Governance and management

Effective governance

At its core, governance is about leadership. Effective governance ensures that the organisation remains viable and thrives, improving its results (both social and financial) and making sure its assets are protected and funds are used appropriately. On the other hand, 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 members and the people who benefit from its success.

Effectively functioning governing bodies have:

  • a good mix of skills
  • an effective chairperson
  • committees for specialist tasks
  • well-managed meetings 
  • 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 e.g. in the case of highly sensitive matters
  • good self-evaluation

Note that these points are dealt with in more detail later in this section.

Difference between governance and management

Studies of successful organisations show that effective governing bodies understand the difference between governance and management. In smaller community organisations it can be a challenge to separate issues of strategic governance from day-to-day management because there might not be many staff or members so people perform multiple roles. However, as an organisation develops and grows, the distinction becomes increasingly important.

In basic terms, governance is the role of leading an organisation and management is its day-to-day running or operating. Governance is the job of the governing body, such as a committee or board, to provide direction, leadership and control. Management is typically the job of a management or executive team, led by a co-ordinator or chief executive and his/her staff and volunteers. The governing body's role is to oversee management, not to manage. It must be satisfied that the management team is doing its job in accordance with policy and resources.

Governing body/management relations

A sound relationship between the governing body and management is central to a good working relationship and ultimately to an organisation's success. Having only one direct employee usually the chief executive or, in smaller organisations, the co-ordinator will mean one person is in charge and accountable to the board. The chief executive should be delegated maximum authority to manage all operational matters, should employ all other staff and be responsible for the work of the staff, be they paid or unpaid volunteers.

An effective and productive governing body/chief executive relationship is built on

  • mutual respect for their separate but interdependent roles and responsibilities
  • a clear 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
  • open and regular communication
  • an ability to engage in robust debate and a mutual willingness to challenge and to offer and receive constructive criticism.

Extra dimensions to governing Māori organisations

Māori organisations often have particular characteristics that must be taken into account in 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 longer 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.

 

Next page: Roles and functions of a governing group

Previous page: Introduction to governance

Contents of the Community Resource Kit