to Governance | Report ExcerptThe Basic
Issues on Governance
Excerpt from the Sage Group Report: New Governance - Some
Governance is important. Without proper direction and
accountability, organizations can easily lose their way and perform
poorly in meeting stated objectives. In a highly diverse and
complicated sector such as children, families and adults with
disabilities, good governance is essential. There are a large number
of stakeholders and service providers involved, more than one level
of government, and most importantly children, families and
individuals with developmental disabilities in need of service.
In a modern system of corporate governance, governors carry
fiduciary responsibility for the operation. There are not advocates
or stakeholders but trustees. They have authority given to them and
exercise that authority consistent with the mandate received.
Governors focus on the vision to be realized, the principles to be
followed in reaching that vision, the outcomes to be achieved and
the basis to measure and hold people accountable in the process.
Strong fiscal management, adherence to the rule of law, transparency
of decision-making and action, and clarity of role are cornerstones
of good governance.
In providing quality services to children, families and adults
with developmental disabilities, an area that involves considerable
complexity and resources, all of the expertise mentioned above is
Something needs to be said about stakeholders and
the role they may or may not play as governors. As a general rule,
if a stakeholder has significant conflict of interest with the role
of governor, the stakeholder is not a good candidate for governor.
It must be remembered that governors carry fiduciary responsibility
for the operation. They are not in a position of authority in order
to advocate their position or interest or that of others. If a
conflict of interest does arise, governors are expected to disclose
the conflict and either deal with it or remove themselves from
It is also important to ensure that the governors have an
understanding of those being served. For example, if many of the
children in care are Aboriginal, there should be a strong aboriginal
presence in governance. This is just common sense and fully
consistent with corporate governance practice. Governors need to
know how to direct and oversee an operation or business and this
includes, in the case of a service operation, a good understanding
of the people being served. That said, governors should not be
service providers to avoid conflict or interest.
Considerable work has been done on the readiness criteria to be
used to determine if a change in governance will be successful. The
operational readiness work was done by KPMG Consulting in August
2002 and is contained in Appendix 1. The main criteria to be met are
in the following areas:
- The governance framework including leadership and a service
- Financial management and administration;
- Human resources and labour relations;
- Information management;
- Performance management and quality assurance;
- Contract management;
- Stakeholder relations and public relations; and
- Risk management.
In addition to the operational readiness criteria outlined above,
there are four other criteria that must be met, as follows:
- Service transformation must be successfully underway;
- Budget stability for services to children and families must be
- An actual service delivery plan must be developed and approved
and this plan must demonstrate that on day one of new governance,
service will be delivered well; and
- A high level of trust must be established among the parties
involved in new governance.
The four readiness criteria mentioned above, plus operational
readiness criteria, should ultimately be used by a small panel of
experts, reporting to government, to assess the overall state of
readiness of the proposed Authorities.
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