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Part 2: Roles of a Board : Governance/Management interface

Introduction

The understanding of the respective roles of a board (governance) and the team led by the CEO (management) is a significant part of good governance.  The general principles of good governance apply to the MCH family of boards albeit with a ‘Crown governance’ flavour.

Governance

For boards such as the MCH family of boards, the role of governance can be described as the process by which the Board sets the strategic direction and priorities, sets board policies and management performance expectations, identifies and manages risk, monitors and evaluates organisational achievements in order to exercise its accountability to the organisation and it’s stakeholders. Above all a board should ‘add value’.

Management

Management staff are led by the organisation’s Chief Executive (or a similar title). They are responsible for the day to day operational activities of the organisation. They should work within the organisation’s strategic direction and within the parameters delegated by the board. Through the CEO (who is an important interface), they are accountable to the board and as such must provide suitable reporting to enable the board to effectively monitor their performance. It is good governance to ensure that an entity has in place a clear protocol that sets out the communication channel for board members with management/staff. The CEO is the key to this.

Effective Governance

For MCH boards, the steps for effective governance might include:

  • Regularly scanning the environment, beyond the organisation, to ensure that what it is attempting to achieve remains relevant and achievable;
  • Establishing a framework for identifying and managing risks;
  • Within the entity’s brief under its enabling legislation (e.g. Broadcasting Act and Crown Entities Act) or equivalent (such as a Deed), and taking into consideration the environmental scan and risk identification, defining the organisation’s strategic direction. This will include its formal Vision, Mission and Strategy and the Statement of Intent;
  • Developing a governance ‘umbrella’ that clearly sets delegations and parameters for operational activities. These would often be in a Board Policy Manual;
  • Ensuring, in the Statement of Intent and other documents, that appropriate key outcomes and results are specified and that resources have been allocated;
  • Appointing, supporting and evaluating the Chief Executive and, in the case of Crown entities, ensuring that the appropriate consultation with the State Services Commission has occurred in respect to CE appointments, evaluation and remuneration;
  • Communicating with the organisation’s stakeholders particularly Ministers, the Ministry and central agencies (a role often delegated to the CEO) to ensure they are kept appropriately informed and are able to fulfil their responsibilities towards the entity;
  • Ensuring that the board complies with contractual and statutory requirements and with the board’s own policies;
  • Setting standards for, and evaluating, the board’s own governance performance in accordance with any requirements in the organisation’s SPE; and
  • Ensuring that Ministers or other “appointers’’ are aware of the appropriate balance needed, in the board’s view, for succession planning.

Appendix

Web links


Updated on 6th March 2017