4.2 Roles and responsibilities of a governing body
- What is a governing body?
- How the governing body interacts with management
- Roles and responsibilities
- Roles and responsibilities of a governing body
- Role of the chair or head
- Duties of a governing body
- Codes of ethics and conduct
- Effective decision making of a governing body
What is a governing body?
A governing body is the group of people given the power and authority to govern an organisation. They can be elected by voting or nominated through Indigenous decision-making processes.
Governing bodies come in all shapes and sizes. They can take the form of a board, a council, a steering committee, or an assembly of elders or traditional owners.
The members of the corporation or organisation elect or nominate the people on a governing body. The governing body then represents the members.
The governing body must use good judgment and protect the rights, interests and well-being of all members. They are not there to speak for themselves or on behalf of just a few people.
How the governing body interacts with management
Roles and responsibilities
The governing body has a responsibility to:
- plan
- lead
- organise
- make decisions about the organisation’s direction
The governing body should have a clear and agreed understanding of their role and responsibilities within the organisation. These roles are usually set out in the constitution or rules and the legislation under which the organisation was established.
It is the governing body as a group which makes and implements decisions and speaks on behalf of its members and organisation. It is not the chair or president or individual board members.
A governing body has to:
Roles and responsibilities of a governing body
An Indigenous governing body also has culturally based roles and responsibilities. These are usually not written down, but they come from the values, laws, rules, traditions and processes at work in the day-to-day lives of the community and its members.
These responsibilities can be very different to other responsibilities of a governing body. For example, they could include putting one’s family first, promoting the interests of one group above others, and sharing money with family who ask for help.
(Read more about two-way power and authority in Topic 2.2)
See: Resource 4.3 Check list—Roles of an Indigenous governing body
Role of the chair
The chair represents the organisation to the members and the outside world. Her/his role is very important for good governance. The chair is like the captain of the football team, whose job it is to bring everyone’s individual skills together and encourage members to develop new skills.
The chair of a governing body should:
- lead the governing body and community
- steer the direction and performance of the organisation
- ensure good relationships with members and the community and
- model and promote high standards of behaviour and practice.
Duties of a governing body
The duties of governing body members are set out in the rules of the corporation and laws like the Corporations Act.
Duty of care and due diligence
“Due diligence” means taking care. It is a legal requirement for a governing body. This means they must be cautious and careful when making their decisions.
It does not mean that they have to be an expert on everything. Instead, they must get all the information they need (maybe from an outside expert) before making a decision.
Being cautious and careful means that the individual members of a governing body:
- understand the legal aspects of the incorporation legislation under which the organisation exists (e.g. by-laws, rules, code of conduct and policies)
- are informed about the activities of the organisation and general trends in any business it operates
- can clearly speak against a decision being considered by the governing body
- will support decisions made by the governing body and keep the process confidential
- act in good faith
- understand the different responsibilities of the board and management
- declare any conflicts of interest
Fiduciary duty and conflict of interest
A conflict of interest occurs when:
- an elected member, or a CEO or manager, profits at the expense of the organisation they serve
- a person acts in their own interest rather than the best interests of the organisation
Fiduciary duty is a director’s legal and moral duty to act for the benefit of the organisation they represent.
It is often challenging for boards to come to terms with the internal and external expectations placed on them. What may be seen as a conflict of interest by western society may not be seen as such within Indigenous society. In fact it may be seen as responding properly to the normal demands of family and reciprocal sharing.
See ORIC’s fact sheet: Duties of directors and other officers
Codes of ethics and conduct
Members of a governing body should be committed to high standards of conduct and ethics both as individuals and as a group.
To do this, most governing bodies create their own written policies or rules, set out in a Code of Ethics and Code of Conduct, which members are then expected to understand and comply with.
These codes are usually written down and encourage collective decision-making, shared objectives and respect for the governing body’s decisions.
Often these codes contain statements about cultural standards of behaviour and ethics.
Codes work better when people make the rules for themselves, rather than having them imposed from the outside, or by management. This can take some time and effort but it means the code is more likely to be realistic and widely accepted.
Effective decision making in a governing body
Decision making is central to governing. Decisions may be about long-term policy or strategic planning, or about everyday issues such as short-term projects and goals.
The eight characteristics of an effective decision
Good decisions are:
- transparent
- based on sound information
- based on extensive consultation
- clarified and discussed by the governing body
- made efficiently during well-run meetings
- made following a set of rules or principles
- implemented and followed through
- made with increasing efficiency through practice, experience and increased skills and techniques
Indigenous forms of decision making
Caption: Goldfields Land and Sea Council
Decisions in Indigenous communities or groups are usually made through extensive discussion and consultation. Decisions are open to ongoing negotiation. This is called consensus decision making.
In resolving issues and making decisions by consensus, Indigenous people usually spend a lot of time hearing from those who oppose the decision. It is considered important in maintaining harmonious relationships and allows people to share thoughts about the decision being made.
In consensus decision making, the chair of a board, or the leaders of a group need to take on the role of a facilitator, negotiator and mediator, rather than acting as someone making the final decision.
It is now common for legislation to allow traditional decision-making procedures. This brings consensus decision-making into the processes of governing boards.
See: Resource 4.4 What can we do?—Decision making processes
See: Resource 4.5 Check-up—Governing body decision making processes
Read next: 4.3 Capacity building for governance
Read previous: 4.1 Good leadership