Understanding Governance Roles & Responsibilities to Support Good Governance:
1. Understand your governance role and responsibilities.
2. Understand the relationship and interdependence of your governance role and responsibilities with the other governance roles and responsibilities.
3. Effectively address and execute the responsibilities of your governance role without interfering with or undermining other governance roles and responsibilities.
4. Support and assist other governance roles in effectively addressing their responsibilities wherever effective, practical and appropriate.
Governance Roles, Relationships and Accountabilities
Shareholders, Membership, Citizens etc.… The source of core funding of the organization through shares, membership taxes, etc.… Should also be the ultimate accountability of the business or organization.
A mechanism of accountability of the Board of Directors to the ownership. Delegates may be formal or informal.
· Informal Delegates are the shareholders or members who decide to attend a general membership meeting such as an AGM. The shareholders or members who do not attend have informally delegated the authority to make decisions to the people, members or shareholders who do attend, but only on the issues that are on the agenda circulated to all the members or shareholders.
· Formal Delegates are persons formerly chosen by membership or shareholders to represent the general membership or shareholders at meetings. Formal Delegates may be as simple as holders of proxies, or they may be invested with specific authorities in the By-Laws or Constitution of the business or organization.
Board of Directors:
Responsible for hiring the CEO, defining the expectations of the CEO, and holding the CEO accountable for achieving expectations. The Board of Directors is accountable to the ownership or membership, generally through the informal or formal delegates but the accountability could be directly to the membership or shareholders in very small businesses and organizations.
Note: Board positions such as Chairperson, Treasurer, and Secretary, as well as committees are not noted here because they do not, or at least should not, have any authority. Chairpersons are servants of the assembly whether it is the assembly is the Board of Directors or an AGM. The Chairperson’s responsibility is to facilitate informed and considered decisions of the assembly they chair. Other Board of Directors positions are also servants of the assembly with other responsibilities. Committees are capacity building of the Board of Directors to do research and make recommendations on issues to the Board of Directors. None should have authority to supersede the Board of Directors responsibilities.
· Hired or selected by the Board of Directors and accountable to the Board of Directors.
· Responsible for achieving the purpose of the organization and the expectations of operations defined by the Board of Directors.
· Staff is capacity building of the CEO role. Other than issues of compromising Board defined expectations of operations including ethical staff treatment, staff are not a concern of the Board of Directors, Delegates or Ownership. Expectations of the CEO regarding staff should include hiring and training of specific capacities such as CEO succession planning, financial expertise, operational expertise etc.
· Staff includes everyone other than the CEO involved in operations. This includes paid employees, volunteers, contractors. Staff, and accountability to the CEO, also includes anyone from the ownership side of governance who is involved in operations. They are all accountable to the CEO because the CEO is accountable for operational achievement.
|Servants of the Assemblies
· Assemblies whether they are a Board of Directors, General Meeting of the Ownership or Committee have authority for their responsibilities only as an assemble. Each assemble has individuals appointed to positions that assist in the assembly’s responsibilities.
· Servants of Assemblies do not make or control decisions of the assembly. Assembly Servants serve the needs of the assemble in either supporting the work of the assembly or in implementation of the assembly’s decisions.
|Servants of the Ownership
· Business or Organization
o A business or organization is a servant of the ownership. Every business or organization exists to serve a purpose, that purpose is a service or value to the ownership, or to provide a service or value to someone or something on behalf of the ownership.
o Delegates serve the ownership at General Meetings where the Board of Directors is held accountable for organizational performance.
· General Meeting Chairperson
o Generally, also the Chairperson of the Board of Directors however the Assembly could have its own Chairperson and the Chairperson may be called the speaker.
o Responsible for supporting orderly and considered deliberation and decisions on the agenda items being considered by the assembly.
· General Meeting Secretary
o Responsible for ensuring the recording and keeping of records or minutes of decisions of the assembly.
o Chosen by the General meeting assembly of the Ownership to audit the past years accounts that they may be presented to the Ownership or their delegates at an Annual General Meeting.
· Board of Directors
o The Ownership delegates the responsibility of direction, oversight and accountability of operations to the Board of Directors.
o The Assembly may recruit expert advisors with specific skills or knowledge to give advice on issues of deliberation or assist in making decisions.
o Responsibilities of research and recommendations are often delegated to committees to assist the assembly in their responsibilities. Committees do not make decisions for the Assembly.
Board of Directors Duties
(Also applies to Delegates when they are acting as servants of the Ownership)
Directors on Boards have specific, legally required, duties:
Duty of Loyalty
Directors must give their undivided loyalty to the organization and must not let matters of personal interest or profit come into conflict with the interests of the organization.
Duty of Honesty
Directors must act honestly at all times when dealing with, or on behalf of, the organization.
Duty of Care
Directors must look after the affairs of the organization with as much care, good sense and good judgment as a reasonable person would in the same circumstance.
Duty of Skill
Directors are not required to be experts. Directors are required to use as much skill in making decisions for the organization as any similarly skilled reasonable person.
Duty of Diligence
Directors must be diligent about their work as directors. Directors need to attend meetings regularly, read all minutes and reports from committees, look at all the available facts including expert recommendations on issues, but then make up their own minds on decisions.
Duty of Prudence
Directors are expected to exercise caution and common sense on behalf of the organization.