1. 5/13/2010
What will we cover today?
1. What is ‘good governance’? How has governance evolved in
the club industry?
y
2. Why should clubs create a board charter?
3. What did IPART recommend?
4. Where should clubs communicate their board charter?
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2. 5/13/2010
Is there a definition?
• There is no express prescriptive legal obligation whether under the
Corporation Act 2001 or elsewhere under statute or common law to
effect good corporate governance.
Australian Institute of Company Directors
A t li I tit t f C Di t
Corporate governance is...
• “Doing the right thing and doing things right.”
John Ralston
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3. 5/13/2010
Corporate Governance directed by...
• NSW registered clubs derive direction from the
• Club Constitution
• Corporations Act 2001
• Registered Clubs Act 1976
• Liquor Act 2007
• Club Code of Practice
Club Code of Practice
• ClubsNSW Best Practice Guidelines
One Model: Carver's Policy Governance® model
Four areas of governance policy:
1. The Strategic Plan
2. Board and CEO Relationship
3. CEO Limitations
4. Governance Process
John Carver
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4. 5/13/2010
One Model: Carver's Policy Governance® model
Four areas of governance policy: Your reference documents:
1. The Strategic Plan • Club Code of Practice
2. Board and CEO Relationship • Best Practice Guidelines
3. CEO Limitations • Club Industry Guide
4. Governance Process
Reference documents
Your reference documents:
• Club Code of Practice
• Club Industry Guide
• Best Practice Guidelines
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5. 5/13/2010
1. The Strategic Plan
• Policies:
a) Mission
Mission
b) Values
c) Vision
d) Objectives
“All I’m saying is now is the
• Best Practice Guideline for Board
time to devise the technology to
Operation 15: Strategic Planning deflect an asteroid.”
2. Board and CEO Relationship
• Policies:
a) Delegation to the
Delegation to the
CEO
b) CEO Role
c) Monitoring CEO
Performance
“So tell me again… how are you going
d) CEO Compensation to keep the peas hot this year?
year?”
• Best Practice Guideline for
the Remuneration of Club
Executives
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6. 5/13/2010
3. CEO Limitations
• State what cannot be done
• Club Code of Practice – Financial management & Reporting (#45)
• The board will establish boundaries and limits regarding
a) Capital investments
b) Remuneration and benefits
c) Protection of assets
d) Tendering
) g
e) Cost containment
f) Efficient use of labour
4. Governance Processes
• Policies:
a) Governing structure
Governing structure
b) Board role description
c) CEO’s role
d) Code of Conduct
e) Committee principles
)
f) Cost of governance
g
• Best Practice Guideline for Board Operation
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7. 5/13/2010
Corporate Governance Policy Contents
1. The Strategic Plan 3. CEO Limitations
a) Our vision a) Capital investments
b) Our mission b) Remuneration and benefits
c) Our values
) c) Protection of assets
)
d) Our objectives d) Tendering
e) Cost containment
f) Efficient use of labour
2. Board and CEO Relationship 4. Governance Process
a) Delegation to the CEO a) Governing structure
b) CEO Role b) Board role description
c) Monitoring CEO Performance
) g c) CEO’s role
)
d) CEO Compensation d) Code of Conduct
e) Committee principles
f) Cost of governance
New information
• What new information is available on Corporate Governance for clubs?
“What policy?”
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8. 5/13/2010
Independent Pricing And Regulatory Tribunal
(IPART)
• Structure the board to add value
– effective composition, size and commitment
• IPART recommendations:
– Remove constitutional restrictions
– Appoint directors
– Succession policy
ASX Principles
• Play a role in board succession planning
• Nomination committee chaired by Chair
Nomination committee chaired by Chair
• Assess competencies required, review succession plans, evaluate
board’s performance and recommend candidates
• Evaluate the range of skills, experience and expertise on the
board
• Develop a formal and transparent application and election
procedure to promote member understanding and confidence
d t t b d t di d fid
ASX Principles (2007) Recommendation 2.4
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9. 5/13/2010
ASX Principles
• Letter of appointment for directors
• Term • Induction
• Time commitment • Professional development
• Power and duties • Independent advice
• Special duties (if any) • Indemnity and insurance
• Vacancies • Confidentiality
• Committee work
• Remuneration and expenses
p
• Disclosure
• Fellow directors
ASX Principles (2007) Recommendation 1.1
Board Charter
• Where does the Board Charter fit in?
• The document summarises the role, responsibilities, policies and
processes of the Board and comments on the Board’s approach to
corporate governance.
• It can be supplemented by the Board Code of Conduct.
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10. 5/13/2010
Example Board Charter - Qantas
1. Overview 12. Responsibilities of the CEO
2. The Constitution 13. Written Resolutions
3. Compliance with Laws 14. Code of Conduct and Ethics
4. Composition of the Board 15. Continuous Disclosure Policy
5. Duties and Responsibilities 16. Financial Results
6. Committees 17. Communications Policy
7. The Chairman 18. Annual Report
8. Independence of Directors 19. Corporate Governance Website
9. Access to Information and 20. Notice of Meeting
Independent Advice
d d d i 21. External Auditor
10. Appointment and Removal of
Directors
11. Director Protection Deeds
Communicate
• Publicise your Board Charter
• Members and nominees (as part of pre‐nomination training)
• Sub‐clubs, contractors and suppliers and organisations
benefitting from club sponsorship and donations
• Financial institutions
• Management and staff
Management and staff
• Encourage pride in the club and right fit
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