Governance
The material on this page is courtesy of Te Puni Kokiri's Effective Governance website. Philanthropy New Zealand is grateful for their support.
Governance in its widest sense refers to how any organisation, including a nation, is run. It includes all the processes, systems, and controls that are used to safeguard and grow assets.
When applied to organisations that operate commercially, it is often termed "corporate governance" and has been described by the World Bank as "promoting fairness, transparency and accountability" and by the OECD as "a system by which business organisations are directed and controlled".
The principles of governance apply to any organisation, whether it the biggest multinational company or a small family trust in a remote part of New Zealand.
In philanthropic or grantmaking organisations, the objectives of governance will take into account the way in which administrators and/or trustees relate to the assets and what they are used for.
In some instances, although the organisation operates commercially, commercial objectives may be balanced with the need to safeguard the assets for future generations.
Te Puni Kokiri has a website dedicated to effective governance. All links on this page will take you directly to the effective governance website
Topics covered include:
What boards do
Boards make decisions on behalf of owners/shareholders, beneficiaries and other stakeholders of an organisation. A board's essential role is to lead the organisation safely and successfully into the future.
The board sets the direction for the future and manages risk. The key tasks are:
- Setting the purpose and vision
- Setting strategies for achieving the vision
- Recruiting the CEO
- Monitoring performance
- Demonstrating accountability
How boards work
Effective boards need:
- A good skill mix within board directors/trustees
- An effective chair
- Committees for specialist tasks
- Well managed meetings
- Board dynamics that allow all perspectives to be expressed
- Outside specialist help on some issues
- Good self-evaluation
Studies on successful organisations also show that effective boards demonstrate a strong understanding of the line between management and board responsibility.
Being a board member
A board's success rests on the skills and commitment of the directors or trustees, who make decisions on behalf of the owners and continuously make sure the organisation is moving in the right direction.
Crucial to the role is the ability to work for the good of the organisation as a whole. Even if a director/trustee has been elected or appointed to represent a particular group, as a board member his/her duty is to consider the overall success of the organisation.
Directors/trustees on philanthropic and grantmaking organisations are often working not just for the current owners of the organisation, but for future generations of owners.
In this section you will find:
- Joining a board
- Duties of directors/trustees
- Values and ethics
- Conflicts of interest
- Personal risk
- What to expect from management
- Director/trustee training
Te Puni Kokiri's Effective Governance website has a lot more information. It is worth a visit.
Other organisations committed to good governance in New Zealand, the Institute of Directors in New Zealand, the Securities Commission of New Zealand and the New Zealand Stock Exchange have all published detailed guidelines on the principles of governance and the responsibilities of boards.