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6.1 What are governance rules?

• Rules can be either formal or informal
• Create good rules
• Why are governance rules important?

Governance rules are the tools of good governance.

They are used to organise, maintain and regulate the power, leadership and behaviour of people in communities or organisations, and they govern how decisions are made.

Governance rules set out:

• who has the authority to make decisions and about what
• how decisions should be made
• who can talk on behalf of others
• what obligations there are between leaders and their citizens or members

Rules can be either formal or informal

Create good rules

Good governance means having good rules—formal and informal rules that work and have wide support. Most importantly they need to be understood, easily used and enforced.

There’s no point having a full set of written policies explaining how the rules work, if only one person reads and understands them.

Every governing body has the right to make its own governance rules that are a cultural ‘fit’ for the community, as long as they comply with the law.

Once formally adopted, rules are binding on all the individual members. It is the chairperson’s role, on behalf of the board, to enforce these rules during meetings.

Write down the rules

It is important to write the rules down and make sure copies of the rules are always accessible. It may also be necessary to translate the rules into language. They need to be plainly set out, so they can’t be misinterpreted or used for the wrong reasons.

Reassess the rules

Communities and organisations often change. That means governance rules sometimes need to be assessed, evaluated and changed to make sure they continue to be relevant.

Why are governance rules important?

How effective and credible an organisation is depends on its rules and processes—especially those to do with the accountability and performance of its leaders, boards, executive managers and staff. Everyone needs to know exactly what they can and cannot do.

When rules are weak or not followed, then organisations can become unstable, ineffective or even corrupt.

When rules are strong and everyone follows them, organisations are seen as reliable, legitimate and effective.

Many Indigenous Australians direct and manage complex organisations without knowing the rules.

There are many reasons for this:

1. The rules often come from non-Indigenous laws. Often these laws don’t reflect Indigenous ideas about how rules should be made and enforced, and who has authority to make decisions.
2. Some board members may find it hard to understand and make rules for their organisations because they might not be literate in English. Also some of the technical and financial information they have to understand can be very difficult.
3. Some people also find it hard to keep up with the government’s rules for funding, service delivery and polices, which often change.

Read next: 6.2 Where does culture fit in your governance rules?

Read previous: 6. Governance rules and policies