governance and management
why governance is important
Governance comes from the Latin word gubernare meaning "to steer".
Good governance creates a strong future for an organisation by continuously steering it towards a vision and making sure that day-to-day management is always lined up with the organisation's goals. It ensures that the organisation remains viable and thrives. At its core, governance is about leadership.
Effective governance will improve the organisation's results (both financial and social) and make sure the owners' assets are protected and funds are used appropriately.
Poor governance can put organisations at risk of commercial failure, financial and legal problems for directors/trustees or may allow an organisation to lose sight of its purpose and its responsibilities to its owners and people who benefit from its success.
effective governance
Effectively functioning governing bodies have:
- a good skill mix (see "Recruitment" section)
- an effective chairperson (see "Governing Body Officers" section)
- committees for specialist tasks
- well managed meetings (see "Managing Governing Body Meetings" section)
- dynamics that allow free expression of different perspectives — an effective chairperson, backed by a strong vision for the organisation and clear protocols, can make sure all perspectives are taken into account
- outside specialist help on some issues — this is necessary if you cannot use the organisation's staff (which should be your first port of call) e.g. in the case of highly sensitive matters
- good self-evaluation (see "Self-evaluation" section).
Studies on successful organisations also show that effective governing bodies demonstrate a strong understanding of the difference between management and governance (see the next section).
difference between governance and management
As mentioned earlier, there's a point in an organisation's life where the distinction between governance and management becomes important.
Both the governing body and management need to be clear about their respective roles. The job of the governing body is to govern (provide direction, leadership and control) and the job of the chief executive is to manage the operations of the organisation. The governing body's role is to oversee management, not to manage. It must be satisfied that the chief executive is doing his/her job in accordance with policy and resources.
This distinction between governance and management can be difficult to understand and carry out. But one way of steering through the confusion is to always consider matters before the governing body in terms of the strategic plan and always leave the job of actually carrying out the strategic plan to the chief executive (and his/her staff).
the "new work" of governing bodies
Increasingly the approach of effective governing bodies is moving away from a strict corporate governance — management separation and interpretation. The focus is more on giving attention to what really matters for the organisation. The emphasis is on:
- finding out what matters through, for example:
- asking the manager or co-ordinator to paint the big picture of what the organisation is dealing with
- getting to know key stakeholders
- consulting the experts
- deciding what needs to be measured
- acting on what really matters
- organising the governing body's time and energy around the issues that really matter
- focusing meetings on what really matters.
(From The New Work of the NonProfit Board, Taylor, Chait and Holland).
governing body-chief executive relations
A sound governing body/chief executive relationship is central to a mutually satisfying working relationship and ultimately to organisational success.
A governing body should encourage unity of control and accountability by having only one direct employee — usually the chief executive. The chief executive should employ all other staff and should also be acknowledged as responsible for the work of all staff, be they paid or unpaid volunteers. The chief executive should be delegated maximum authority to manage all operational matters.
An effective and productive governing body/chief executive relationship is built on:
- mutual respect for their separate but mutually interdependent roles and responsibilities
- a clear and unambiguous definition of the results to be achieved
- clearly defined and documented delegation and authority
- mutual agreement about the boundaries of freedom granted to the chief executive to carry out his/her role and tasks
- a fair, ethical and transparent process for evaluating the chief executive's performance
- an ability to engage in robust debate and a mutual willingness to challenge and to offer and receive constructive criticism.
(From Getting on Board, Creative New Zealand).
extra dimensions to governing Māori organisations
As set out in Te Puni Kokiri's "Effective Governance" website, although good governance principles and practices are universal, no two organisations are ever the same. There are also particular characteristics of Māori organisations which bring extra dimensions to the practice of governance.
These may include:
- Multiple purposes — many Māori organisations have to balance multiple purposes e.g. financial viability and social and cultural aspirations.
- The importance of tikanga and values — tikanga principles are often put into practice in the governing body of a Māori organisation alongside general governance principles. Many are explicitly driven by tikanga, kawa and values e.g. tangihanga and cultural leave policies. Cultural considerations will sometimes take precedence over purely economic factors. Māori organisations may also have a Māori dimension in their procedures e.g. the use of te reo Māori, mihi, karakia, koha, manaakitanga, whanaungatanga, regular consultation hui etc.
- Long-term view — many Māori organisations have a long-term view of their future e.g. in strategic planning, a 25 year view or more may be taken.
- Appointment of governing members — rather than being a skill-based selection, governing body appointments in Māori organisations may be influenced by other factors, such as, whakapapa, tikanga (e.g. appointing a rangatira or respected elder), whanaungatanga (e.g. appointing a relative).
- Governing body dynamics — the dynamics around the governing body table of a Māori organisation can be influenced by factors such as the importance of tikanga and values, a long-term view, use of Māori terms etc.
- Involving owners in decision-making — governing bodies of Māori organisations may be required to undertake a higher level of consultation.
- Te Tiriti o Waitangi — many Māori organisations refer to the Treaty of Waitangi in their mission/vision statements and core legal documents.
- Use of Māori terms— the use of te reo Māori (e.g. constitutions in te reo) can lead to difficulties in interpretation. Clear definitions/translations may be required to overcome this.
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