Setting the strategic direction
Your board sets your entity’s strategic direction in the strategic plan.
To begin this process, it’s helpful to:
- define your entity’s purpose and mission in line with its functions, laws and government policies
- identify the aims, objectives and strategy that will help your entity achieve its purpose and mission
- consider any relevant ministerial statements of direction and ensure compliance with their requirements
- analyse your entity’s environment and resources, over the medium to long term
- identify opportunities, risks, threats and choices.
It can also be useful to seek an external perspective on the work of your entity, for example from your portfolio department or a key stakeholder.
Your board or entity management can then develop a plan that:
- says what your entity is doing or planning to do and how this will be measured
- takes account of the longer-term operational environment and government objectives
- sets risk appetite
- sets annual budget
- holds itself accountable for delivering against high-level objectives.
If you get your entity’s management to develop the plan, your board must be satisfied it meets your strategic priorities.
Once you develop the plan, your board needs to ensure its decisions are in line with the direction it sets.
Your board also needs to review the plan regularly and update it if needed.
Board meetings
Your board must meet regularly to:
- set strategy and monitor progress
- identify risks and how these are being managed
- review operational matters, including organisational culture and behaviour
- ensure compliance with laws and regulations
- make decisions within its power
- review reports from sub-committees.
Agendas
Your chair needs to prepare or approve an agenda for each board meeting. Your chair may approve the agenda in consultation with your CEO or entity board secretary.
Your board may want to use an annual board agenda to plan its activities for the year.
This can help the chair approve agenda items for individual meetings.
Use our templates as a guide you can adapt to suit your needs:
Minutes
Your board needs to create official records of your meetings in the form of minutes.
Use our template as a guide you can adapt to suit your needs:
Meeting procedures
Your board can set out its procedures for decision-making in a policy or charter.
This may include specific requirements from the law or documents that established your entity. For example, the quorum your board needs to make a decision.
It’s also good practice to have the chair ask directors to declare any conflicts of interest related to agenda items in your meetings. This can be a standing agenda item at the start of each board meeting.
Other important meeting procedures include:
- a carefully prepared agenda
- papers in an agreed format, listed against agenda items
- draft minutes of the previous meeting for approval by the board, with any actions clearly marked and followed up
- frank and open discussion, with all reasonable questions from directors answered
- the ability to seek information and advice from employees and external parties where needed, although decision-making rests only with your board.
Board director behaviour
Board directors should always act in a manner consistent with the public sector values and Code of Conduct for Directors of Victorian Public Entities.
As a board director, you must read all agenda papers before the meeting so you're able to discuss each agenda item.
You should avoid distractions during the meeting. For example, ask people not to use their phones or computers while someone is speaking.
Prior to making a decision, your board needs to:
- gather and consider all relevant information
- consider all options
- understand the full implications your decision will have, such as strategic, financial and community impacts.
Keep an open mind and listen to and respect the views, experience and knowledge of other board members.
Try to reach consensus with your board's decisions. If you can't, the chair needs to ask everyone to vote.
All directors are bound by the decision the board makes.
Where the vote is split, it's good practice for the chair to recap the discussion and decisions so each director can articulate the board's position.
Forming committees
A committee is a group your board sets up to work on specific tasks.
For example, you could have:
- ongoing committees, such as for remuneration or risk
- temporary committees, such as to oversee a major project of your entity.
Your board must set up an audit committee under the Financial Management Act.
A committee can help your board distribute its workload, analyse information and recommend options to your board.
A committee's work must not compromise your board's ability to make decisions.
Your committee must present significant issues that emerge as part of their work to the full board for discussion and decisions.
Committee members should include directors from your board and may include subject matter experts or advisers, but not entity employees. Committee members should have the skills and expertise relevant to the committee’s area of work.
Employees can attend if needed though, for example, to provide information to support the committee's work.
Each committee needs to appoint a chair. Ideally, this would be someone other than the chair of your board to give other board members the opportunity to chair.
Don’t set up too many committees. This may fragment your board and increase your workload.
For example, small entities may have no committees, while large entities may have 2 to 4.
If your board sets up a committee, make sure it has:
- a charter with clear terms of reference
- procedures for agendas, minutes and reporting to the board.
Use our template as a guide you can adapt to suit your needs:
Delegations
A delegation is when your board authorises another party to exercise your board’s powers or functions.
A board can delegate some of its powers to other parties.
For example, it’s common for boards to authorise entity employees to perform financial transactions up to a certain dollar amount.
But even if your board delegates its powers, you can never delegate your accountability.
Your board is accountable for all its decisions, even those made under delegation.
If your board is allowed to delegate its powers, you must ensure this is in line with the laws or documents that established your entity.
Consider:
- Are there limits on your board’s ability to delegate?
- Who can your board delegate to?
- What legal procedures does your board need to follow to ensure your delegation is valid, such as a document called an instrument of delegation?
Your board must formally decide to delegate its powers.
To do this, your chair must sign an instrument of delegation on behalf of the board.
Your board must record this decision in its meeting minutes. Delegation decisions should be clearly documented in any committee's charter.
Ensure your board gets regular reports on the use of its delegations so you know they’re being used as intended.
Review and update all delegations regularly.
Access our template:
Policy and culture reviews
Your board needs to conduct a regular review of your entity’s:
- policies
- codes
- delegations
- authorisations
- internal risk controls
- results of employee, culture or engagement surveys, such as the People matter survey.
Some policies may need to be reviewed more regularly than others.
Consider the results of your reviews and make adjustments where needed.
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