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Chapter 1: What is Good Governance?

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How is good governance different to the RO Act requirements?
Why do I need to care about good governance?

Good governance is a concept that means many 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:

  • leadership
  • accountability
  • transparency
  • compliance
  • trust
  • integrity
   
  • efficiency 
  • consistency
  • effective use of resources
  • improvement
  • 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 organisations themselves 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 just the requirements of the Fair Work (Registered Organisations) 2009 Act (the RO Act).

How is good governance different to the RO Act requirements?

Good governance is about good processes and procedures. In many ways, the RO Act tries to instil good governance by encouraging transparency, provision of documents to members, keeping accurate records and officers’ duties, but good governance goes one step further. It is 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:

  

     

The RO Act requirement

      

Good governance steps
           
 
Financial report
     The financial report must be provided to members  
  • ensure you present the report in a way that can be practically and easily accessed by members 
  • ensure the report is accessible to people with different abilities
  • when there is a new project or change, consider including explanatory material so members can properly understand what they’re reading
 
Discussion
   The financial report must be presented to a meeting  
  • understanding that providing access to members will allow them to read it thoroughly and consider any questions they may have
  • consider bringing in an expert like your accountant or auditor to explain difficult parts or big changes from last year
  • encourage questions and debate, seek alternative views
 
Person
   The auditor must be permitted to attend meetings at which the financial report is presented  
  • take steps like actively arranging for your accountant and/or auditor to be present to explain particular aspects of the finances, including difficult concepts or significant changes from last year

 

Why do I need to care about good governance?

Because you want to do the 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.

  

     
Ideas
      

Big concept, small steps

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 all bring you closer to more effective, efficient compliance. 

And these small things can result in changes in the organisation’s culture, with a flow-on to improved compliance and governance.

 

Go back to:
Good Governance Guide introduction
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Next chapter 2:
Developing a ‘speak-up’ culture