Good governance is a concept that means different things to different people.
In this guide, the Commission has taken good governance to mean the routine, everyday procedures, systems and processes that organisations can put into place to ensure they achieve best practice when it comes to:
- effective use of resources
- member engagement
- accurate and truthfully-based financials.
Good governance creates a culture that encourages an organisation and its officers to aim to achieve the best for its members while minimising risks of non-compliance, misconduct, and incorrect use of members’ money.
Both members of registered organisations and their members rely on their officers to provide stewardship and oversight of their organisations and to have the resolve to take steps to deal with any problems if and when they arise.
Adopting good governance structures and practices that promote professionalism and accountability is the key to developing a culture of good governance in an organisation.
Good governance is more than the requirements of the Fair Work (Registered Organisations) 2009 Act (the RO Act).
Good processes and procedures
Good governance is about good processes and procedures. The RO Act instils good governance by:
- encouraging transparency
- provision of documents to members
- keeping accurate records
- officers’ duties.
Good governance goes one step further. It's the culture of compliance your organisation adopts to ensure it meets those requirements under the legislation and the organisation’s rules, while aiming to achieve best practice.
A good example is your organisation’s financial report. The below examples show the difference between simply meeting the requirements of the RO Act and having good governance processes in place.
|RO Act requirement||Good governance steps|
|Provide financial report to members||
|Present financial report to a meeting||
Auditor must be permitted to attend meetings at which the financial report is presented
|Actively arrange for your accountant and auditor to be present to explain particular aspects such as difficult concepts or significant changes from last year|
The importance of good governance
Good governance is about doing what's best by your members.
You need to comply with the requirements of the RO Act, the rules of your organisation and your internal policies. Quite often, understanding and implementing these requirements involves resources, limited time and sometimes different people.
Good governance may seem like a big concept, but it can be implemented through little everyday changes to existing processes. Small things like putting agendas out early for meetings, appreciating difference, creating new forms - these can bring you closer to more effective and efficient compliance.
These small things can result in changes in the organisation’s culture, with a flow-on to improve compliance and governance.