Board responsibilities
Be accountable to members and other stakeholders
The board needs to understand and take into account the interests of members and other stakeholders. This is because the board is appointed by members to represent their interests, and drive the corporation’s financial performance, operational results and governance standards. Depending on the nature of their activities, some corporations have other stakeholders, such as funding bodies, an industry standards body, contract managers, customers, and employees.
The board should monitor the voice of members and the community it serves. The board must ensure appropriate information flow and report annually to members at annual general meetings so members can raise issues, ask questions and make decisions about board appointments.
Set the strategic direction
The board is responsible for developing and approving strategy that is designed to achieve the corporation's purpose. A board may work with management to develop the strategy as management can provide valuable insights in the process. The board ultimately approves the corporation’s overall strategic direction and major goals, ensuring alignment with purpose and objectives. While management is responsible for executing the strategy, with the board monitoring progress and adjusting the strategy as needed.
Securing necessary resources
The board plays a role in ensuring the corporation has the capability, structure and resources, to implement its strategic goals.
The board is responsible for selecting the best possible CEO or general manager, and properly supporting, mentoring and appraising that person. The board delegates authority to management to implement strategies and policies, and look after day-to-day operations.
The board must ensure there is a strong succession plan in place for leadership positions, helping to ensure stability and continuity in the corporation.
Directors often use their networks to build relationships and partnerships that benefit the corporation. The board guides the corporation in what funding or business ventures are appropriate to support the corporation's purpose.
Governance and compliance
The board is responsible for providing strategic leadership and ensuring the corporation is well-managed and accountable. This includes setting the corporation’s strategic direction, overseeing financial management, and ensuring compliance with legal and ethical standards.
The board also plays a key role in managing risks, supporting the CEO, and protecting the corporation’s reputation and assets. Through strong governance, the board ensures the corporation is effective, sustainable, and serving its purpose.
The board must ensure the corporation follows all legal and regulatory requirements, financial accounting standards, its rule book and policies. oversees financial accountability and risk management, ensures transparency and proper reporting to members and stakeholders.
Monitoring performance
The board regularly assesses the corporation’s performance, reviewing key metrics and progress toward strategic goals. Directors need to understand performance to protect against any imminent issues, particularly in relation to financial management, and satisfy stakeholders with quick results. But they also need to know how the corporation is progressing toward achieving its long-term goals.
The board must challenge management on performance results without becoming involved in day-to-day operations.
Managing risk
The range of risks facing a corporation will depend on its activities and industry. The board plays a key role in identifying and evaluating major risks (financial, operational, reputational) facing the corporation.
The board needs to approve and oversee implementation of a risk management framework that protects the corporation and individual board members against failures relating to performance, and against mischief and wrongdoing, and other threats. The board ensures that crisis management plans are in place and in times of crisis, provides leadership and direction, helping the corporation navigate the challenges.
The board must also set the corporation’s risk appetite. This is deciding how much risk it is willing to accept to advance the corporation’s objectives.
Overseeing and reporting on finances
The board is responsible for overseeing the corporation’s finances, including monitoring to ensure the corporation can pay its bills when they are due.
The board approves the corporation’s budget (allocation of financial, human and other resources across services, projects and new ventures), reviewing it for alignment with strategic goals. Then monitoring expenditure against the budget.
A financially responsible board helps the corporation make informed decisions, avoid financial risks, and meet legal obligations.
The board is responsible for the accuracy of financial reporting. It oversees audits, ensuring the corporation is financially stable and transparent.
Leading and building the corporate culture
The board has an important role in leading and demonstrating an effective organisational culture and high standard of conduct. This role is known as setting the tone from the top. A corporation that acts lawfully, ethically and responsibly will build a good reputation and strong relationships with members, the community and other stakeholders.
A poor corporate culture can affect performance, reputation, community perceptions, employee morale, employee conduct and trust among members, regulators and funding bodies.
Monitoring board performance
The board is responsible for its own effectiveness including ensuring it has the right mix of skills, knowledge and experience to perform its role well, and if any critical skills taking action to address that gap. The board should also ensure there is plan for board succession that aligns with the corporation's strategic needs.
The board is responsible for assessing its own performance, including managing the performance of individual directors.