by Walter & Turnbull, 2001 Available from the Department: ph: 1300 653 227
Council
of Intellectual Disability Agencies (CIDA): offers practical publications that are suitable for a wide range of not for profit organisations The Craft of Managing training resource kit prepared by Jean Roberts ($60, reductions for CIDA members or for multiple orders) Management Practice Standards for Non Government Committees and Boards of Management Governance practice guide with self assessment checklists, prepared by Chris Fyffe & Jeffrey McCubbery, Grimwood P/L ($10, reductions for CIDA members) Ph: (03) 8415 0155
Enterprise
& Career Education Foundation (ECEF): Set of simple guides for committees Management matters: Guidelines for effective school-industry partnership committees Ph: 1800 626 839
Leslie Gevers Community Management Services:

Managing a Community Organisation: A handbook for Managers, Coordinators and Management Committee Members http://www.lgcms.com.au/
Meerilinga
$99
Training College: Series of six learning guides for sale
Governance: Its not a board game Ph: (08) 9218 8022 http://www.meerilinga.org.au/
VCOSS: offer several management resources

Level 6, 130 Little Collins St., Melbourne, 3000 Ph: (03) 9654 5050 email vcoss@vcoss.org.au http://www.vcoss.org.au
MANAGEMENT RESOURCES ONLINE Australian:
Boardworks International: provides consultancy services, but has

some board resources free online http://boardworksinternational.com
Civic
Chamber: offers subscriptions to regular electronic newsletters, one focusing on fundraising, and the other more general information and news for nonprofit associations, also offers services related to insurance, vehicle leasing and financial services http://civic-chamber.com.au
managementsupportonline:
due to open in March 2003, a subscription based service offering an advice and problem solving support service, information and resources, and online training programs. http://www.managementsupportonline.com.au (after March 2003) Governance & Management Centre: offers a range of governance and management related publications for sale, and subscription based board information newsletter http://www.governance.com.au
Nonprofit
ourcommunity.com.au: offers subscriptions to regular grants and

scholarships newsletters and range of free information online. Focus is grants and fundraising, but also carries management related information and an online donations system. http://wwwourcommunity.com.au
International: The sites selected below all offer a range of resources and guides to governance and building better boards. Most are American, and there is limited free material.
NCVO
http://www.ncvo-vol.org.uk
NCNB National Center for Non Profit Boards

http://www.ncnb.org/
IOG Institute on Governance

http://www.iog.ca/about/themes-nonprofit.html
Center for Nonprofit Management

http://www.cnm.org/
Nonprofit Resource Center

http://www.nonprofitcenter.org/
Carver Governance (John Carvers site)

http://policygovernance.com/
Nonprofit Genie
http://www.genie.org/
Board Caf
http://www.boardcafe.org
Nonprofit Risk Management Center

http://www.nonprofitrisk.org
BoardSource
http://www.boardsource.org
Peter F Drucker Foundation

http://www.pfdf.org/
Open University Business School: runs online fee paying courses,

but also has listings and abstracts of governance related research papers http://www3.open.ac.uk/oubs
A Project of the State Government of Victoria
ACKNOWLEDGEMENTS Project Management: The IYV Secretariat, Department of Human Services Authors: Jane Bradfield and Julie Nyland, Bradfield Nyland Group Additional Research Assistance: Jane Bartier and Ann Shanley, Bartier Consultancy Lisa Thorpe Roy Bishop
The authors would like to thank the representatives from the participating organisations who gave up their time to take part in interviews, attend forums and read and comment on materials.
BRADFIELD NYLAND GROUP
ISBN: 0 7311 6144 0 State Government of Victoria, 2002
CONTENTS 1. THE GOOD GOVERNANCE PRACTICE RESEARCH PROJECT...................................................................1

1.1 1.2 1.3 Background ................................................................. 1 Volunteer Participation .................................................. 1 Purpose Of The Project.................................................. 2
2.
VOLUNTARY COMMITTEES OF MANAGEMENT ..........3
2.1 Not For Profit Organisations And Voluntary Committees Of Management........................................................................ 3 2.2 Participating Organisations ............................................ 5 2.2.1 Profile of organisations ............................................ 5 2.2.2 Characteristics ....................................................... 8
3. THE WORK OF VOLUNTARY COMMITTEES OF MANAGEMENT ......................................................... 13

3.1 3.2 What Is Governance?.................................................. 13 What Do Voluntary Committees Of Management Do?....... 15
4. THE EXPERIENCE OF VOLUNTARY COMMITTEES OF MANAGEMENT ......................................................... 17

4.1 Introduction .............................................................. 17 4.2 The Structure Of Governance: What Should The Committee Do? 18 4.3 The Operational Aspects: How Should The Committee Conduct Its Business? ......................................................... 19 4.3.1 Recruiting and maintaining the committee................ 20 4.3.2 Conducting effective committee meetings ................ 22 4.3.3 Securing sufficient funds........................................ 23 4.3.4 Responding to specific problems ............................. 24 4.4 THE IMPACT OF CHANGING ENVIRONMENTS: How Can Committees Keep Up? ......................................................... 25 4.5 GOVERNANCE ISSUES FOR PARTICULAR ORGANISATIONAL TYPES ............................................................................... 26 4.5.1 Governance issues for small organisations................ 26 4.5.2 Governance issues for Aboriginal organisations ......... 26 4.5.3 Governance issues for culturally or politically specific organisations, and faith communities.................................. 28
5.
WHAT IS GOOD GOVERNANCE?......................... 29
5.1 Introduction .............................................................. 29 5.2 The Size That Fits: Diversity Of Governance Models ........ 30 5.3 Perspectives On Good Governance................................ 31 5.3.1 Victorian not for profit organisations: what they value 31 5.3.2 Academic and research literature ............................ 33 5.3.3 Practice guides and resources................................. 35 5.4 Benchmark Principles: A Common Framework ................ 35
6.
REFERENCES .................................................... 37
APPENDIX 1..41 APPENDIX 2 .43
1. THE GOOD PROJECT

1.1 BACKGROUND
GOVERNANCE
PRACTICE
RESEARCH
The Good Governance Practice for Voluntary Committees of Management Research Project is an initiative of the State Government of Victoria, as part of its participation in the International Year Of Volunteers 2001 (IYV). The State Government of Victoria adopted the theme of Celebrate, Encourage and Strengthen to focus Victorian IYV initiatives. As part of its objective to strengthen volunteer participation, the Government commissioned a research project on good governance practice for voluntary committees of management. The project was managed by the IYV Secretariat, located in the Victorian Department of Human Services, and conducted by consultants Bradfield Nyland Group.
1.2 VOLUNTEER PARTICIPATION Volunteer participation is an important community activity that provides benefits to the community through a broad range of services provided directly by volunteers. Volunteering is also essential to the development of social capital and community building, and, through the involvement of volunteers in the running and management of community organisations, to the existence of not for profit organisations. Victorian people volunteer at a rate comparable to the Australian average in metropolitan areas (28.9%), and at a slighter higher rate than the Australian average in rural areas (43.8% compared to an Australian average of 38.1%). It is estimated that this provides nearly 200 million hours of volunteer labour in Victoria annually.1 Participation on voluntary committees of management is the second highest activity area of volunteering within Australia (following fundraising). An average of 45.4% of Australian volunteers are involved in committees of management, which translates in Victoria to over a half a million people at any one time taking part in the governance and management of not for profit organisations.
1
ABS (a), 2000
1
The majority of not for profit, or community organisations are totally dependent on volunteers to form the committees of management required by their incorporation legislation. Voluntary committees of management sustain literally thousands of not for profit, community sector organisations in Victoria. These organisations operate in a wide range of fields including health, welfare, child and family services, education, sports and recreation, environment, tourism, heritage and numerous other fields. An important element in supporting the work of volunteer organisations is the support of voluntary committees of management in their governance role. One way of providing that support is the identification of good practice in governance and management, and the provision of information and tools that assist voluntary committees of management in performing their role. 1.3 PURPOSE OF THE PROJECT The Good Governance Practice Research Project was designed to research issues relevant to voluntary committees of management across the spectrum of government portfolios. The project aimed to: Draw together current thinking about governance for voluntary committees of management Explore the range of issues facing voluntary committees of management in different types of organisations Identify good governance principles, practices and models
and Assess barriers and opportunities to developing good practice.
The project conducted a review of relevant research literature, existing training materials and formal resources, and undertook consultation with a range of Victorian community organisations.2
2
Refer to Attachment 1 for a list of organisations that took part in consultations and background research, and Attachment 2 for a copy of the interview schedule.
2
2. VOLUNTARY COMMITTEES OF MANAGEMENT

2.1 NOT FOR PROFIT ORGANISATIONS COMMITTEES OF MANAGEMENT AND VOLUNTARY
To understand the role of voluntary committees of management, it is useful to understand how incorporated organisations operate, and the similarities and differences between not for profit organisations and other types of incorporated organisations. At the most general level, there are four types of formal (incorporated) organisations: small private companies, large public companies, governments, and not for profit organisations3. Under Australian law, all organisations that become incorporated (that is, take on a legal identity as an organisation) are required to have a designated person or group of people (directors) who take responsibility for that organisation. Whilst not usually considered to be an organisation, governments (at Federal, State and Local levels), have a similar basic construction to other incorporated bodies. All incorporated bodies have in common: 2 Owners: The person or people who have the ultimate authority the owner of a small private company, the shareholders of a large public company, the electorate of a government, and the members of a not for profit organisation. Governors: The person or people who have the responsibility for the governance of the organisation in small private companies, the owner/s is also usually the director/s. In all other organisations, this responsibility is usually delegated by the owners to a smaller group the board of directors of a large public company, the parliament or Council of government bodies, or the voluntary committee of management of a not for profit organisation.
Voluntary committees of management are the governance bodies for not for profit organisations. They come in many shapes and
3
Not for profit organisations are also known as organisations.
non profit or community
3
sizes, and with a variety of names. The most common terms used for voluntary committees of management are: Management committees Directors, or boards of directors Collectives Trustees Councils
This report uses the term committee or committee of management to refer to all of these forms. Voluntary committees of management are unique to not for profit organisations for the single fact that they are composed of volunteers who, unlike the boards of public companies, are not paid. Other than this, however, the basic requirements of voluntary committees of management mirror those of for profit organisations. Although not for profit organisations share a similar basic incorporation structure with for profit companies, there are three fundamental differences, which impact on the governance role of voluntary committees of management: The purpose and values of the organisation: This is often referred to as the mission of the organisation, and not for profit organisations are regarded as being more mission driven than for profit organisations. In part, this is because for profit organisations are believed to have a simpler and common mission to maximise profits for shareholders. Not for profit organisations tend to have varied, and often less measurable purposes, and the place of beliefs and values is often at the public forefront of their concerns and activities (Industry Commission, 1995: 5). The non distribution constraint: The non distribution constraint (Hansmann, cited in McGregor-Lowndes, 1992) is fundamental to all not for profit incorporation in Australia (and elsewhere). This, to a certain extent defines not for profit organisations legally, and prevents them from distributing surplus funds or monetary benefits to the members of the organisation. It is for this reason, that, even if organisations had the funds available, organisations cannot pay their boards of directors, and committees of management remain voluntary.
4
The role of the shareholders: The equivalent of shareholders in for profit companies are the members of a not for profit organisation. Although members may make a financial contribution through membership fees (and in the case of organisations incorporated as cooperatives, are actually treated as shareholders), their contribution to sustaining the organisation is far more in their willingness to support the organisations existence through making up the membership, and selecting a committee to provide governance. Although, they cannot receive a direct monetary benefit, members of an organisation can benefit from the services and activities provided by the organisation. Most not for profit organisations also work for a constituency beyond their members, however, with very few organisations being strictly member benefit organisations. The largest proportion of not for profit organisations work to benefit a broader community rather than just their immediate shareholders. For these organisations, the shareholders (members) represent the interests of a broader constituent community.
2.2 PARTICIPATING ORGANISATIONS 2.2.1 Profile of organisations
The not for profit sector is one of the more difficult sectors to gather reliable statistics for, as the Australian Bureau of Statistics rarely classifies organisations according to their incorporation status, and there are no nationally consistent reporting methods (Industry Commission, 1995: 18). Organisations are more commonly identified by their industry or activity areas. This can provide general estimates, as some industries are dominated by not for profit organisations, and the community services industry in particular is dominated by not for profit organisations receiving government funding. Victorian Research conducted into the community services industry in 1992 identified 1,934 non government organisations operating in the community services field. Of these, 41.1% were established between 1960 1979, and 43% since 1980 (15.8% prior to 1960)(Community Services Victoria, 1992: 1). Recent ABS data indicates a total of 2,083 organisations operating in the community 5
services field, 1,187 of which were identifiable as not for profit organisations (ABS(b), 2001). In addition to organisations operating in the community services industry, there are many not for profit organisations operating in the areas of health, education and training, arts, tourism, environment and heritage, and a very large body of organisations operating in the area of sport and recreation. The organisations chosen to participate in the background research for this project were selected to represent as wide a range of fields of activity as possible, and a range of organisational types. The organisations participating in the background research ranged from very large to very small, included local, regional and peak organisations, and included organisations operating in the fields of sport and recreation, arts, welfare, youth, education, disability, health, emergency services and the environment. About one third of the sample was located in rural areas of Victoria, and four of the organisations were Aboriginal community organisations. Representatives of 49 organisations took part in the background research, with all but one of these organisations having a voluntary committee of management. 30 of these organisations took part in interviews conducted with one or more Board/Committee members, or, in some instances with Executive Officers. A further 19 organisations were represented at one of the three forums held or provided feedback on the outline and content of the report. Of the 49 organisations taking part, 37 provided information about their particular organisations. Appendix 1 (p95) lists the organisations that took part. The following tables show the profiles of the 37 organisations that provided information about themselves: Participating Organisations (a): Length of operation N=37 Yrs since formation 1-5 years 4 5 10 3 10 20 4 20 50 15 50 100 6 > 100 1 Information not provided 4 6
Participating Organisations (b): Incorporation type N = 37 Type of incorporation Association 23 Company 4 Co-op 3 Other* 7 * Other forms of incorporation included:
Aboriginal Corporations, incorporated under the Commonwealth Aboriginal Councils and Associations Act Committees of Management, established by the Department of Natural Resources and Environment Statutory Trusts or Authorities, including those established under the Cemeteries Act Committees of Management operating under the constitution of church based organisations (usually incorporated under individual pieces of legislation)
Participating Organisations (c): Committee terminology N= 37 Term used for committee Board 19 Committee of Management 6 Management Committee 2 Trust 1 Information not provided 9 The sample also contained a number of Community Health Centres, mostly incorporated as Associations, but which have the recruitment processes, composition and operation of their boards specified in guidelines from the Department of Human Services4. Participating Organisations (d): Operating budget N=37 Operating budget <5000 >5000-20,000 >20,000-100,000 >100,000-500,000 > 500,000-3m > 3m - 10m >10m Information not provided
4
2 4 4 5 10 5 2 5
Guidelines for the Governance, Election and Appointment of Members of Boards of Declared Community Health Centres, May 2001
7
Participating Organisations (e): Staffing N=37 Staff establishment No paid staff Part-time paid staff only Paid staff 1 5 Paid staff 6 10 Paid staff 11 20 Paid staff >20 Use of volunteers (other than committee of management) 7 4 10 3 3 8 17
Participating Organisations (f): Committee size N=37 No of positions on committee 56 79 10 12 > 12 Information not provided 4 10 10 2 11
About two thirds of organisations (20) had only one service outlet or organisational office, with the remaining third (11 organisations) having between 2 and 5 outlets. 2.2.2 Characteristics
The organisations taking part in the research represented a wide range of organisational types, generally matching the age, incorporation type and size of the available profiles of not for profit organisations (Lyons and Nyland, 1995). Because the sample is quite small, however, it cannot be taken that the characteristics of this group are indicative of the sector in general. Age: The majority of organisations were less than fifty years old, with the majority of these having been established prior to the mid 1980s. Other research indicates that the majority of those established between 1950 and 1980 would probably have been established in the late 1970s (Community Services Victoria, 1992). 8
Type of incorporation: Close to 62% of the sample were incorporated as Associations. As the Victorian Associations Act was not proclaimed until 1981, this means that several organisations that were established before this date may have remained unincorporated for some time, or changed incorporation status when the Associations Act became available. Size of organisation: The combination of operating budget and staff establishment provides an indication of size, and this sample shows that close to one third of the organisations are quite small (less than $100,000 operating budget, and staffing establishment of less than 5 staff). Committee profile: Most (54%) had committees of less than ten positions, and only two organisations had relatively large committees (16 and 22 positions). Even though there was a high proportion of Associations and small organisations (which are more likely to use the term management committee), the majority (68%) of the participating organisations used the term board to describe their voluntary committee of management. Despite the fact that recruiting people to committees of management was cited by participants as a major challenge, in most of the participating organisations all positions were filled or had co-opted members in positions. Committee structure: Most organisations had traditional positions as deemed in their constitution and used subcommittees or working parties. Some organisations had specified representation such as: Skills based requirement Members of the organisations parent body A client representative Other agencies, including service providers government Clan or kinship groups (Aboriginal organisation)
and
local
Ten of the organisations had one or more positions that were nominated or approved either by another part of the organisation (such as a branch), or by another agency (including State government Ministerial appointment). Working parties and sub committees were a popular method for extending the structure of the committee for such things as organisational development, quality monitoring, strategic 9
planning, auditing, organisational policy work, issue development and finances. Committee composition: A broad range of people, reflecting a range of motivations and organisational types, are involved as volunteers on committees of management. There was a tendency for smaller organisations to have more people from an interested individual or community profile compared with larger organisations where particular skill and expertise became more prevalent, but never exclusively so. Organisations in rural areas tended to have committee members who were on a number of other committees, reflecting the smaller pool of people that organisations are drawing on. Several organisations had committee members who were previous staff or former clients, or representatives of other organisations or interest groups. Retirees and self employed people also figured significantly in membership. A few organisations identified gaps in their membership, most often for representatives of young people, or links to the local community. Skills of committee members: Virtually all the people interviewed felt that their individual skills and knowledge and those of other committee members were adequate to govern the organisation. The only consistent skills gap identified was legal knowledge but most organisations addressed this through paying for legal advice, using contacts or accessing pro bono legal advice. Many of those interviewed described the importance of having a range of skills and expertise on the committee, including both specific knowledge and broader views. Other skills described as important included the need to interpret social needs, knowledge of places to go to at relevant times for reliable information and having networks or good contacts. Many also mentioned the importance of knowing when they needed external advice or input, and how to access this. Some organisations had the ability to co-opt additional members for specific expertise. The skills base of committees has been, and continues to be, one of the constant concerns of practitioners and resource providers. 10
Although many organisations are themselves confident in their skills, the assessment from external agents such as funding bodies, peak bodies and consultants is that this confidence may itself be uninformed in many instances. Training for committees of management was a constant suggestion in consultations for this project, and has consistently been a primary recommendation from research into committees of management in Australia (OToole, 1981; Roche, 2000).
11
12
3. THE WORK MANAGEMENT
OF
VOLUNTARY
COMMITTEES
OF
3.1 WHAT IS GOVERNANCE? Definitions of corporate governance are many and varied. Broadly speaking, corporate governance generally refers to the processes by which organisations are directed, controlled and held to account. It encompasses authority, accountability, stewardship, leadership, direction and control exercised in the organisation.(Australian National Audit Office, 1999: 1) Although, as the quote above indicates, there are many definitions of governance of organisations, these vary mainly in the emphasis given to particular aspects of a common definition. Some definitions emphasise control, others emphasise leadership, others emphasise strategic direction setting and so on, but there is general agreement on the basic components that are outlined in the definition used by the Australian National Audit Office. Governance for not for profit organisations, and other incorporated organisations, takes place within the legal parameters of fiduciary duty. This locates governance within a context of duty of care for an organisation, and the requirements that governing bodies act in the best interests of the organisation. Essentially, governance can responsibilities and liabilities: be seen as a set of duties,
Duties: the committee of management has the duty to act in the best interests of the organisation ('fiduciary duty'). Responsibilities: the board of management has a responsibility to ensure that the organisation is run properly, by making sure that the organisation is well managed: - constitutionally - that the organisation follows the aims and rules of its constitution ('compliance') - legally - that the organisation operates within the law, and honours all contracts ('probity') - financially - that the organisation does not go broke or into unmanageable debt ('solvency') 13
Liabilities: the members of a committee of management of a not for profit organisation have limited individual liability
This description of governance outlining a legal duty of care for an organisation, provides a starting point for understanding governance. A definition of governance also requires: Some statement of the purpose of governance, which provides a description of the actual role of board or committee members. A context related to not for profit organisations. For voluntary committees of management, governance also implies the pursuit of the goals and aims of the organisation, and the practice of the values or beliefs that are part of the organisations foundation.
Participants in the research for this project were generally confident that they knew what governance was, and understood their role as committee members. Their interpretation of governance and the governance role of a voluntary committee of management was relatively consistent across the group, and also consistent with the definitions and descriptions in governance literature. The governance role of voluntary committee members, based on these descriptions, is composed of:
Custodianship or stewardship of the organisation, with the responsibility of shepherding and safekeeping the organisation on behalf of its members or constituents, particularly in terms of ensuring that the organisation pursues its stated purpose and remains viable. Leadership, forward planning, and guidance to the organisation, particularly in terms of developing a strategic culture for the organisation.
Authority, accountability and control, providing monitoring and oversight of the management, including ensuring good management practices, appropriate checks and balances and providing protection for members and the organisation.
Most discussions of governance go beyond a definition and also contain descriptions about the practice of governance that is, the what to do and the how to do it. These descriptions usually imply or describe particular ways of carrying out governance or model of 14
governance that the writer believes is effective. They describe what committees of management ought to do, or how they ought to do it. 3.2 WHAT DO VOLUNTARY COMMITTEES OF MANAGEMENT DO? The majority of respondents described committees of management as fulfilling their governance role by providing the big picture and setting policy and future direction, rather than becoming involved in day to day operations. As one interview respondent explained: The Board is responsible for the ends not the means. Operational responsibility is with the CEO who is the only employee accounting directly to the Board. All other staff account to the CEO. Board sets the policy direction and makes sure that the CEO is working towards this end. This aligns with the current approach to governance championed by writers such as John Carver (Carver, 1997), and generally accepted as the corporate governance model. It presents particular challenges to many voluntary committees of management, who do not necessarily find this division of responsibilities easy to achieve, and to small organisations in particular, where there is no CEO to whom the operational tasks can be delegated. Participants in the research project identified the following tasks and activities as the role of their committees: Deciding the allocation of responsibilities and delegating appropriate authority Setting strategy and policy, and longer term strategic planning with an annual review Monitoring organisational performance against the strategic plan Risk management Policy development Keeping up with current demands and foreseeing new trends, facilitating growth and evolution Keeping the organisation going Managing funds and ensuring the organisation is financially viable and assets are protected Meeting community expectations and knowing the needs of membership Maintaining focus, integrity and quality of service Overseeing legal functions/ responsibilities 15
Recruiting, assisting and working collaboratively with the CEO, or other staff Lobbying and representing members interests with government and decision makers Networking and making links with other organisations These sets of responsibilities align with those suggested by available literature and recent good practice guides (Walter and Turnbull, 2001, Fyffe and McCubbery, 1997; Bradfield and Nyland, 1999 ) Voluntary committees of management are responsible for the governance of the organisation, but may also involve themselves in other aspects of the running of the organisation. This has tended to lead to confusion for committee members and staff about what governance is, and debates as to the proper role of the committee (Hamilton, 1992; Hunter, 1993; Nyland 1994). There is agreement that governance is not: The The The The management of the organisation administration service or product delivery support tasks (eg fundraising)
However, many committees of management become involved in one or more of these other functions. This involvement then becomes confused with the governance role, and committees debate how narrowly or broadly defined their role should be. Organisations that need assistance from their committees of management in areas of management or administration frequently believe that corporate governance is not an appropriate description, as the model of corporate governance currently promoted prescribes against committees becoming hands on. In assisting the full range of voluntary committees of management to provide effective governance, it is important to ensure that a diversity of models of governance are identified and promoted.
16
4. THE EXPERIENCE OF VOLUNTARY COMMITTEES OF MANAGEMENT

4.1 INTRODUCTION The experiences and issues raised by organisations participating in consultations and interviews for this project reflect common governance concerns for the not for profit sector that have not changed significantly over two decades. A consistent set of issues concerning the governance of not for profit organisations has been documented by Australian researchers since the 1980s (Alexander et al, 1980; OToole, 1981; Hamilton, 1992). Since the sudden emergence of large numbers of community based organisations in the late 1970s, the concerns for, and about, voluntary committees of management have focused on: The structure of governance, and the role of committees of management The operational aspects of maintaining committees, running committee business, ensuring effective management of organisations and dealing with problems The impact of changing environments, and the perception that there are continually increasing complexities in the job of voluntary committees of management.
Although the issues have not changed significantly, the research for this project indicates that the nature and understanding of governance has developed substantially. The level of familiarity with the term governance and the understanding of the core aspects of governance appears to be reasonably high across the sample of organisations that took part in the research. This needs to be read in the context of claims by some forum participants that many ordinary members of committees of management are not familiar with the term, and do not have a well developed understanding of their governance role. The majority of people interviewed, however, demonstrated an understanding of the term governance and of the governance role of a committee of management, although some were less confident than others in their interpretation. Some respondents said they had 17
a vague understanding of it, but only one respondent said they were not familiar with it. Equally, with the exception of a small number of respondents, respondents believed that most, if not all their committee members were clear about their roles and responsibilities, and that the understanding of governance responsibilities was widespread. The exception was for new committee members, who were repeatedly cited as needing time to gain confidence and understanding of their role, particularly if they have had no prior committee experience. For a number of organisations, recent work on reforming or reviewing their governance, or restructuring their organisation, had resulted in members gaining a much improved understanding of governance. Respondents understood that governance referred to the way in which the committee of management interacts with the organisation, and provides the structure, direction and oversight for the organisation. Some longer term committee members, however, were so knowledgeable about their organisation and the operational details, that they found it difficult to describe governance in these terms, even though they were very clear about the operational responsibilities of their senior paid staff. 4.2 THE STRUCTURE COMMITTEE DO? OF GOVERNANCE: WHAT SHOULD THE
People participating in the research were very conscious of their responsibilities as members of committees of management. Longer term committee members seemed quite confident about what they were doing, especially where they had other committee experience in similar sized organisations. People who were either less experienced, or had not been in business or who were not confident (particularly with regard to finances) were much less confident in their decision making. The key concern for most committee members who participated in the research was determining how the governance role translates into responsibilities and tasks for the committee. In particular, differentiating between a hands on role and a more strategic or goal setting role was a point of concern. Discussion on this issue appeared to be an ongoing process in many organisations. Differentiating between the role and tasks of the committee and those of staff is also a particular issue for many organisations. 18
In larger organisations with paid senior staff, there is a far greater adoption of a strategic leadership role, and for these organisations, implementation is more a matter of the education of committee members to let go of operational tasks. For small to medium sized organisations, and organisations without a chief executive officer, there is a tendency for far greater blurring of the strategic and operational (or governance and management) roles to occur. As noted in the previous section, for many organisations, the combination of roles is a necessity. The main challenges to developing a strategic and goal setting role appear to be: Resources: The lack of staffing support, and the need to combine roles make it difficult for some committees to differentiate their governance role clearly. Time: A number of respondents commented on the problem of finding time away from immediate issues to spend on longer term strategic thinking, or as one person termed it, positioning the organisation beyond the surf. Procedures: Some organisations do not have the information they need to design and implement effective delegation and monitoring procedures. Expectations and beliefs: For a proportion of organisations, confusion or debate about what the committee should do is a function of the type of people who are attracted to committee membership, and their reason for joining. There is a natural tension between people joining an organisation because they are interested in what it does, and have skills that are primarily related to operational matters, and the expectations of a governance role. This can lead to clashes between the expectations of committee members and those of staff over their respective roles.
4.3 THE OPERATIONAL ASPECTS: HOW SHOULD THE COMMITTEE CONDUCT ITS BUSINESS? The majority of concerns and issues raised by participants in the research project, and generally by members of committees of management, relate to the various aspects of how to conduct the business of the committee effectively. 19
Committees of management face challenges with: Recruiting new committee members, maintaining the committee and ensuring that committee members are familiar with their responsibilities Conducting effective committee meetings, dealing with the actual workload and paperwork, and finding time to deal with issues adequately Securing sufficient funds for the organisation, and planning with limited resources Responding to specific problems, particularly industrial or legal issues.
For each of these areas of operation, committee members need to know how to best approach the challenge within the context of the organisation and its community. As one interview respondent commented: We are operating in a vacuum no place to share ideas, thoughts and experience this is sorely needed where can you go to find out how others do things, what solutions have worked elsewhere, to see that your problems are normal and not your fault. 4.3.1 Recruiting and maintaining the committee
Most organisations participating in the research appeared to have to work hard to recruit people on to their committees, even when they have structures involving nominations from other organisations or branches. The most common method of recruiting committee members appears to be by word of mouth (27% of sample organisations) or approaching people directly (22%). The next most common way was by advertising publicly (16%) or calling for nominations through the organisations newsletter (18%). A small number of organisations focused on looking for people with specific skills (11%), and a few used an interview process (7%). A number use more than one method of recruiting.
20
Very few organisations appear to leave recruitment to the process of the Annual General Meeting, even though election at the Annual General Meeting is the formal process by which most organisations formalise the membership of the committee through election. A substantial amount of head hunting takes place in the pre Annual General Meeting phase of recruitment. Very few organisations mentioned that they had any planned form of succession, and some commented that they found succession planning difficult to establish as a practice, as it required a long term view that was lacking in their organisations. Difficulties in attracting committee members were generally attributed to the time commitment (including travel time for some rural organisations), a lack of motivated or interested people, the level of responsibility involved and the actual workload. One person referred to the burdensome nature of being a volunteer, emphasising that voluntary committee work can be stressful and difficult. As a consequence of difficulties in establishing reliable succession strategies, some organisations found that they experienced turn over of committee members that was either too fast (leaving the organisation without experienced committee members) or too slow (leaving the organisation stagnant in its thinking and practices). Limited success in recruitment strategies, or simply drawing from small pools of people creates composition problems for many organisations, including: Lack of representation from diverse ethnic groups in the community Personal relationships existing between individual committee members and individual staff (particularly in rural and small communities where everyone knows everyone) Limited expertise, particularly in specific professions A number of people commented on the time that it takes to orient a new committee member, to get a new committee working well as a group and for members to understand the role and responsibilities of being a committee member. Limited training opportunities also mean that there is a risk that some committee members will be highly skilled, particularly if they have access to professional development in some other capacity, while others on the same committee may remain at a limited level of understanding and skill. 21
Where committee retention is poor, and vacancies occur mid term, replacements can be difficult to recruit. Vacancies and members absent for other reasons can put substantial strain on other committee members. 4.3.2 Conducting effective committee meetings
Although agenda setting and meeting procedures are the usual focus of advice on running effective meetings, the main challenge reported by organisations was managing limited time within committee meetings and getting through the committee workload. Organisations commented that they found there was never enough time to complete everything and that there were particular problems finding adequate time for planning. Meeting time tended to get taken up with the most immediate issues (often operational), at the expense of longer term issues and strategic discussions. Of particular concern to some was trying to make responsible decisions in meetings, when those decisions really required more consideration. One person commented that it was tempting to just make the decisions without bothering to investigate thoroughly and spending the time and effort to be thorough and systematic. For some, there were time constraints in just scheduling committee meetings, and getting nine busy and committed people together at once. Others reported that some committee members take on too many tasks and find themselves overloaded. In some cases, this included unavoidable internal sub committees, or, in other situations, people who were on the committees of multiple organisations. Along with the problem of getting through the committee business within the time available was a common problem of information overload, and the time required to read and digest the board papers. As one person put it, Each month the papers are about a half inch thick, and many cannot read all this material. The trick is to be able to summarise twelve pages into two pages so they can catch the key information and issues. Another respondent, discussing the issue of the skill base of committees, commented that the issue on several of the committees 22
with which he was involved was being time poor rather than skills poor. 4.3.3 Securing sufficient funds
Ongoing financial viability and improving resources is a constant issue for a high proportion of not for profit organisations. The resourcing of these organisations is a complex issue, as they do not generally operate according to commercial principles. Most community sector organisations: Attempt to do more than they can actually afford: This occurs for two reasons: i) The philosophy of service and of volunteering mean that these organisations operate within a culture of stretching every resource as far as possible, of constant fundraising from the public, and of attempting to meet what are often limitless needs of their constituent communities. Those organisations that contract with government bodies to provide funded services believe that they are constantly being required to do more within existing resources. In some cases, this includes increased service volume, but the most common reported issue is increased accountability and reporting requirements, causing additional costs in administration and/or additional time and work at the committee level.
ii)
Spend as little as possible on infrastructure: The focus of most community sector organisations is on providing a service, product or activity at the most affordable cost to their constituent group. Consequently, they have tended to prioritise paying for service provision over infrastructure costs. Often the committee of management is the last area of an organisation to receive any resourcing and support.
The experience reported by participants is that they are constantly on the lookout for funds, and that there is often a tension in committee decision making between representing community interests and a more businesslike approach.
23
As one person commented: There is never enough money for what is expected and what needs to be done. We spend one third of the year trying to get money, and then it arrives half way through the year - so much for annual plans and planning. 4.3.4 Responding to specific problems
Voluntary members of committees of management are aware of their liabilities to differing degrees, and this tends to be highlighted when specific problems occur. The most commonly reported concerns involved either industrial or legal issues. Committee members find dealing with industrial issues particularly difficult, as there are often conflicting sympathies, a lack of knowledge about industrial law, and disagreement about the best way to handle situations. People joining committees of management to support the delivery of a particular service or activity do not necessarily come prepared to confront angry staff, to make a judgment about the performance of a senior staff person, or to dismiss a CEO. Similarly, many committee members find the legal system generally daunting, and have limited knowledge about relevant legislation. On the other hand, they are taking on responsibilities for an organisation that is enmeshed in a wide range of legislative requirements, encompassing contract, civil and industrial law. Unlike large corporations, most not for profit organisations do not have the resources to retain legal advice when they need it, and often do not even realise when they are making decisions that have legal implications. The other common area of specific problem is internal weaknesses or collapse in the organisation, when a review or restructure is required. This usually involves committee members in additional work, stress related to achieving smooth transitions, and managing staff and other stakeholder expectations.
24
4.4 THE IMPACT OF CHANGING COMMITTEES KEEP UP?
ENVIRONMENTS:
HOW
CAN
A common theme in the responses about challenges for committees of management was the external environment, and the perception that there are increasing pressures particularly for organisations receiving government funding. Organisations that do not rely heavily on government funding report less concern about the changes in their environment. All incorporated organisations are subject to basic reporting and compliance requirements, and consequently are sensitive to: Reviews or changes in these requirements (which occasionally occur) Shifts in the broader environment that signal greater scrutiny of their activities, such as when publicity is given to an organisation under investigation Changes in an industry, such as when other organisations undergo forced amalgamations, or a for profit company enters their business area for the first time Changes in their operating environment that have a direct impact, such as recent sharp rises in insurance costs. For small organisations, or organisations with limited resources, keeping up with these changes, and analysing the potential impact can be difficult for committee members, without skilled staff to prepare information and advise them. For organisations receiving government funding, the situation is amplified by what are perceived as constant changes in government policy, and increasing and/or changing demands from government for both delivering services and the attendant accountability requirements. The fact that the environment of organisations will never be static means that there is a continuous and sometimes steep learning curve related to environmental change and to responding within the organisation by changing methods of operation and accountability. The role of peak bodies is crucial in being able to adequately inform organisations about environmental changes and how these will impact on constituent organisations. 25
4.5 GOVERNANCE ISSUES FOR PARTICULAR ORGANISATIONAL TYPES Governance is a concept that has been derived from and developed for large, corporate organisations. Recommended practices from its modern corporate form are generally well suited to most large not for profit organisations, and medium sized organisations where paid staff provide a senior level of management and administration. They are not so well suited for many other organisations, however. 4.5.1 Governance issues for small organisations
As already noted, small organisations, particularly those with few, or no paid staff, find the concept of corporate governance, and often the administrative requirements of their incorporation, challenging and onerous. The hands off, strategic leadership model of governance is not realistic if there is no Chief Executive Officer (CEO) to delegate to. Due to their limited resources, it is small organisations that often have the need to use committee of management members to perform very hands on tasks, including administration. Governance practices for small organisations need to be scaled to match the complexity of their business (which can range), and the resources that are available. 4.5.2 Governance issues for Aboriginal organisations
Aboriginal organisations have their constituent base in Aboriginal communities, generally restricting their voting membership to Aboriginal people. The majority of Aboriginal organisations operate in the provision of health, medical, housing, legal, employment and welfare services, although there are also active organisations in the sport and arts fields, as well as Cultural Heritage and land management. The challenges facing Aboriginal organisations in particular must be considered within the historical context of European colonisation. Not only do Aboriginal people continue to experience stark social and economic disadvantage, but they work with an imposed system of laws, requirements, expectations and practices that often clash with 26
traditional Indigenous laws and customs and with current Aboriginal community practices, expectations and obligations. The legal base and structure of not for profit organisations is an imposed construct, and there are questions about the cultural appropriateness, and the impact that culturally inappropriate requirements and practices have on the operation of committees of management (Nettheim, 1998, Bradfield et al, 2001). The basic structure of voluntary (unpaid) committee members lacks logic for some Aboriginal people, and the argument is sometimes made by Aboriginal organisations that committee members should be paid. For most Aboriginal people, being on a committee of management, is not a luxury and not something done in your spare time. The people who are elected to the committees of management of organisations are usually from the community that the organisation delivers a service to. Their involvement means a commitment and responsibility to the members of their community to ensure that the organisation continues to provide the services offered, and to lobby for additional resources. Aboriginal people report that the usual duties of serving as a committee member are compounded by the expectations of their community, which, given a history of oppression and the foreign nature of incorporated organisations sometimes means community views of how the organisation should operate and what should be achieved are unrealistic. As one respondent commented: The organisation is seen to be responsible for all issues relating to the well-being of an Aboriginal person, this is impossible to fix when there is a mix of unemployment, homelessness, racism, drug and alcohol problems, and gambling, etc. The expectations from the community are enormous, there are very little rewards and the position of a board member is thankless. Family clan groups have a large say in the community. These are not necessarily the traditional owners. This area has many people from all around. Another issue for Aboriginal organisations is that, due to the closeness of communities, in most cases a committee member will be related to or associated with individual recipients of services, and close relationships or family ties between committee members, staff members, and other community organisations create potential conflicts of interest. 27
Aboriginal organisations also operate in an environment of particular scrutiny, and many feel that they are required to be more accountable than non-Aboriginal organisations (ODonoghue, undated). Governance practices for Aboriginal organisation need to be developed and assessed with regard to Aboriginal terms of reference (Oxenham, 1999). This means that thought is given to designing governance practices that fit well with the way the community operates. 4.5.3 Governance issues for culturally or politically specific organisations, and faith communities
Organisations are formed by people from particular racial, national or cultural backgrounds to work for their communities, and every group will have particular cultural practices which may, or may not match well with western corporate governance. Most commonly, issues arise around expectations and obligations that exist within the community, such structures of authority and leadership, that are not necessarily reflected in the way the organisation is structured. Similarly, organisations are established with particular philosophical or religious beliefs that impact on governance practices. The most common in Australia has been various forms of collective democracy, which present a challenge for more hierarchical defined corporate governance practices. Organisations with particular cultural or political foundations need to identify the values and practices that are important to them to retain, and design governance practices that accommodate these values and practices.
28
5. WHAT IS GOOD GOVERNANCE?

5.1 INTRODUCTION The background research for this project confirms that the governance role of a voluntary committee of management consists of providing: Custodianship or stewardship of the organisation, and ensuring that the organisation pursues its stated purpose and remains viable. Leadership, forward planning, and guidance, and ensuring a strategic culture for the organisation. Authority, accountability and control, and ensuring good management practices, appropriate checks and balances and protection for members and the organisation.
Voluntary committees of management do this within the context of incorporation legislation, which prescribes fiduciary duties and the responsibility to ensure the legal compliance, probity and solvency of the organisation. Although Victorian not for profit organisations may operate under one of several forms of incorporation, the legal parameters for the way in which voluntary members of committees of management should conduct business are common. Essentially, good governance within the incorporation framework consists of: Acting in the interests of the organisation (fiduciary duty) Being honest and careful (diligent) Keeping informed about what the organisation is doing Keeping proper financial records Ensuring debts can be paid Declaring any personal interest that might conflict with the interests of the organisation or duties as a member of the committee
The advice of the Australian Securities and Investments Commission (ASIC) is that company directors should: Be fully up to date on what the company is doing 29
Find out the impact on the companys business performance of any proposal (particularly one involving financial commitment) Seek outside professional advice when there is insufficient information to make a properly informed decision Question management and staff about how the business is going Take an active part in the directors meetings (i.e. not rubber stamp)
(ASIC, The Watchdogs Guide, 2002)
The legal parameters, and the above points, provide a sound minimum standard for basic governance. However, researchers, writers and practitioners have many other good governance practices to add to this minimum standard. 5.2 THE SIZE THAT FITS: DIVERSITY OF GOVERNANCE MODELS Opinions on specifically how the governance role should be conducted, and the way in which voluntary committees of management should fulfill their responsibilities, vary. The Australian National Audit Office (ANAO) has endorsed the policy of the OECD on diversity in governance, stating: Despite various attempts to define corporate governance and its elements, there is no single model of good corporate governance. Although the general principles are widely accepted, they are not set in concrete and must be adjusted to reflect the specific circumstances and needs of individual organisations.
(ANAO, 1999: 2)
The ANAO goes on to quote a USA Business Roundtable publication stating Good corporate governance is not a one size fits all proposition. What might constitute good governance practices for a specific organisation will be subject to: The perception of the stakeholder: Researchers have found that measures of organisational effectiveness vary substantially across different stakeholders, and that judgments about effective governance practices follow a similar subjective assessment (Herman & Heimovics: 1994, 1998; Herman, Renz & Heimovics: 1997).
30
The context of not for profit organisations: Aspects of organisational effectiveness and therefore effective governance that are important for not for profit organisations (most noticeably, those related to values, philosophy and mission), may be given less importance or not addressed at all in good practice guides for government bodies or for profit organisations. The nature of the organisation: As discussed in the previous section, the appropriateness of different governance practices and the value given to different aspects of governance, will vary for organisations of different sizes, and with different constituent communities. Formal professional standards: Increasingly, professional standards for different industries or sectors are being developed, and are addressing governance and management issues. For some sectors or industry groups, accreditation against standards has become mandatory (most noticeably in health, aged care, childrens services and disability services). As each of these is developed within an industry sub sector specific context, the aspects of governance that are highlighted, or the practices suggested, will differ. At the broadest level, the overarching industry quality standards (ISO 9000), and the more specific standards for health and community services (Quality Improvement Council), provide guidance for basic governance standards.
5.3 PERSPECTIVES ON GOOD GOVERNANCE The following section provides an overview of the range of opinions about what constitutes good governance presented by: The sample of Victorian organisations consultations and background research Academic and research literature The how to guides existing practical tools and resources that took part in
5.3.1
Victorian not for profit organisations: what they value
31
In all but one of the organisations taking part in individual interviews, people described aspects of governance that were working well5. People also described aspects that were not working well, and together these items provided a picture of what aspects of governance were valued and seen as important to the functioning of the committee and the organisation. These included the following: Composition and continuity of the committee, with a mix of skill, passion and experience, appropriate representation, and effective succession planning, managing an appropriate turnover Cohesion, with committee members having agreed vision for the organisation, values and understanding of their role Clarity about roles, responsibilities documented job or role descriptions and tasks, including
Confidence amongst and between committee members Code of ethical conduct Consensus, with healthy debate, good group dynamics, cooperative interaction and the committee working well as a team, with individuals taking responsibility for active participation and questioning Clear understanding of operations, strategy and financial responsibilities, and the difference between strategic and operational issues, and agreement on priorities and where energy should be directed Strong links to the constituent community, particularly through the breadth and diversity of committee representation, in touch with members/community and responsiveness to membership needs Strong structure, and integrated management system, with financial security, effective strategic planning, asset management (including intellectual property)
One organisation responded that it was in a poor state of operation, and that nothing was working well.
32
Good relationships between the CEO and the committee, with clear procedures for reporting, and an understanding that the CEO is accountable to the whole committee Clear processes and ways to review activity, including agreed performance measures, and the capacity to review the size and scope of the organisation Accountability to the community, stakeholders and internally to staff, volunteers, members, and other parts of the organisation Ongoing policy development on issues that keep the committee energised and rejuvenated Meetings are kept short and well organised, finishing on time and using processes that are flexible in relating to different membership needs and skills Good documentation, including minute taking and distribution of papers prior to meetings Contributing to entrepreneurial activity and maintaining links and networks Maintaining a positive and well regarded profile
This list provides a fairly comprehensive base from which to develop principles of effective governance practice. As the list represents the expectations and values of the sample of Victorian not for profit organisations involved in the research, principles based on this list should be appropriate generally for Australian not for profit organisations. 5.3.2 Academic and research literature
Recent Australian research into governance for community based organisations identified several approaches to corporate governance in existing mainstream research (Roche, 2000). Corporate governance has also become of increasing interest to researchers and theorists working more specifically in the third sector or not for profit area (Carver, 1997; Harris, 1991; Herman et al, 1994; Holland and Jackson, 1998; Kilmister, 1993; Widmer, 1991).
33
The main discernible difference between the generic governance literature and the literature of the not for profit sector is the tendency of the not for profit arena to emphasise: The importance of the values and mission of the organisation
and The relationship with the constituent community or members
Together, these two bodies of literature provide a variety of good governance analysis that, despite highlighting or privileging different aspects of the governance role, is relatively consistent. The discussions covered in the existing literature can be loosely grouped under the following approaches: Control framework: A number of approaches are focused on mechanisms for establishing accountability, monitoring, and effective risk management. The establishment of internal controls is seen as critical to effective governance, and to ensuring that the organisation is protected (for example, Turnbull, cited in Roche, 2000: 16) Visionary leadership: This describes approaches that focus on the responsibility of the committee of management to provide the strategic direction and maintain the values and mission of the organisation. Behaving well: This approach focuses on codes of practice and ethical conduct, emphasising the responsibility of the committee members to conduct themselves honestly and diligently. Roles and responsibilities: Exploration of how the committee of management should structure its role and its relationship with staff is the most common focus in the literature of the not for profit sector. Literature includes research into how organisations allocate roles and tasks through to theoretical and practical models of governance structure. Much of this work is influenced by the concept of the strategic board, which steers, not rows. The work of John Carver has been particularly influential, as it translates the steering not rowing role of committees of management into a practical model for not for profit boards.
The literature on governance presents a number of specific emphases and approaches to good governance. These remain 34
consistent with the principles identified by organisations themselves, but more clearly identify particular aspects and emphases. 5.3.3 Practice guides and resources
There is a substantial number of practice guides and resources for committees of management, both Australian and international. Like the academic and research material, they tend to have slightly different emphases, reflecting their authors particular governance model and the intended audience. The specific tips or practice suggestions they make, or the checklist of practices they provide may vary in content, but essentially do not conflict. Across a range of resources surveyed (refer to Section 9: Resources), the following common areas were identified: Coherent aims and goals, or mission Roles and responsibilities Strategic direction setting and planning Risk management and accountability Financial management Committee processes (including recruiting members, maintaining the committee and meeting procedures) Legal and statutory responsibilities External relationships (including attracting sponsorship and stakeholder satisfaction) Review and monitoring of performance Human resource management (including recruitment of CEO) Service delivery Ethical standards and codes of conduct.
5.4 BENCHMARK PRINCIPLES: A COMMON FRAMEWORK The fact that there are horses for courses in effective governance practice does not mean that practices cannot be assessed within a common framework, or benchmarks established for good governance. Across different types of organisations and the academic and practical literature, are themes of good practice, and general consensus on the types of governance outcomes that any organisation should achieve. These need to be differentiated from actual specific practices for achieving these outcomes, which may, and should, vary across 35
organisations. From the information gathered in the research it is possible to identify: a) A set of core governance outcomes, that apply to all organisations: These are drawn from a consensus on benchmark principles, and provide an easy and quick reference to good governance principles. b) Generic indicators that apply to all organisations: These allow committees of management to assess whether they are achieving each of the core governance outcomes and meeting the benchmark principles. c) Guides to good practice that enable the principles and indicators to be applied to different organisations: These provide a guide to organisations on designing and tailoring their actual practice within the context of good governance principles.
36
6. REFERENCES
Alexander, J., Deagan, C. et al: One Step Forward, Two Steps Back: The hidden problems in community management of children's services, Social Research and Evaluation, Sydney, 1980 Australian Bureau of Statistics (a): Voluntary Work 2000, Australian Bureau of Statistics, 2001 Australian Bureau of Statistics (b): Community Services, Australian Bureau of Statistics, 2001 Australian National Audit Office: Corporate Governance in Commonwealth Authorities and Companies, Australian National Audit Office, 1999 Australian Securities and Investments Commission (ASIC): The Watchdogs Guide, ASIC, 2002 ASIC & Australian Institute of Company Directors: The company directors survival kit, ASIC & AICD, 1997 Ben-Ner, A. and Van Hoomissen, T.: The Governance of Nonprofit Organisations: Law and Public Policy, Nonprofit Management and Leadership, Vol 4, No. 4, pp393 414, 1994 Bradfield, J. and Nyland, J.: Access to Training - A Survey of Community Services Industry Workers in NSW, CACOM Working Paper No.24, 1994. Bradfield, J. and Nyland, J.: Stronger Community Management: A Discussion Paper, 1997. Bradfield, J. and Nyland, J.: Governance and Management, Good Practice Guides for Community Housing Providers, NSW Federation of Housing Associations, 1999 Bradfield, J. and Nyland, J.: Aboriginal and Torres Strait Islander Models of Management, report for the NSW Department of Community Services, 2000 Bradfield, J., Craigie, C. & Nyland, J.: A 'Whole of Community' Approach: Sustainable management for Aboriginal organisations, paper to People, Place & Partnerships Conference, March, 2001 37
CACOM: The Resources Guide, CACOM, UTS, Sydney, 1996 Carver, J.: Boards That Make a Difference: A New Design for Leadership in Nonprofit and Public Organizations, Jossey-Bass, San Francisco, 1997 Community Health Unit, Aged, Community and Mental Health Division: Guidelines for the Governance, Election and Appointment of Members of Boards of Declared Community Health Centres, Victorian Department of Human Services, May 2001 Community Services and Health Training Australia Management of Community Based Organisations Competency Standards Project, Final Report (1997): National
Community Services Victoria: Welfare as an Industry: A study of Community Services in Victoria, Community Services Victoria, 1992 Fyffe, C. and McCubbery, J.: Management Practice Standards for Non Government Committees and Boards of Management, Council of Intellectual Disability Agencies (CIDA), 1997 Hamilton, C.: The Crisis of Change: Governance and Management in Nonprofit Community Organisations in Victoria, unpublished, VCOSS Community Services Project, 1992 Harris, M.: Exploring the Role of Voluntary Management Committees: A new approach, Working Paper No 10, Centre for Voluntary Organisations, London School of Economics, 1991 Henry, K., Lane, M. and Roach, D.: Community Management: A Working Model, Local Community Services Association, Sydney, 1990 Herman, R. et al: The Jossey-Bass Handbook of Nonprofit Leadership and Management, San Francisco, Jossey-Bass, 1994 Herman, R. and Heimovics, R.: A Cross National Study of a Method for Researching Non-Profit Organisational Effectiveness, Voluntas, Vol 5, No 1, 1994 Herman, R., Renz, D. and Heimovics, R.: Board Practices in Local Nonprofit Organizations, Nonprofit Management & Leadership, Vol 7, No 4, 1997 38
Herman, R. and Heimovics, R.: Nonprofit Organizational Effectiveness: Contrast Between Especially Effective and Less Effective Organizations, Nonprofit Management & Leadership, Vol 9, No 1, 1998 Hilmer, F.: Strictly Boardroom: Improving Governance to Enhance Company Performance, Information Australia, 1998 Holland, T. & Jackson, D.: Strengthening Board Performance: findings and Lessons from Demonstration Projects, Nonprofit Management and Leadership, Vol 9, No 2. 1998 Hunter, M.: Community Management in Children's Services, Health, Housing, Local Government and Community Services, Canberra, 1993 Industry Commission: Charitable Organisations In Australia, AGPS, Canberra, 1995 Kilmister, T: Boards at Work: A New Perspective on Not-For-Profit Governance, NFP Press, 1993 Lyons, M.: The Australian Nonprofit Sector ,Working Paper No 13, Centre for Australian Community Organisations and Management, 1993 Lyons, M. and Nyland, J.: Supporting the Managers, report to the Commonwealth Department of Human Services and Health, 1995 McGregor-Lowndes, M.: Comparative Legal Structures of Nonprofit Organisations, paper to the ARNOVA Conference, Indianapolis, 1992 MSTU: From Good Intentions to Good Practice: Documenting Good Community Practice, VCOSS, 1993 Nettheim, G.: Governance Bodies and Australian Legislative Provision for Corporations and Councils, Discussion Paper 7 of Governance Structures for Indigenous Australians on and off Native Title Lands, University of New South Wales and Murdoch University, 1998 Nyland: Organising Options: community management revisited, NSW Council of Social Service, Sydney, 1994
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Nyland, J.: Community Management: A Model in Crisis? in Inglis, J. and Rogan, L. Beyond Swings and Roundabouts: Shaping the Future of Community Services in Australia, Pluto Press, Sydney, 1993 ODonoghue, L: The uses and abuses of accountability, ATSIC website, undated O'Toole, V.: Poor Relations, 1981 Osborne, S. (ed): Managing in the Voluntary Sector, London, Chapman-Hall, 1996 Oxenham, D.: Aboriginal terms of reference: The concept at the Centre for Aboriginal Studies, Curtin Indigenous Research Centre, Curtin University, 1999 Roberts, J.: The Craft of Managing, Council of Intellectual Disability Agencies (CIDA), 1996 Roche, D.: Governance Research Project, Commonwealth Department of Family and Community Services, 2000 VCOSS: Community Management Handbook: a guide to community management for community organisations, VCOSS, Melbourne, 1991 Walter & Turnbull: Corporate Governance: Handbook for the Board, Commonwealth Department of Family and Community Services, 2001 Widmer, C.: Board Members Perceptions of Their Roles and Responsibilities, in Collaborations: The Vital Link Between Practice, Research and Disciplines, proceedings of the ARNOVA Conference, Chicago, 1991
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APPENDIX 1
Organisations taking part in the background research ACROD Victorian Division Assoc. of Neighbourhood Houses & Learning Centres Albury/Wodonga Volunteer Resource Centre Alpine Valleys Community Leadership Program Australian Boys Choral Institute Budja Budja Aboriginal Co-op Children's Welfare Association of Victoria Civic Chamber Council of Intellectual Disability Agencies (Vic) Council on the Ageing Victoria Country Education Project Inc Country Fire Authority Community Child Care (Victoria) Department of Human Services Department of State & Regional Development Duke Street Community House Elizabeth Hoffman House Aboriginal Women's Refuge Ensay Community Health Centre Environment Victoria Equestrian Federation of Australia (Vic Branch) Friends of Skelton Creek Greta Valley Landcare Group Kindergarten Parents Victoria Lilydale Cemetery Manningham YMCA Moreland City Council Moreland Hall, Uniting Care Narre Learning Centre NE Rural Education Project Co Njernda Aboriginal Corporation Outdoor Recreation Centre Oxford Houses Point Leo Committee of Management Queen Victoria Women's Trust Royal Victorian Bowls Association Sandy Point Foreshore Committee of Management St Vincent De Paul Community and Support Services The Royal Life Saving Society Australia (Vic Branch) Volunteering Victoria 41
Volunteers of Banyule VICSERV Victorian Aboriginal Health Service Co-op Victorian Council of Social Service (VCOSS) Victorian YMCA Wangaratta Arts Council and Regional Arts Victoria Wangaratta Chamber of Commerce Wangaratta Regional Tourism Development Wangaratta Textile Arts Association Warragul Cemetery Trust Whitehorse Community Health Service Youth Affairs Council of Vic
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APPENDIX 2
Interview schedule IYV GOOD GOVERNANCE PRACTICE RESEARCH PROJECT Background information 1. 2. 3. 4. 5. 6. What term does the committee of management use to describe itself? How many positions are on the Committee/Board? Are all of these positions filled at the moment? Does the Committee/Board have any particular structure? How does the organisation Committee/Board? recruit members for the
What type of people tend to join the Committee/Board (e.g. Paid staff from other organisations in the industry, people with specific relevant professional expertise, local interested community people)
Governance 7. 8. 9. Are you familiar with the term governance? How does your Committee/Board see its role and purpose? What proportion of the members of the Committee/Board are clear about this role and their responsibilities as Committee/Board members?
10. Does the Committee/Board have any ongoing debates or discussions related to its role? (if, yes, what are these issues?) 11. What aspects of the Committee/Boards operation are working well? 12. Does the Committee/Board have any ways of doing things that are particularly effective? 43
13. What types of challenges or problems has the Committee/Board had do deal with? 14. Are there any other factors that have made it difficult for the Committee/Board to carry out its role effectively? 15. Does the Committee/Board have adequate skills and expertise amongst its members to carry out its role confidently? If not, what skills or knowledge areas are not adequate or are missing? 16. How does the Committee/Board obtain the information it needs to carry out its role? What type of information does the Committee/Board get from the CEO/staff, and in what form? Is the information the Committee/Board receives from staff adequate for the Committee/Board to perform its role confidently? The Good Governance Practice Research Project 17. What issues do you think that this project needs to address? 18. What would you list as being important to good governance in an organisation like yours? 19. What advice or information would be useful for organisations like yours to be included in the final report of this project? 20. What would be the best way for information to be made available for you organisation? Would you be more likely to use the internet or printed material? 21. Are there any agencies or services that you know of that provide resources or information to Committees/Boards of community organisations to assist them to carry out their role? Other Any other comments?
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GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

A Project of the State Government of Victoria

Bradfield Nyland Group for Department of Human Services

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

ISBN: 0 7311 6144 0 State Government of Victoria, 2002

Bradfield Nyland Group for Department of Human Services

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

CONTENTS 1. FRAMEWORK FOR GOOD GOVERNANCE PRACTICE .. 1

Overview .................................................................................1 Guide To Good Governance Practice ............................................3

DEVELOPING GOOD GOVERNANCE PRACTICE....... 10

Bradfield Nyland Group for Department of Human Services

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

1. FRAMEWORK FOR GOOD GOVERNANCE PRACTICE

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

GUIDE TO GOOD GOVERNANCE PRACTICE: OVERVIEW Benchmark Principles

2. A clear understanding of the role and operation of the committee of management

3. Work, within external requirements, in the best interests of the organisation

4. Work on behalf of the members and stakeholders of the organisation

5: Conduct business in an efficient and effective manner

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

GUIDE TO GOOD GOVERNANCE PRACTICE

General Indicators of Good Practice

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

General Indicators of Good Practice

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

General Indicators of Good Practice

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

Element 4: Work on behalf of the members and stakeholders of the organisation

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

Element 5: Conduct business in an efficient and effective manner.

General Indicators of Good Practice

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

General Indicators of Good Practice

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

2. DEVELOPING GOOD GOVERNANCE PRACTICE

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

Link to The Charts

The Governance Guide

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

THE GOOD GOVERNANCE PRACTICE RESEARCH PROJECT

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

VOLUNTARY COMMITTEES OF MANAGEMENT

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

The governance role

The actual role of the committee of management is to:

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

The governance duties

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

WHAT DO VOLUNTARY COMMITTEES OF MANAGEMENT DO?

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

ABOUT GOVERNANCE ISSUES AND CHALLENGES

The structure of governance, and the role of committees of management

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

Adapting governance models

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

ABOUT GOVERNANCE WHAT IS GOOD GOVERNANCE?

What the law requires

GOOD GOVERNANCE PRACTICE FOR VOLUNTARY COMMITTEES OF MANAGEMENT

What organisations value

What academic and research literature says