Board governance policies

Introduction

It is important that each board has a regularly reviewed set of policies that provide a framework for its governance role. Crown-connected entities have a number of requirements best expressed in policies as a consequence of the Crown Entities Act 2004, the entity’s enabling legislation and other requirements such as deeds of trust.

The Public Eye

In the last decade there have been a number of high profile cases that have highlighted the need for comprehensive and robust board policies. The Auditor General’s report into the expenses treatment of the chair of three public entities, Dr Ross Armstrong, the similar inquiry into expenditure of organisations related to Donna Awatere – Huata MP and the State Services Commission review of chief executive credit card expenditure are all examples of the high public focus these issues have. Ministers have an expectation that boards will have appropriate practices in place.

What should policies cover?

This will depend on the nature of the board but a policy manual could include:

• Board’s terms of reference;
• Code of Conduct;
• Policymaking protocol;
• Chairs/board members’ role description;
• Board member induction;
• Conflict of Interests / Duty not to disclose information;
• Meetings protocols;
• Board committees;
• Board remuneration and expenditure;
• Sign off authorities; and
• Board / chief executive linkage.

Appendix

Web links

• The Office of the Auditor General undertook a very important review in respect to the Chair of 3 entities. It raises relevant issues to be addressed in appropriate board policies: www.oag.govt.nz/2003/armstrong/
• A very useful bibliography of best practice expectations in the public sector has also been compiled by the Office of the Auditor General and is at: www.oag.govt.nz/2005/twoa/appendix2