1. Passion and Prudence: Signs of Good Governance ILM 2010 Bangkok, Thailand Murray Baird mbaird@mooreslegal.com.au ILM 2010 Bangkok, Thailand Murray Baird mbaird@mooreslegal.com.au

2. Welcome…Our time today will be informal non prescriptive aware of diversity of approaches learning together A mix of basics and stretches informal non prescriptive aware of diversity of approaches learning together A mix of basics and stretches

3. Roadmap What is governance? Biblical approaches to governance What does a board do? What makes a good board? Some tips on good governance What is governance? Biblical approaches to governance What does a board do? What makes a good board? Some tips on good governance

4. Governance … What is it? Some definitions Two sides of governance Management vs. governance? Biblical reflections on governance Accountability and communication What is it? Some definitions Two sides of governance Management vs. governance? Biblical reflections on governance Accountability and communication 1

5. Latin: To pilot or steer the ship Greek – kubernetes – helmsman of a ship (direction giving) American - Cybernetics - the study of organization, communication and control in complex systems – connectedness Cyberspace – the place of connectedness Latin: To pilot or steer the ship Greek – kubernetes – helmsman of a ship (direction giving) American - Cybernetics - the study of organization, communication and control in complex systems – connectedness Cyberspace – the place of connectedness What is Corporate Governance?

6. “The System by which Entities are directed and controlled” Australian Institute of Company Directors/Cadbury Report 1992 “The System by which Companies are directed and managed” Australian Stock Exchange 2003 “The way in which an organisation is steered and stewarded” Institute of Chartered Secretaries and Administrators “The System by which Entities are directed and controlled” Australian Institute of Company Directors/Cadbury Report 1992 “The System by which Companies are directed and managed” Australian Stock Exchange 2003 “The way in which an organisation is steered and stewarded” Institute of Chartered Secretaries and Administrators Some definitions

7. “Corporate Governance concerns the Directing of the Company as distinct from the Managing of the Company” Directors Manual CCH Directors set the direction; Managers implement the strategies. Directors are the Mind; Managers are the Hands “Corporate Governance concerns the Directing of the Company as distinct from the Managing of the Company” Directors Manual CCH Directors set the direction; Managers implement the strategies. Directors are the Mind; Managers are the Hands Governance v. Management?

8. Two sides of the Governance coin steward and steer managed and mentored accountable and creative protect and direct manage and direct accountable and entrepreneurial prudence and passion steward and steer managed and mentored accountable and creative protect and direct manage and direct accountable and entrepreneurial prudence and passion

9. The Directors’ Dilemma “The essential board tasks are simultaneously to drive the enterprise forward whilst keeping it under prudent control” Professor Bob Garratt Cass Business School, London. “The essential board tasks are simultaneously to drive the enterprise forward whilst keeping it under prudent control” Professor Bob Garratt Cass Business School, London.

10. Biblical approaches to decision making A sampling … The Direct Presence of God (Exodus 13:21 – Pillars of cloud and fire) Decision by Lot (Exodus 28:15-30 – Urim & Thummin, Acts 1:26 – The lot fell to Matthias) A Council of Leaders (Acts 15:28 “It seemed good to the Holy Spirit and to us …”) Dreams & Visions (Acts 16:9 – Paul had a vision) Leadership Succession (Titus 1:5 Appoint elders as I directed you) The Spiritual Gift of Leadership – Rom. 12:6-8 “If a man’s gift is … leadership, let him lead diligently.” A sampling … The Direct Presence of God (Exodus 13:21 – Pillars of cloud and fire) Decision by Lot (Exodus 28:15-30 – Urim & Thummin, Acts 1:26 – The lot fell to Matthias) A Council of Leaders (Acts 15:28 “It seemed good to the Holy Spirit and to us …”) Dreams & Visions (Acts 16:9 – Paul had a vision) Leadership Succession (Titus 1:5 Appoint elders as I directed you) The Spiritual Gift of Leadership – Rom. 12:6-8 “If a man’s gift is … leadership, let him lead diligently.”

11. Principles from Scripture Reliance upon the Holy Spirit An atmosphere of trust and unity Clearly defined lines of accountability and authority Open and continuous two-way communication Reliance upon the Holy Spirit An atmosphere of trust and unity Clearly defined lines of accountability and authority Open and continuous two-way communication

12. Relationships in good governance Owners Board STAFF Customers CEO Authority Accountability Communication Owners – the stakeholders/ initiators Field board Field Leader Key workers Ministry recipients / our world The Imperfect Board Member, Jossey-Bass, 2006

13. What does a board do? Models and Lists A simple model List of 12 things for a board to do Models and Lists A simple model List of 12 things for a board to do 2

14. A model of what a board does Policy making Strategy formulation Future Oriented Provide accountability Monitoring & Supervising Achieve Mission working through CEO External Role Internal Role Past & Present Orientation Compliance roles Performance roles Source: Tricker, 1994:149

15. What Boards Do #1 Determine Mission and Purpose of Organisation Select, Support and Review the CEO Approve and Monitor Programs and Services Ensure Adequate Resources Effective Fiscal Management and Legal Compliance Determine Mission and Purpose of Organisation Select, Support and Review the CEO Approve and Monitor Programs and Services Ensure Adequate Resources Effective Fiscal Management and Legal Compliance

16. What Boards Do #2 Engage in Strategic Planning Select and Orient Board Members Understand Relationship Between Board and Staff Enhance and Protect Reputation Organise so Board operates efficiently Risk Management Engage in Strategic Planning Select and Orient Board Members Understand Relationship Between Board and Staff Enhance and Protect Reputation Organise so Board operates efficiently Risk Management

17. What makes a good board? 5 essential qualities of a board member Structuring a board 5 essential qualities of a board member Structuring a board 3

18. Essential qualities of Board members Teamwork Time Heart Vision Fiscal Heart Vision Fiscal Source: The Imperfect Board Member, Jossey-Bass, 2006

19. Structuring the board Composition: Right mix of: skills, experience, personality, understanding of the organisation, context and constituencies (stakeholder groups) Be intentional about what you need Succession planning Use a nomination or succession committee Chair takes the lead Rotation Policy Co-option powers Composition: Right mix of: skills, experience, personality, understanding of the organisation, context and constituencies (stakeholder groups) Be intentional about what you need Succession planning Use a nomination or succession committee Chair takes the lead Rotation Policy Co-option powers

20. Some tips on good governance Assessing the board Good directors The Chair What works Assessing the board Good directors The Chair What works 4

21. Assessing the Board Define your Functions Rate how you are doing Ask for improvement suggestions Collate and identify areas for improvement Discuss priorities Plan and Act Define your Functions Rate how you are doing Ask for improvement suggestions Collate and identify areas for improvement Discuss priorities Plan and Act www.boardsource.org www.federationpress.com.au

22. Signs of good Directors Guide and monitor Management Understand the field’ and the economic context Seek specialist knowledge or expert advice when required Bring an informed, independent judgement Active participation without dominating Enquire into untoward circumstances Team Player Guide and monitor Management Understand the field’ and the economic context Seek specialist knowledge or expert advice when required Bring an informed, independent judgement Active participation without dominating Enquire into untoward circumstances Team Player

23. The Chair Role of Chair: Set it out in a charter or role description Gatekeeper of information flow to the board- must not prevent key information flowing Candour and confidentiality without compromise Foster constructive collegiality Set the standards Work with senior management Role of Chair: Set it out in a charter or role description Gatekeeper of information flow to the board- must not prevent key information flowing Candour and confidentiality without compromise Foster constructive collegiality Set the standards Work with senior management

24. What Works Best? Small is Good - 8-12 Take responsibility for succession and balance Service your Board and Communicate between Meetings Refresh and renew Chair is Critical Have an Annual Agenda Cycle Get good advice Small is Good - 8-12 Take responsibility for succession and balance Service your Board and Communicate between Meetings Refresh and renew Chair is Critical Have an Annual Agenda Cycle Get good advice