The Oxford Dictionary defines to govern as “to steer, guide, or control. Ernst & Young use the phrase “system and processes for ensuring proper accountability, probity and openness.” and the Australian Institute of Company Directors (AICD) uses “overseeing business and compliance performance”. However it's defined, Governance means being accountable for oversighting and steering the affairs of the charity or not-for-profit to ensure it is well run, compliant and carrying out the purpose for which it was established.
The area of governance is very wide and not in order of priority, includes:
- Leadership and culture
- Strategy and risk appetite
- Communication – external and internal
- Reporting lines/ Escalation
- Roles and responsibilities
- Delegated authority and its exercise
- Executive performance and remuneration
- Management information
- Accountability
- Control function
- Data integrity
Good internal systems and processes minimise governance failure and ensure compliance obligations are met.
The role of governance is different to that of the management of the operations.
Questions with which Lesleigh can help you answer in relation to corporate governance
- Is it clear to you how your governance structure fits together?
- Is it clear who does what in each of the governance bodies?
- Who is making the decisions for each of these bodies?
- Are they the persons that should be making those decisions?
- Is the board undertaking governance or management?
- Is it clear what has been delegated to others?
- What are the lines of authority?
- How are the board satisfied that they are receiving the appropriate information to properly oversight the bodies (reporting and accountability)?
- What needs to change? What needs to remain the same?
- How does the board monitor and reviews performance including the oversight of the exercise of delegated authority
- How effective are your meetings and communication flows to and from the board?
- Reviewing the quality of ‘management information and reports’ received for meetings and the management of information, records of meetings and responses to instructions, monitoring actions
- What governance policies exists and what others might be of value
- How are branches structured? Are they separate entities or under the control of the central body?
