Functions and powers of the entity
Collective duties of the board and individual duties of board members
Role of the board chair
General responsibilities of members
Members' interests and conflicts: identification, disclosure and management
Disclosure of information
Gifts and hospitality
Board meeting procedures
Crown entities as employers
Planning and reporting
Board and member performance evaluation
Board appointments and reappointment
Remuneration and expenses for board members
Liability and protection from legal claims or proceedings
Summary of minimum content for a governance manual by chapter
Best practice corporate governance boards ensure they are exhibiting certain behaviours in order to undertake their board role effectively and in accordance with the highest ethical and professional standards. This is notwithstanding any legal requirements that have been placed upon the board. While such behaviours may form the basis of a separate board code of practice / code of conduct, we recommend they also are part of the governance manual.
The list below is not exhaustive, nor is it in order of importance, but it should assist boards to specify appropriate behaviours:
- Responsibility to the entity. Members need to recognise and always act consistently with their responsibilities to the entity and to Ministers. They should attend induction training and board members' professional education to familiarise and update themselves with their governance responsibilities.
- Strategic perspective. Members need to be able to think conceptually and see the 'big picture'. They should focus, as much as possible, on the strategic goals and overall progress in achieving those rather than on operational detail.
- Integrity. Members must demonstrate the highest ethical standards and integrity in their personal and professional dealings. They should also challenge and report unethical behaviour by other board members.
- Intellectual capacity. Members require the intellectual capacity to understand the issues put before them and make sound decisions on the entity's plans, priorities and performance.
- Independent judgement. Members need to bring to the board objectivity and independent judgement based on sound thought and knowledge. They need to make up their own mind rather than follow the consensus.
- Courage. Members must be prepared to ask the tough questions and be willing to risk rapport with fellow board members in order to take a reasoned, independent position.
- Respect. Members should engage constructively with fellow board members, entity management and others, in a way that respects and gives a fair hearing to their opinions. In order to foster teamwork and engender trust, members should be willing to reconsider or change their positions after hearing the reasoned viewpoints of others.
- Collective responsibility. Members must be willing to act on, and remain collectively accountable for, all decisions even if individual members disagree with them. Board members must be committed to speaking with one voice once decisions are taken on entity strategy and direction.
- Participation. Members are expected to be fully prepared, punctual and regularly attend for the full extent of board meetings. Members are expected to enhance the quality of deliberations by actively asking questions and offering comments that add value to the discussion.
- Informed views. Members are expected to be informed and knowledgeable about the entity's business and the matters before the board. Members should have read their board papers before meetings and keep themselves informed about the environment in which the entity operates.
- Financial literacy. Boards monitor financial performance and thus all members must be financially literate. They should not rely on other members who have financial qualifications and should undertake training to improve their own financial skills where necessary.
- Sector knowledge. Members need to make themselves familiar with the activities of the entity and sector. This is likely to include attending induction sessions and ongoing background study.
Obligations described in other chapters of this guidance (e.g. conflicts of interest, gifts and hospitality) should also be considered for incorporation into a board's material on appropriate behaviours.
Governance manual content: General responsibilities of members
At a minimum a good governance manual should cover:
- a description of the general behaviour expected of and approach to be taken by members; and
- cross-references to relevant chapters, eg, identifying and managing conflicts of interest, key relationships.