Setting up corporate governance
Good corporate governance processes and practices ensure the corporation achieves its purpose and objectives, and delivers the outcomes that the members and stakeholders expect.
What good governance looks like
When governance is set up well, these are some outcomes you can expect in your corporation.
- Members actively participate.
- Directors communicate with members regularly, in a way that members understand.
- The board and the wider corporation work in a democracy.
- Directors are keen to learn about and apply good corporate governance and share their knowledge.
- Directors audit their own performance to find areas for improvement.
- Good relationships thrive. People use good conflict resolution policies and procedures.
- Plans, policies and decisions are transparent.
- Planning is a time to work as a team and is an inclusive process. Goals fit with the purpose of the corporation. Plans are actioned, tracked and reviewed regularly. The plan shows 'one voice' in the corporation.
- Budgets are developed against the plan, projects and activities.
- People from diverse groups are actively included in the corporation, for example, women, younger people, older people and people with disability.
Check your corporation’s governance periodically using the governance health check tools.
Setting up good governance
Taking action on a governance plan can prevent problems later. However you set up your governance, it should consider:
- respect for members’ rights
- agreement about and use of effective internal dispute resolution
- timely and accurate reporting to directors
- self-monitoring
- an agreement about who accountability is owed to – and action on this
- agreed decision-making principles
- directors equally representing various interest groups, balanced with skills and independence
- transparency in structure and decision-making
- active and persistent conflict-of-interest management, particularly by the board and directors as individuals
- up-to-date and relevant goals and strategies for the corporation.
The way you do corporate governance will also depend on the corporation size.
Top 10 tips for good governance
- The register of members is a continuous record. Keep it up to date. This will help to resolve any disputes about who is a member.
- Ensure directors fully understand their roles and responsibilities.
- Know your rule book. Encourage your members to learn about it.
- Know your money position or use your auditor more often (for example, every 3 months) to check that staff are managing the money properly. A good auditor will do this for the directors.
- Ensure tax matters are handled correctly.
- Make sure a director is at every meeting when the funding agency(s) come to visit.
- Insure the corporation's property. Check that insurance policies are renewed on (or before) the due date.
- Be careful to only use the corporation's assets in line with funding conditions (most will say that personal use is not allowed). Better still, make a policy about this for everyone to see and use.
- Keep minutes of every meeting of the corporation. Minutes should say what type of meeting you had (AGM, general meeting or directors' meeting, what day it was held, who came, and what decisions were made).
- Hold an annual general meeting (AGM) every year (usually before 30 November).