Getting your directors on board

Over recent years, reforms have focused on making companies ever more accountable. Key amongst these reforms have been measures that put a spotlight on corporate governance within organisations.

Effective corporate governance is not just about ticking off a list of requirements. It’s about actively involving your board of directors in the running of your company.

There is a wide range of benefits that result from good governance practices. These include:

  • Enhanced regulatory compliance, financial understanding and risk mitigation;
  • Better organisational strategies and strategic planning/execution;
  • Improved stakeholder engagement and communication;
  • Increased delivers on purpose/mission; and
  • Greater value creation through research, development and innovation

And while there is no “one size fits all” solution for good governance. The governance arrangements of an organization are influenced by a variety of factors including:

  • The nature of its activities – such as operating risks associated with the particular sector;
  • Geography and stakeholders;
  • The regulatory environment and the legislation that governs the organisation (such as the Corporations Act, and/or state-based Associations Incorporation Acts);
  • The constitution of the board; and
  • Requirements of grantors, funders and other key stakeholders.

Regardless of the size of your organisation, the involvement of your board of directors in driving good corporate governance has a critical impact on the success of your company.


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Top five tips for getting your directors on board:

The following helps to ensure that your board carries out its important role in setting the vision, purpose and strategies of the organisation.

  1. Choose the right mix of skills

Appointing a board with multi-disciplinary skills and experience is essential. From a financial perspective – a board member with accounting and finance experience provides an additional layer of assurance for your finance team

  1. Make every meeting count

Meetings must result in decisions and outcomes. Link the agenda to the critical success factors of the business to help keep meetings focused.

  1. Ensure your board is more than a ‘rubber stamp’

Good boards and board members should maintain professional scepticism about the information presented to them. Rather than simply ‘rubber stamping’ on initiatives, ensure the board is actively involved in decision making.

  1. Give your board hands-on presence

Surveys show that fraud is on the rise. Visibility of board members in the organisation can be an excellent deterrent. Occasionally involving a board member in a spot check of payment authorisations, or having them electronically log in to release a batch of EFT payments, can help prevent fraud and error.

  1. Ensure the board understand their responsibilities  

Boards have a responsibility to ensure a business exercises prudent financial management of its resources, acts responsibly towards stakeholders and complies with relevant laws and regulations. A good board will regularly correspond with the Australian Securities and Investments Commission (ASIC) and the Australian Institute of Company Directors (AICD) to ensure they are fully aware of their responsibilities and legal liabilities.

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