It is very important to address the issue of governance no matter what type of organizational structure is established. Corporate governance is the processes, systems and standards involved in directing, controlling and adding value to an organization and its stakeholders. Such processes and systems entail the setting of strategic directions, the development of organizational policies, and the establishment of expectations for management performance and the monitoring of achievements.

As significant funds will be placed under the management of the organization, it is vital that a framework is established for organizational accountability and for defining boundaries between the responsibilities of boards of management, committees and paid staff. Vic Health‘s comprehensive Governance Charter provides an excellent model which is worthy of consideration. The Charter spells out the organization’s approach to a range of areas including:

  • Governance practice which covers such matters as: values; the role of the Board; legislation and relationship with the Government; board focus; the role of the Chair; selection, appointments and induction of board members; care, skill and diligence requirements; board meetings; board advisory processes; delegations; and reviews of board performances.
  • Corporate relationships which cover such matters as: the relationship between the Board and the chief executive office (CEO); the role of the CEO; CEO assessment; and risk management strategies, including financial, operational and personnel management.
  • Strategic direction setting and monitoring, which covers such matters as: setting directions; the process for determining strategic directions; performance monitoring; evaluation and quality assurance; reporting schedule; and compliance and reporting framework.

An organization practising sound governance will publish codes of conduct and proper practice to be followed by management, staff and advisory committees, as well as those who work in organizations which receive funding for projects and sponsorships. For those who are in decision-making positions, there must be a requirement to declare interests in applications or projects under consideration and it is, therefore, necessary to prepare an appropriate policy and procedures manual.

A comprehensive governance policy, developed and widely disseminated in the early stages of the new organization’s establishment phase, will do much to build confidence that the organization will fullfil its statutory responsibilities while acting ethically and prudently.

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