corporate governance in arms-length agencies (july 2009) · 2018-03-29 · on the other hand,...

Corporate Governance In Arms-Length Agencies ndash An International Overview

July 2009

Full Version Simplified Version Options of Red

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EFFICIENCY UNIT VISION AND MISSION

Vision Statement

To be the preferred consulting partner for all government bureaux and departments and to advance

the delivery of world-class public services to the people of Hong Kong

Mission Statement

To provide strategic and implementable solutions to all our clients as they seek to deliver people-

based government services We do this by combining our extensive understanding of policies our

specialised knowledge and our broad contacts and linkages throughout the Government and the

private sector In doing this we join our clients in contributing to the advancement of the community

while also providing a fulfilling career for all members of our team

This brief was researched and authored by the Research Division Institute of Public Administration Ireland( wwwipaieresearch) The Research Division provides applied research services for policy

makers in a wide range of public service organisations drawing on an extensive network of contacts

and experience gained over more than thirty years

Other Efficiency Unit Documents

The Efficiency Unit has produced a number of guides on good practice on a wide range of areas

including outsourcing and contract management These may be found on the Efficiency Unit website

at wwweugovhk

i

Corporate Governance in Arms-Length Agencies ndash An International Overview


0c 100m 100y 0k

ii

Foreword

Corporate governance means different things to different people Whilst it is an evolving concept in

the public sector as much as in the private sector it is not a strict science It is more than financial

accountability yet it is not the same as lsquoGovernancersquo the latter has a much broader scope

In Hong Kong unlike many other jurisdictions most government departments still follow the traditional

vote-funded model and are subject to a comprehensive regime of controls and accountability that

has been built up over many years

On the other hand concerns have arisen over the corporate governance of non-government bodies

We have therefore devoted this issue of our public sector reform series to an overview of the

challenges faced in other countries concerning corporate governance in arms-length agencies

We hope the overseas experiences related here will contribute to the debate on the most appropriate

way forward in Hong Kong

Head Efficiency Unit

July 2009



0c 100m 100y 0k

Contents

Executive Summary 1

1 Corporate governance in the public sector definitions and developments 5

What does corporate governance mean

Why has corporate governance come to prominence

Particular challenges for corporate governance in the public sector

What does corporate governance encompass

2 Standards of behaviour 13

Corporate governance codes of good practice

Codes of conduct

Leadership developments

3 Organisational structures and processes governing body 19

Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

iii

4 Control 27

Risk management

Audit

5 External reporting 31

The need for transparency

Balancing transparency with confidentiality

6 Conclusions 33

References 34



0c 100m 100y 0k

1

Executive Summary

The importance of corporate governance lies in

its contribution to accountability The issue of

corporate governance has grown in prominence

in recent years largely in response to a number

of financial scandals in the private sector such as

the Enron collapse in the United States of America

(USA) More recently the collapse of Lehman

Brothers Holdings plc which has precipitated

and contributed to financial downturns globally

has drawn attention to the consequences of

weak controls

There has also been increased international public

concern over the governance and accountability

of public sector organisations arising from cases

of fraud or mismanagement or concerns over the

perceived absence of accountability of agencies

The public outrage at the abuse of the expenses

regime for parliamentarians at Westminister while

not a failure of corporate governance as such

highlights the issue of standards of behaviour which

is of central concern to corporate governance

Failure to adhere to good standards of behaviour

can lead to failures in corporate governance

such as misuse of public assets or resources

for personal or political purposes or failure to

exercise reasonable stewardship over public

assets or resources

A good definition of corporate governance in the

public sector states that

Broadly speaking corporate governance

generally refers to the processes by which

organisations are directed controlled and

held to account It encompasses authority

accountability stewardship leadership direction

and control exercised in the organisation

(Australian National Audit Office 1999)

Corporate governance can be more challenging

in a public sector environment than in the private

sector The challenges include policy is set by the

government board members may be selected by

ministers ministerial directions can countermand

the wishes of the board at any time and chief

executive officers may be formally employed by

the minister creating accountability problems

for the board

The focus of this report is on the corporate

governance of organisations at arms length

from government ie those bodies outside of

government departments or ministries such

as statutory agencies and publicly funded

non-governmental organisations (NGOs) In

particular the focus is on the functioning of the

governing board of the organisation Even where

a board may not exist there is usually a governing

body responsible for leadership and reporting on

stewardship

There are a number of common problems that

can lead to corporate governance failures

Figure 1 shows seven warning signs of service

failure Governing body members and relevant

staff in sponsoring departments need to give

particular attention to these signs

What does corporate governance cover

The International Federation of Accountantsrsquo

(IFAC) guidance that has been adopted in many

countries identifies four main dimensions of

the corporate governance of public sector

organisations (Figure 2)



0c 100m 100y 0k

Figure 1 The seven warning signs of service failure

2

Analysis of public inquiries shows these common problems contributed to serious service failures

Source Audit Commission of the United Kingdom

Figure 2 Dimensions of good corporate governance

Good Corporate Governance

Standards of Behaviour

bull codes of good practice

codes of conduct

leadership developments

bull

bull

bull

bull

bull

bull

Organisational Structures and

Processes

bull board dynamics


Control

risk management

audit

External Reporting

need for transparency balancing transparency with confidentiality


0c 100m 100y 0k

3

Standards of behaviour Standards of behaviour are important to corporate

governance as they establish how the leadership

operates the values that drive the organisation

and the culture that prevails As such standards of

behaviour deal largely with what has been termed

the lsquosoftrsquo attributes of corporate governance

Governments internationally have adapted private

sector codes of practice and codes of conduct

to provide guidance for board members and

executives on these issues

Leadership is another crucial principle from a

corporate governance perspective There are two

key leadership roles that the governing bodies

of public organisations need to pay attention

to the establishment of sound governance

structures and processes and supporting good

governance through their own performance and

behaviours

Organisational structures and processes There are eight issues to be addressed by governing

bodies and their sponsoring departments if they

are to deliver good corporate governance in

terms of effective responsibility and accountability

(Table 1)

Control For public organisations other than financial

risk their work is also subject to a much

broader category of risks including policy risk

and reputational risk Risk management means

addressing these factors What is now required by

many codes of practice of corporate governance

is to ensure that risk is explicitly stated and a

consensus on addressing risks formulated

A particular dimension of risk management directly

applicable to the governing bodies of public

organisations is the management of conflicts

of interest which can significantly impact on

reputational risk There is no prescriptive set

of rules specifying what constitutes ethical

behaviour Decision-making should be guided

by the principles of integrity honesty transparency

openness independence good faith and

service to the public which underpin most

corporate governance codes of practice

Audits and inspections become a normal

part of life in public organisations An issue of

concern for the governing body of many public

organisations is the choice of external auditors

and the need to ensure auditor independence In

that context auditor rotation is becoming more

common Another feature of good corporate

governance is the use of audit committees by

public organisations to provide an oversight of

audit arrangements

External reporting Transparency is a fundamental element of good

corporate governance Public sector organisations

rely on the continuing support and confidence of

their stakeholders who in turn need to be assured

of the quality and ethical standards of public bodies

with which they deal Transparency in relation to

matters such as procurement remuneration and

disclosure must be exemplary

In practical terms transparency in relation to

reporting on performance and on future intentions

and plans is achieved in a number of ways

including public and timely production of plans

and reports Sponsoring departments need to

ensure that they have the skills and competencies

required to critically evaluate such plans and

reports

There are challenges in terms of discharging duties

in a transparent manner whilst simultaneously

protecting business or organisation sensitive

information The need for codes and practices to

acknowledge the tension between confidentiality

and transparency and to strike a balance between

these competing tensions requires constant

scrutiny It is important that governing bodies

periodically scrutinise their organisationrsquos guidance

and practice with regard to striking a balance

between transparency and confidentiality



0c 100m 100y 0k

Table 1 The eight key issues on board structures and processes

Board size Six to nine members is considered a reasonable size in the private

sector Up to twelve is not uncommon in the public sector to

meet representational and balance requirements

Board committees Commonly used for detailed oversight and supervision of areas

of special risk critical to success

Board appointments Board selection and composition are vital elements in securing

effective boards Identifying competencies needed pro-active

search for candidates and attention to personal attributes are

amongst the items that must be given attention

Board tenure There is no set term limit for boards though three years is a

common time in a number of countries Appointments may be

renewed for a second term subject to satisfactory performance

Staggering of replacement appointments is important

Board development There is a need for board induction and continued review of

training needs and also to ensure that those involved in the

appointment of board members are fully trained

Board performance Best practice suggests that formal annual assessment of board

performance between the minister sponsoring department

and the chair of the board should take place to review board

performance

Board composition Best practice guidance suggests that the majority of board

members should be independent and that the chair and chief

executive positions should be separate There is a growing view

that departmental staff should not be members of the board

Board remuneration Practice varies significantly Many smaller public bodies tend

to pay only out-of-pocket expenses Others pay a set amount

based either on a daily rate or an estimated time commitment

per month or per year In general remuneration is relatively

modest

Source adapted from Uhrig (2003)


4


0c 100m 100y 0k

5

1 Corporate governance in the public sector definitions and developments

What does corporate governance

mean Corporate governance is a concept that has been

very much to the fore in public sector reform in

recent years Understanding how to ensure and

achieve best practice in corporate governance

presents significant challenges for public sector

organisations internationally But what does the

term corporate governance mean

Corporate governance has its origins in the

marketplace and emerged to describe the way

in which suppliers of finance to corporations

could assure themselves of getting a return on

their investment In this sense it is about ensuring

that the management of private organisations

operate and run their businesses in a manner

consistent with the wishes of the shareholders

and that mechanisms for identifying and arresting

malpractice are in place and effective (Bovaird

and Loumlffler 2009 9)

Within the public sector when corporate

governance is discussed the main focus and

the focus of this report is often on the corporate



government departments or ministries (which are

usually well regulated by specific rules and statutes)

such as statutory agencies and publicly funded

NGOs In this context corporate governance has

become associated not only with financial reporting

and controls but also with standards of behaviour

and organisational structures and processes In

this report we understand corporate governance

in the public sector by reference to the Australian

National Audit Office which states that

Broadly speaking corporate governanc e






(Australian National Audit Office 1999 1

httpwwwanaogovauuploadsdocuments

Corporate_Governance_in_Commonwealth_

Authorities_and_Companiespdf)

Within private sector organisations corporate

governance is often viewed as being primarily

concerned with the functioning of the board of

the organisation In the different parts of the public

sector the equivalent of the group that fulfils the

role of the board of a company in the private

sector is at times not so easy to identify

But as the IFAC (IFAC 2001 para 019

httpwwwifacorgMembersDownLoads

Study_13_Governancepdf) notes

In whatever way it is configured constituted

or described all bodies need to have at their

head a group which is responsible for giving

leadership and strategic direction defining

control mechanisms and supervising the overall

management of the entityrsquos activities and

reporting on stewardship and performance



0c 100m 100y 0k

It is this leadership or government grouping

referred to in this report either as the governing

body or the board which is the main focus for

corporate governance in the public sector For

some public organisations the governing body

is relatively obvious as with the board of an

agency or a two-tier board structure where a

non-executive supervisory board oversees an

executive management board But for other

public sector organisations the role played by the

governing body in corporate governance may not

be clear as the case study of Canadarsquos National

Research Council governing council shows

Case study Role of governing council is unclear

As part of a review of the National Research Council Canada in 2003 the Office of the

Auditor General examined the role of the National Research Council governing council Its

findings revealed a lack of clarity among governing council members about the role of the

governing council whether it was simply advisory in nature to the president or whether it

included the obligation to direct and control the work of the corporation through the president

The governing council was found to be operating primarily as an advisory body The Auditor

General was concerned about this apparent lack of clarity and believed that it has led to the

absence of key governing council governance initiatives and structures

In a follow-up review in 2007 the Office of the Auditor General noted satisfactory progress on

this issue as the council had given itself a stronger role to meet the assigned responsibilities

under the National Research Council Act It had also established two new standing committees

the audit evaluation and risk management committee and the human resources committee

Source Office of the Auditor General of Canada 2007 httpwwwoag-bvggccainternetEnglish att_20070203xe03_e_17507html

6



0c 100m 100y 0k

7

Why has corporate governance come

to prominence Interest in corporate governance has been driven

primarily by a growing list of corporate scandals

in the private sector such as the Enron collapse

in the USA The problems have to do with the

pursuit of private interests (excessive compensation

of top executives overly generous benefits)

duplicity (failure to observe accepted standards

of accounting the disguising of transactions)

conflict of interest (accounting firms too close

to client corporations) and corruption in various

other forms These issues have focused interest

on a number of corporate governance issues

such as the role of the board of directors the

independence of the boardrsquos membership

from management the responsibilities of the

board chair the chairrsquos relationship to the chief

executive and the transparency and accuracy

of financial reporting (Plumptre 2004 pp 2ndash3)

More recently the collapse of Lehman Brothers

Holdings plc in the USA which has precipitated


has drawn attention to the consequences of weak

controls In a public sector setting the public

outrage at the abuse of the expenses regime for

parliamentarians at Westminister while not a failure

of corporate governance as such has highlighted

the issue of standards of behaviour which is of

central concern to corporate governance

Three sources for new practices and codes of

corporate governance are dominant internationally

in response to these scandals ndash the United

Kingdom (UK) Organisation for Economic

Cooperation and Development (OECD) and the

USA In the UK following a number of private

sector corporate governance scandals the

Committee on the Financial Aspects of Corporate

Governance (the Cadbury Committee) was formed

in 1991 to investigate The resultant Cadbury report

developed an innovative lsquoCode of Best Practicersquo

and identified three fundamental principles of

corporate governance ndash openness integrity and

accountability A lsquocombined codersquo was developed

in 1998 which harmonised the key issues from

Cadbury with a number of subsequent reports The

lsquocombined codersquo was binding on all companies

quoted on the London Stock Exchange It has

been revised on a number of occasions The most

recent version of the Code is available at http

wwwfrcorgukdocumentspagemanagerfrc

Combined20Code20June202006pdf

The OECD has also been active in relation to

promoting good corporate governance and

published a series of Principles of Corporate

Governance in 1999 Following a comprehensive

survey of how member countries addressed the

different corporate governance challenges they

faced the Principles were revised in 2004 see

httpwwwoecdorgdataoecd321831557724

pdf

In the USA following the widely reported

accounting scandals at energy company Enron

and telecommunications company WorldCom

the federal government sought to pass laws

which would prevent in future the fraudulent

reporting of accounts in private companies The

Sarbanes-Oxley Act of 2002 extended boardsrsquo

financial oversight responsibilities and imposed

new financial disclosure requirements In particular

it requires that management prepare a report on

the internal control structures and procedures for

financial reporting in their organisation as well as

a report by external auditors on that assessment

see httpwwwsoxlawcom

While private sector examples of corporate

governance failure have been driving improvement

initiatives at an international level there have also

been an increasing number of such failures within

the public sphere which have prompted reviews of

corporate governance practices and procedures



0c 100m 100y 0k

in the public sector Public sector scandals

have been a driving force for the increasing

focus on corporate governance in the public

sector So too has the increasing complexity

of stakeholder relationships and expectations

regarding performance and transparency leading

to demands internationally for more effective

corporate governance arrangements in the public

sector to help agencies steer their way through

complex stakeholder demands Also changing

trends in the way the public sector conducts its

business and in particular regulatory and standard-

setting practices are increasingly requiring public

organisations to adopt best corporate governance

standards

The use and stewardship of public funds is an

essential feature of corporate governance in the

public sector As the lsquoFast Ferry Fiascorsquo case study

identifies boards of public sector bodies carry

considerable responsibilities for the management

of public funds and must ensure they have the

ability to fully pursue matters they deem to be of

concern Similarly the Royal United Hospital Bath

case study shows how boards can be misled

by executive management unless they have the

necessary competencies and skills to rigorously

scrutinise performance

Corporate governance failures can result in

wasted public money or poor service experience

and in some cases may even result in serious

tragedies The UK Audit Commission analysed

a number of inquiries into failures to see what

contribution governance arrangements made

to organisational failure as the case study on

page 11 identifies

Case study Royal United Hospital Bath corporate governance failures

Professor Robert Tinston was appointed by the trust in 2003 to hold an inquiry after two

external reviews identified concerns about deliberate manipulation of waiting lists and serious

deterioration in finances at the trust The Tinston report describes lsquoa trust in the grip of a powerful

self-delusion about its real performance and the desire to continue to support this leading to

a culture of misrepresentationrsquo

In particular the report noted major corporate governance failures The inquiry noted that the

former executive team appears to have adopted a policy of marginalising the trust board or

at the very least presenting important information at board meetings in an unduly optimistic

and favourable way The report says the trustrsquos weak control and accountability arrangements

combined to undermine fundamentally the performance of the hospital Boards must be in a

position to challenge constructively the financial and operational information they receive This

means they must understand the information presented to them and its implications for the

organisation They must also be able to identify risks to their corporate objectives recognise the

financial consequences and assess and monitor how effectively they are being addressed

Source httpwwwhsjcoukruh-bath-was-delude-claims-probe19369article


8


0c 100m 100y 0k

Case study Board failure the example of the lsquoFast Ferry Fiascorsquo

In British Columbia (BC) the lsquoFast Ferry Fiascorsquo is an example of how the role of boards can

have major impacts on organisational performance The facts of the Fast Ferry Project are

fully documented in the BC Auditor Generalrsquos 1999 report A Review of the Fast Ferry Project

Governance and Risk Management

The government decided to purchase three high-speed aluminium catamaran car ferries at an

initial estimated cost of $210 million The initial board appointed to oversee the construction

included three independent directors from the private sector with relevant skills and experience

in marine construction Over the first ten months of its operations the board

bull

bull

bull

bull

bull

bull

asked repeatedly for a full budget

asked to receive regular reporting against an approved budget showing both forecast costs to complete and variances

asked for a construction schedule

pointed out that the original budget was for a different type of ferry and questioned both that budget and the latest changes to it

stressed the need for a risk analysis of the current scope of the project

noted that forecast costs continued to rise and that the scope of the programme had increased without an increase in budget

Its requests were consistently ignored or only partly met with the result that the board resigned

A new board was appointed The governance systems put in place to oversee the project were

inadequate Two years later it was determined that the project was significantly over budget

(the final cost was more than $450 million) and the ferries were not suitable for their intended

use Eventually the ferries were shrink-wrapped in plastic and stored under wraps for several

years until they were sold by auction for $18 million The net loss to the taxpayers of BC was

$430 million not including the cost of all of the reports and lost productivity in responding to

public outrage at the debacle The fiasco became a lightening rod for discussions on the lack

of appropriate governance

Source Watson 2004 pp 3ndash4 httpwwwiveybusinessjournalcomview_articleaspintArticle_ID=473

9



0c 100m 100y 0k

bull

Particular challenges for corporate

governance in the public sector The Auditor General of Western Australia provides

a useful summary of the particular constraints

acting on public sector boards with regard to

corporate governance (Office of the Auditor

General Western Australia 1998) He notes that

in the private sector the board sets the strategic

direction management gives effect to that direction

and shareholders provide support through their

investment and operate as a general check on

the performance of the organisation While there

can be grey areas between the various roles

particularly between the board and management

the relationships are not as complex as in the

public sector

In the public sector the government is responsible

for the setting of policy and usually has wide

powers to intervene Management is responsible

for the day-to-day running to provide effective and

efficient services in the pursuit of government policy

The ultimate lsquoshareholdersrsquo are the electorate

who have infrequent opportunities to vote and

no direct authority over the affairs of any single

agency The public sector board often finds itself

balancing between managing an agency and

setting strategic direction Similarly management

finds itself balancing between a board that is

responsible for the agencyrsquos performance and

a minister responsible for the portfolio These all

make corporate governance more challenging

in a public sector environment The challenges

include

bull

bull

bull

bull

bull

policy is set by the government

board members may be selected by ministers

ministerial directions can countermand the wishes of the board at any time

chief executive officers may be formally employed by the minister which creates accountability problems for the board

the board as the accountable authority carries the legal responsibility for the performance of the agency

The remainder of this report looks at how such

challenges can be managed In brief a review of

good practice by Barker (2004) suggests that the

governing body and the sponsoring department

need to be clear about the organisationrsquos remit

and position and in particular that

bull

bull

bull

bull

bull

bull

the organisation has a clear remit and set of

strategic priorities the organisationrsquos position within the delivery

network is clearly understood

changes in strategiespriorities are rapidly

communicated between the sponsor

department and the organisation

consultation between the organisation

sponsor department and key stakeholders

takes place as appropriate prior to any

significant policy change

effective communications between the

organisation sponsor department and key

stakeholders are in place

regular review of the organisation occurs to

ensure that governance is effective and that

remits and relationships evolve in line with

organisational and policy change

What does corporate governance encompass The IFAC (IFAC 2001 para 066 httpwwwifac orgMembersDownLoadsStudy_13_Governance pdf) identifies four main dimensions of the corporate governance of public sector organisations

standards of behaviour ndash how the

management of the organisation exercises

leadership in determining the values and

standards of the organisation which define

the culture of the organisation and the

behaviour of everyone within it

organisational structures and processes ndash

how the board and top management within

organisations are appointed and organised

how their responsibilities are defined and

how they are held accountable

bull


10


0c 100m 100y 0k

bull control ndash the network of various controls

established by the top management of the

organisation to support it in achieving the

organisationrsquos objectives and compliance

with applicable laws and regulations and

internal policies

external reporting ndash how the top management

of the organisation demonstrates its financial

accountability for the stewardship of public

money and its performance in the use of

resources

bull

bull

bull

bull

bull

bull

bull

Elements of what is encompassed by these

aspects of corporate governance where there

have been notable developments in recent years

are outlined in more detail in Figure 3

These four dimensions of corporate governance

form the basis for the structuring of the rest of this

report Significant developments and examples

of international best practice in each of the four

areas are discussed further in the following

chapters

Case study Identifying corporate governance lessons from failures

Each of the national inquiry reports identified that poor governance arrangements set the framework

within which organisational systems and processes failed to detect or anticipate serious service

failures There was never a single failure or shortcoming in corporate governance that was solely

responsible for service failure Rather where there were serious and tragic outcomes it was

due to a combination of factors and an accumulation of governance failures

A number of common themes were brought to light by each inquiry

the poor quality or absence of leadership

poor decision-making and decision-making processes

inadequate systems and processes such as performance management

bull

lack of clarity in roles responsibilities and activities creating poor accountability

poor working relationships and dysfunctional behaviours

an insular organisational culture and poor focus on community and user needs

inadequate contingency plans or risk-management strategies to deal with

worst-case scenarios

Some combination of these factors was present at each failing organisation

Source Audit Commission 2003 p 28 httpwwwaudit-commissiongovuknationalstudieslocalgovPages improvementtrustpublicservicesaspx

11



0c 100m 100y 0k

Figure 3 Dimensions of corporate governance

Dimension Recommendations on governance

1 Standards of behaviour bull

bull

bull

Codes of good practice

Leadership

Codes of conduct

2 Organisational structures

and processes

bull

bull

Accountability for public money

Roles and responsibilities

bull Governing bodybull Chairpersonbull Executive managementbull Sponsoring department

3 Control bull

bull

bull I

Risk management including management of conflicts of interest

Audit

nternal control

4 External reporting bull

bull

Transparency

Confidentiality

Source adapted from IFAC 2001 p 14 httpwwwifacorgMembersDownLoadsStudy_13_Governancepdf


12


0c 100m 100y 0k

13

2 Standards of behaviour Standards of behaviour are important to corporate


of the organisation operates the values that drive

the organisation and the culture that prevails all

of which influence the behaviour of all staff As

such standards of behaviour deal largely with

the development of codes of practice and what

has been termed the lsquosoftrsquo attributes of corporate

governance which have been receiving more

prominence in recent years drawing on best

practice in the private sector (see case study)

Corporate governance codes of good

practice As new corporate governance codes extended

throughout the private sector commercial

state-owned enterprises sought guidance from

governments about equivalent standards In

response governments internationally adapted

private sector codes to provide guidance for

board members and executives on commercial

and non-commercial state bodies and agencies

These codes set the parameters for standards of

behaviour required for good corporate governance

of public organisations

Case study Addressing the lsquosoftrsquo attributes of corporate governance lessons from private sector practice

Research on corporate governance in the private sector has indicated that lsquohardrsquo attributes of

governance such as board independence are necessary but not sufficient There is a need

to pay attention to the lsquosoftrsquo side of governance focusing on behavioural dynamics Some

of the lsquosoftrsquo governance factors that appear to be important for performance in the private

sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull

A clarity in roles responsibilities and relationships between chief executive officer (CEO)

and chair directors and management directors and shareholdersstakeholders

Healthy chairCEO interface

Directors working as a team

Culture trust and open dissent

Right skills competencies and characteristics including lsquoindustrybusiness knowledgersquo

A good induction process and ongoing access to training

Leadership skills of the chair

Information flows

Regular evaluation of board performance

Source Edwards and Clough 2005 p 12 httpwwwcanberraeduaucorpgov-apspubIssuesPaperNo1_GovernancePerformanceIssuespdf



0c 100m 100y 0k

bull

bull

bull

bull

For example in Australia the government

developed its Governance Arrangements

for Australian Government Bodies in 2005

httpwwwfinancegovaufinancial-framework

governancedocsGovernance-Arrangementsshy

for-Australian-Government-Bodiespdf

Similarly in Canada the Treasury Board of

Canada Secretariat has produced guidelines for

lsquoCorporate Governance in Crown Corporations

and Other Public Enterprisesrsquo httpwwwtbs-sct

gccagov-gouventrepriseentreprise02-eng

asp

In Ireland the Department of Finance also

published in 2009 a revised and updated lsquoCode

of Practice for the Governance of State Bodiesrsquo

h t tp www f inance gov ie v iewdoc

aspDocID=5824

An example of the type of issue covered by codes

of good practice is given for building the relationship

between the board and chief executive in the case

study taken from the Canadian code

What all of these corporate governance codes

and guidelines have in common is a commitment

to ensuring there is

clarity over the roles and responsibilities of

government boards of state bodies CEOs

and external auditing bodies as well as the

relationship between them

clarity over the public policy objectives

expected of state bodies

adequate financial reporting and internal

controls

standards of behaviour that reflect values

of integrity honesty and probity and that all

actions taken within state bodies are in the

best interests of that organisation

Case study Canadian code of good practice guidance on building a relationship

In a Crown corporation the nature of the relationship between the CEO and the board is often

critical The board must work with the CEO to build a relationship of openness and trust

Position descriptions can assist greatly in the smooth functioning of these relations The board

of directors the chair and the CEO should develop position descriptions for the board the

chair and the CEO

Boards of directors in conjunction with the CEO should periodically review the allocation of

responsibilities between the board and management This review should focus on defining

and describing both the boardrsquos principal responsibilities and the limits to managementrsquos

authority

Source httpwwwtbs-sctgccagov-gouventrepriseentreprise02-engasp


14


0c 100m 100y 0k

15

Codes of conduct An important emerging feature of good corporate

governance practice internationally is the

development of written formal codes of conduct

by organisations that set out their obligations with

regard to corporate governance Like corporate

governance codes codes of conduct have

proliferated in recent years They identify the

behaviour expected of those to whom they

apply by articulating a coherent set of values

and a means of addressing maladministration

where it occurs (see Transport for London (TfL)

case study)

The Public Audit Forum (2001) sets out important

elements which it is expected most codes of

conduct will address

bull

bull

bull

bull

bull

bull

bull

bull

bull

outlines of expected professional and

personal behaviour

defined restrictions on business and political

activities (where appropriate)

criteria and procedures for declarations of

interests both business and political

definitions of conflicts of interest

a statement of the aims and values of the

body

statements of the obligations of the body

towards its customers staff community and

other interested parties

information about the bodyrsquos approach to

openness and arrangements for acquiring

information about its activities

procedures for raising complaints with an

independent body

definition of the dividing line between the role

and responsibilities of the governing body

and those of the executive staff

Source Public Audit Forum (2001) httpwww

public-audit-forumgovukproprietypdf

Particularly with regard to standards of behaviour

such codes of conduct are expected to

reflect the practice of the highest standards in

public life In the UK the Nolan Committee

(httpwwwarchiveofficial-documentscouk

documentparlmentnolannolanhtm) inquired

into standards of public life and established seven

principles of public life that have been widely

adopted internationally

bull

bull

bull

bull

bull

Selflessness Holders of public office should

take decisions solely in terms of the public

interest They should not do so in order to

gain financial or other material benefits for

themselves their family or their friends

Integrity Holders of public office should

not place themselves under any financial

or other obligation to outside individuals or

organisations that might influence them in

the performance of their official duties

Objectivity In carrying out public business

including making public appointments

awarding contracts or recommending

individuals for rewards and benefits holders

of public office should make choices on

merit

Accountability Holders of public office are

accountable for their decisions and actions

to the public and must submit themselves

to whatever scrutiny is appropriate to their

office

Openness Holders of public office should be

as open as possible about all the decisions

and actions that they take They should

give reasons for their decisions and restrict

information only when the wider public

interest clearly demands



0c 100m 100y 0k

bull

bull

Honesty Holders of public office have a duty

to declare any private interests relating to their

public duties and to take steps to resolve any

conflicts arising in a way that protects the

public interest

Leadership Holders of public office should

promote and support these principles by

leadership and example

Failure to adhere to such standards can lead to

the failures in corporate governance noted earlier

and in particular to

bull

bull

bull

failures of principles of fairness in the

treatment of staff suppliers or contractors

whether due to conflicts of interest or other

reason

misuse of public assets or resources for

personal or political purposes

failure to exercise reasonable stewardship

over public assets or resources

Case study Transport for London (TfL) code of conduct

TfLrsquos corporate governance code of conduct addresses the main principles of good corporate

governance by setting out a series of undertakings that TfL has committed itself to deliver

under five main headings

bull

bull

bull

bull

bull

Public focus

Structures and processes

Risk management and internal control

Service delivery arrangements

Standards of conduct

For example under risk management and internal control TfL amongst other things commits

that its annual report will contain an objective and understandable statement and assessment

of its risk-management system including systems of internal control and internal audit and

their effectiveness in practice

Source httpwwwtflgovukcorporateabout-tfl2876aspxPublicFocus

16



0c 100m 100y 0k

17

Leadership developments Leadership is a crucial principle from a corporate

governance perspective There are two key

leadership roles the governing body of public

organisations needs to pay attention to the

establishment of sound governance structures

and processes and supporting good governance

through its own performance and behaviours

A range of commentators such as Kalokerinos

(2007) note the central role of the chair of the

governing body in the leadership of public sector

organisations This includes the traditional duty

of ensuring the proper functioning of the board

and its meetings but also covers maintaining a

close relationship with the chief executive and

representing the authority to outside stakeholders

A study undertaken for the UK Public Services

Productivity Panel (Barker 2004) states that the

chair should

bull

bull

bull

bull

act as board team leader with an

understanding of what skills knowledge and

aptitudes the board needs

regularly carry out skills knowledge and

aptitude audits which may be relatively

low key and informal to help understand

the current board composition and provide

board members with further clarity about

their individual roles

act as board lsquoconductorrsquo fostering an

environment where dissenting voices can

be heard without damaging collective

responsibility

act as the interface between the board and

its executive team and the organisation and

its sponsor department

In terms of developing board membersrsquo leadership

skills knowledge and aptitude mentoring of board

members has been of growing prominence in

recent years (see case studies)

A particular leadership challenge for the chair is

managing the relationship with the chief executive

Chief executives are professionals with specific

training in their job Chairs often come to the

role with no or limited experience of chairing

The chair and chief executive may experience a

culture clash between a management approach

to a question and a laypersonrsquos approach They

may be talking about the same problem using

very different vocabularies and terms of reference

Chief executives and chairs may also have different

definitions of success and consequently may

end up working towards different goals The

development of a good working relationship with

an agreed common vision as to the organisationrsquos

purpose is the key to effective leadership of the

organisation



0c 100m 100y 0k

Case study Mentoring support for a young chair

Jamie Dear became chair of newly established charity Jacari in the UK in 2005 at the age

of twenty-three He availed of the opportunity provided by government-funded support for

mentoring of chairs to provide him with guidance on his new role He met with his mentor

three times over a couple of months lsquoOf all the development opportunities Irsquove experienced

this has made the most impact on mersquo said Jamie lsquoI couldnrsquot recommend it highly enoughrsquo

The mentoring provided reassurance that the issues facing Jamie and the board were faced by

others The mentor also provided invaluable technical input on governance and management

issues It helped clarify roles and functions

Source httpwwwncvo-volorgukgovernanceandleadershipid=9474ampterms=chairing

Case study Mentoring and board development

In a national development agency in the USA every new board member is assigned two

mentors ndash a veteran board mentor and a staff mentor Mentoring partners meet in person and

or virtually before and after each board meeting for the first year of board service The board

mentor introduces the new member to the issues and workings of the board The staff mentor

introduces the new board member to the organisational issues around current and future

operations The mentoring programme enables new board members to familiarise themselves

with standards of behaviour and practice in the organisation

Source httpwwwcommunitydevelopmentworksorgPortals12word_docsBoard20Articles Mentor20Your20Way20to20Board20Developmentpdf

18



0c 100m 100y 0k

19

3 Organisational structures and processes governing body

With regard to corporate governance issues around

organisational structures and processes the main

issues focus on the roles and responsibilities

of governing bodies and their accountability

processes A government-commissioned review

of corporate governance of statutory authorities

and office holders in Australia (Uhrig 2003)

identified six issues to be addressed in governing

bodies if they are to deliver in terms of effective

responsibility and accountability board size

committees appointments tenure development

and performance To these can be added board

composition and board remuneration

Board size Public sector boards tend to be large in size The

Uhrig report (Uhrig 2003) suggests that based

on current thinking on best practice in the private

sector a board of between six and nine members

(including a managing director if there is one)

represents a reasonable size Boards with less

than six members may have difficulty in meeting

their statutory responsibilities due to workload

pressures and the potential lack of breadth of

views This situation is likely to be exacerbated

in periods where vacancies exist There is also

the risk that smaller boards may find it easier to

become involved in management decisions rather

than overseeing them

Uhrig also notes however that there are

circumstances where a larger board may be

warranted For example when management of

the risks of the organisation is such that a number

of board committees are required larger board

membership may be appropriate Particularly in

the public sector where boards act in the interests

of the owners or members of the corporation

essentially as their proxies and representatives

board size can be somewhat larger often up to

twelve to meet representational and balance

requirements (httpwwwbrowngovernance

comasktheexperts4htm)

Board committees Board committees are a commonly used mechanism

for boards to enhance their effectiveness through

further detailed oversight and supervision of areas

of special risk critical to success Uhrig (2003) notes

that to assist in the efficiency of operations and

for reasons of accountability committees should

operate with a clear written mandate from the full

board The operations of committees should also

be agreed including how committees will report

to the board and how committees will interact with

management and other relevant parties This will

clarify whether a committee has the power to make

decisions and approve management proposals

or report to and make recommendations to the

board A director should be appointed to chair

each committee and should be responsible for

its operations reporting back to the full board

It is considered good practice that the chairman

of the full board should not be the chairman of

all committees

Board appointments Board selection and composition are vital elements

in securing effective boards that can deliver on

their accountability requirements The case study

from BC addresses the issue of best international

practice with regard to board selection



0c 100m 100y 0k

Case study Best practice in board selection

In Canada the premier of BC in 2001 established the Board Resourcing and Development Office

(BRDO) (httpwwwfingovbccabrdo) After reviewing best practices in director recruitment

and selection in the private and public sectors around the world the BRDO put in place the

following key elements of board selection

Competency matrix All corporations are required to think strategically about the issues facing

the corporation and from that to identify a matrix of competencies that sets out the required

skill set for the board of directors as a whole

Personal attributes In the recruitment process close attention is paid to the behaviour and

personal attributes of potential directors Importance is also placed on a candidatersquos commitment

to corporate governance and his or her understanding of the responsibilities of directors today

As part of due diligence directors of crown corporations are asked to commit to a Charter of

Expectations

Work with the chairboard If a new board is being created the chair is identified first The

BRDO then works with that chair to establish the competency matrix and to recruit and evaluate

potential board members If the recruitment is for a vacancy on a board the BRDO works with

the chair andor governance committee to identify and evaluate potential candidates

Pro-active search for candidates Candidates are identified from a variety of sources and

any person who is interested in serving on a board may make his or her interest known by

submitting a reacutesumeacute and expression of interest to the BRDO For specific vacancies boards are

encouraged to identify potential candidates In addition the BRDO retains a national executive

search consultant to provide ongoing search and referencing services

Due diligence The due diligence process for each candidate includes a review of the candidatersquos

probity identification of potential conflicts of interest and a declaration by the candidate

accepting his or her fiduciary and other responsibilities to the corporation All candidates who

wish to be considered for a position on a public sector corporation must complete a written

Candidate Profile and Declaration The formal due diligence process has been particularly

helpful in identifying potential conflicts of interest

Diversity There is a feeling that the membership of public sector boards should reflect the

cultural and geographical makeup of the population The challenge is to make sure that token

or unqualified appointments are not made The BRDO undertakes a search process including

searching in non-traditional places to ensure that qualified candidates are identified from many

diverse communities

20



0c 100m 100y 0k

Building the talent pool Boards are normally structured with a mixture of seasoned board

directors and others who are very senior and skilled in their professions but may not have had

extensive board experience The intention is to build the talent pool for the next generation of

private and public sector directors for BC and elsewhere

Transparency The BRDO publishes the names terms and full biographies of all appointees

to all public sector boards on the BRDO website Members of the public and other interested

parties can review and assess whether the board members appear to have the requisite skills

and experience for the positions they hold

Quality control During the recruitment and evaluation process the BRDO works with ministers

and boards to identify and recruit candidates Because the BRDO has expertise in the area of

corporate governance and board building it is able to bring this expertise to the process and

to provide advice in this area regardless of the ministry involved Also after the recruitment

and evaluation process is complete the BRDO is required to endorse the appropriateness

of every candidate before the appointment instrument is presented to the appointing body

for final approval

Commitment to best practices In addition to appointments the BRDO encourages and

supports public sector organisations to adopt best practices in corporate governance These

include things such as position descriptions for the board chair individual directors and

committees and written documents that outline the boardrsquos process and structure board

composition and succession plans appropriate orientation and ongoing director education

board chair committee and individual director evaluation processes separation of the chair and

CEO except in exceptional circumstances and a board plan for evaluating and compensating

the CEO and for CEO succession

21

Source Watson 2004 httpwwwiveybusinessjournalcomview_articleaspintArticle_ID=473

Board tenure The length of tenure on a board and the associated

issue of staggering of replacement of board

members are important issues to be addressed

as the case study from Canada suggests

There is no set term limit for boards though three

years is a common time in a number of countries

The experience of the Scottish government

regarding length of board appointments would

not be untypical


Terms of appointment can be for any period

between one and five years Appointments may be renewed for a second term subject

to satisfactory performance Members may

be re-appointed to the same position only

once without open competition A member

who has served an initial term and has been re-appointed may however choose to apply for

a third re-appointment or subsequent term with

the same public body He or she must apply in

open competition for each new term (http

wwwscotlandgovukTopicsGovernment

public-bodiesfaq-paa14)


0c 100m 100y 0k

Case study Board appointments and staggering of terms

A review carried out by the Office of the Auditor General of Canada (2005) found that in 2004

over one-third of directors of the fifteen largest Crown corporations were still sitting on boards

after their term had expired in several cases for over six months It also found that appointments

were not staggered evenly with one Crown corporation being in the process of replacing eight

of its twelve directors during 2004 This increased the risk that continuity of expertise and

corporate memory will be lost

Source httpwwwoag-bvggccainternetdocs20050207cepdf paras 730ndash732

Board development There is a need for board induction and continued

review of training needs and also to ensure

that those involved in the appointment of board

members are fully trained Many board members

come from the private sector and may be unfamiliar

with the challenges and opportunities associated

with working in a public sector environment

Induction is important in these circumstances

to enable board members to settle into their

roles The Auditor General of Western Australia

(1998) has further identified several areas where

individual and collective training needs of board

members should be regularly reviewed

bull

bull

bull

bull

specific skills such as the ability to understand

financial statements and non-financial

performance information

changes to legislation that will affect the

agencyrsquos operations or obligations

significant public sector trends

emerging issues of general significance such

as electronic commerce and the potential

uses and impacts of new technology

With regard to the continuing development needs

of board members board mentoring has been

discussed in Chapter 2 Board self-evaluation

(see section on board performance below) can

also be used to identify competency and skills

limitations where development is needed

The case study of training provided by Canadarsquos

Privy Council Office and the Cabinet Office in

the UK shows examples of training for board

members and for public servants involved in

board appointments

22

Board performance As the Auditor General of Western Australia (1998) notes

There is a tendency to equate the performance

of a governing board with the performance of the

agency thus excusing the board from separate

scrutiny However boards have numerous

choices on all aspects of how they conduct

themselves A poorly run board may waste

time spend disproportionate effort on minor

matters fail to provide strategic leadership

and have inadequate methods for monitoring

agency performance All boards should make

appraisals of how they conduct themselves



0c 100m 100y 0k

23

Case study Training provision

A 2000 review of practice by the Office of the Auditor General in Canada found that while new

directors of Crown corporations were given orientation training they were not briefed adequately

on their duties and responsibilities the corporationrsquos relationship to government policies on the

compensation of Crown corporation executives and boardroom procedures In response the

Privy Council Office established a new orientation course specifically addressing these issues

Most Crown corporations have participated in the training programme

In the UK following recommendations from the Public Administration Select Committee that

senior officials should receive training in public appointments the Cabinet Office worked in

partnership with the National Health Service Appointments Commission to develop a short

briefing event for members of the senior civil service The aims of the event were to provide

an overview of the public appointment process and the role of senior officials in that process

and to enable participants to undertake a fair appointments process that is fully compliant with

both the Code of Practice and equality legislation

Sources httpwwwoag-bvggccainternetdocs20050207cepdf httpwwwcabinetofficegovukmediacabinetofficecorpassetspublicationsreportspublic_ bodies2006co_pa_plan_2006pdf

However it is not that common for board

performance to be assessed Best practice

suggests that formal annual assessment of

board performance between the minister and the

chair of the board should take place to review

board performance (Uhrig 2003) Barker (2004)

suggests that a comprehensive board evaluation

in a UK setting for non-departmental public bodies

should include

bull

bull

bull

bull

bull

subjecting the board collectively to annual

evaluation against performance plan or

overarching list of objectives which may be

externally facilitated

senior responsible officers in the sponsor

department appraising the chairrsquos

performance annually

board members being assessed individually

for their performance against personal

objectives


using frameworks for board member appraisal

based on the Office of the Commissioner for

Public Appointments Code of Practice and

Cabinet Office guidance

using evaluations and appraisals to identify

areas for future development to drive through

performance improvements

For this process to be effective the board members

themselves must evaluate their own performance

alongside a departmental assessment Barker

(2004) suggests a performance evaluation

framework that board members its executive

team and members of the sponsoring department

can use to collaboratively assess performance

(see case study)


0c 100m 100y 0k

bull

bull

bull

Case study Illustrative example of board performance rating

Rating Description Headline action

Highly performing The board and sponsor

department are clear about

the organisationrsquos aim and its

position within the departmentrsquos

strategy

Produce timeline for future

reviews

Ensure that processes

for two-way strategy

communication continue to

be as effective as possible

Performing Both the board and the department

are quite clear about what they

want from the organisation but this

is not communicated effectively

between them

Ensure that the department

and the board meet regularly

so that both understand the

agreed strategies and their

implications

Developing The board understands aspects of

the sponsor departmentrsquos strategy

but does not see how it can be

married with the current direction

of the organisation

Arrange high-level meetings

of the chair and the senior

responsible officer in the

department or the minister

Ensure agreed alignment of

priorities is sustainable and

able to be implemented

Under performing The board does not see how the

organisation fits into the role of the

department and the department

feels that the organisationrsquos

objectives are at odds with the

departmentrsquos priorities

Carry out review of the

organisation to agree its


landscape

Clarify the independent nature

and needs of the body

Clarify the requirements of the

department

bull

bull

bull

bull

bull

Source Barker (2004) p 9 httpwwwhm-treasurygovukpspp_buliding_effective_boardshtm


24


0c 100m 100y 0k

25

Board composition Guidance from the Office of the Auditor General

of Canada (2005) draws on international best

practice to suggest that the majority of board

members should be independent that the

independent members hold regular meetings

without management in attendance and that the

board chair be an independent director (that is

the chair and chief executive positions should be

separate) The Auditor General notes that these

best practices are not always adopted in Crown

corporations in Canada where the practice of

holding board meetings without management in

attendance is uneven Further in a few Crown

corporations the same individual acts as chair

and chief executive

A further issue of debate is whether departmental

staff should represent government departments

on boards for which they have responsibility While

practice here varies the trend internationally is

tending towards the position that departmental

staff should not serve on boards The Office

of the Auditor General of Canada (2005) has

raised concerns about the role played by senior

public servants appointed to the boards of some

Crown corporations In their view departmental

representatives can too easily be viewed as

having a lsquosuper voicersquo and thereby unduly affect

the direction of the board For departmental

representatives themselves having the fiduciary

responsibility to act in the best interest of the

corporation and owing loyalty to their minister can

place them in difficult situations At times boards

require access to public sector decision-makers

but not necessarily as members of the board

Uhrig (2003) similarly notes that care should be

exercised when appointing public servants to

boards He states

In circumstances where a departmental staff

member is appointed on the basis of representing

the governmentrsquos interests or having a lsquoquasirsquo

supervision approach conflicts of interest may

arise and poor governance is likely Through

participation in decision-making either directly

or implied the departmental representative may

become an advocate for the organisation rather

than contributing critical comment This also has

the potential to create an incentive for the other

members of the board to meet to discuss and

agree on important issues separately from formal

meetings without involving the departmental

representative thereby removing the formal

board meeting as the main decision-making

forum of governance Membership of the board

by the related departmental representative is

unwise unless there are specific circumstances

which require it The above points do not

mean that departmental representatives should

not attend board meetings as agreed by the

chairman No objections are raised to either staff

of the entity or other public servants attending

specific parts of a meeting to discuss or clarify

issues with the board

The selective attendance of government

representatives at board meetings as outlined

above is one of the ways in which sponsoring

departments may exercise effective control over

public bodies in the absence of a board member

from a sponsoring department Also regular formal

and informal communications with the board

primarily the chair are vital to control So too is

the effective scrutiny and use of performance

plans and reports



0c 100m 100y 0k

Board remuneration Practice with regard to governing body

remuneration varies from country to country

and within countries across different types of

organisation Many of the smaller public bodies

tend to pay only out-of-pocket expenses such as

travel overnight accommodation and childcare

Others pay a set amount based either on a daily

rate or an estimated time commitment per month

or per year In general however remuneration is

relatively modest and lower than for non-executive

members of private sector boards Research

undertaken by the Auditor General Western

Australia (1998) suggests that total fees for a

board of seven to ten members are likely to be

about the same as the salary of a single middle

to senior manager

Practice varies as to whether there is centrally

imposed guidance andor control on remuneration

levels In South Australia for example the chief

executive of the Department of the Premier and

Cabinet has the delegated authority of cabinet

to assess and recommend fees for the members

of government appointed part-time to boards

and committees The determination of fees is

undertaken in accordance with a cabinet-approved

classification structure which the chief executive

may review from time to time (httpwwwpremcab

sagovaupdfcircularsremunerationpdf) In

the UK by way of contrast in 2005 the Cabinet

Office undertook a remuneration review of its

own public appointments The review concluded

that individual sponsor teams should retain

responsibility for setting and reviewing rates of

remuneration due to the diverse nature and work

of the departmentrsquos non-departmental public

bodies It was also decided that remuneration

rates must be reviewed by the sponsor team

every one to three years at the sponsor teamrsquos

discretion Any review conducted should take

into account any changes to the duties or

time commitment required of appointees any

recruitment or retention issues rates paid by

other Cabinet Office bodies and any increase in

the retail price index since the previous review

(httpwwwcabinetofficegovukmedia

cabinetofficecorpassetspublicationsreports

public_bodies2006co_pa_plan_2006pdf)

26



0c 100m 100y 0k

27

4 Control Two areas of control where there have been

particular developments in recent years are risk

management and audit With regard to good

corporate governance practice the governing

bodies of public organisations are expected to

ensure that their organisations have effective

risk-management practices in place and to

ensure effective internal and external audit of

financial and performance information regarding

the organisation

Risk management In considering risks and controls the obvious

area frequently highlighted is financial exposure or

financial risk However there is also a much broader

category of risks relevant to public organisations

including policy risk (the appropriateness and

quality of policy decisions) and reputational risk

(the public reputation of the organisation and

consequent effects) Risk management means

addressing this wide range of organisational factors

and not focusing solely on financial exposure

Of course public organisations are subject to

rapidly changing economic social and political

environments and planning for risk management

is difficult to implement in reality Nonetheless

some lessons can be derived from international

experiences

Public organisations have for many years

incorporated risk management albeit informally

into their management and decision-making

processes What is now required by many codes of

practice is that corporate governance procedures

and practice ensure that risk is explicitly stated and

a consensus on addressing risks formulated For

an example of how to develop a risk-management

framework see the approach adopted by the

Higher Education Funding Council for Wales (2006)

httpwwwhefcwacukInternalPolicies_Docs

Risk_Management_Policy_and_Guidelinesdoc

A risk-management policy can help clarify

accountability and responsibility for risk

management and thereby further support

the adoption of good practice governance

arrangements within the organisation





reputational risk Managing conflicts of interest

can be a particular challenge where departmental

representatives are also board members (but

see also the section on board composition

in Chapter 3) as the hypothetical case study

from Western Australia illustrates There is no

prescriptive set of rules specifying what constitutes

ethical behaviour for all situations or all public

organisations Decision-making should be guided


openness independence good faith and service

to the public which underpin most corporate

governance codes of practice The additional

hypothetical case study from New Zealand further

illustrates this point where a board member

may face potentially competing duties to two

organisations



0c 100m 100y 0k

Hypothetical case study Conflict of interest challenges for a departmental board member

Juanita is the director general of a state government department with responsibility for developing

and delivering cultural tourism in Western Australia The director general is responsible for

allocation of funds to the statutory authorities comprising the cultural tourism portfolio As a

voting member of several boards within the portfolio Juanita is well aware of the competing

demands for funding During a board meeting one of the members proposes a motion to cease

a key regional programme if funding cannot be guaranteed for the next three years

As the public officer responsible for allocation of government funds across the portfolio Juanita

has competing interests between her role as director general and as a board member This

makes it difficult for Juanita to always be seen to be impartial and acting in the best interests

of the agency with regard to decisions about allocation of funds for cultural tourism If it is not

possible for Juanita as director general to resign from the board it may be necessary to restrict

her involvement in certain board discussions such as that surrounding budget strategy For

example the director general could offer the board information on the overall cultural tourism

portfolio budget and advise members on matters of government policy but remove herself

from participating in any budget decisions made by the board Given the potential for conflict

it would be wise for the board in conjunction with the director general to develop specific

protocols in a code of conduct for how such competing situations will be handled 28

Source httpwwwopsscwagovauicgdocumentscoiscenario3pdf

Audit A particular feature of corporate governance

developments in recent years has been the

growing use of audits and inspections by external

bodies One issue of concern for the governing

body of many public organisations is the choice of

external auditors and the need to ensure auditor

independence rather than lsquocapturersquo of the auditors

by the organisation In that context auditor rotation

has been discussed as a possible mechanism The

case study on this topic suggests that striking a

balance between rotation and too quick a turnover

of external auditors is important

Another audit issue of growing prominence in the

public sector corporate governance literature is the

use of audit committees by public organisations to

provide an oversight of audit arrangements Audit

committees are becoming an increasingly important

part of the corporate governance framework in the

public sector for many organisations (though they

are not necessarily required for all organisations

for example in small or less complex organisations

there may not be a need for an audit committee)

Audit committees regularly review the plans and

reports of internal audit and quality assure the

work of internal audit



0c 100m 100y 0k

Case study Good practice principles for audit committees

The Controller and Auditor General in New Zealand on the basis of a review of best international practice issued guidance on the formation and operation of audit committees in the public sector Among the items addressed was the identification of good practice principles for audit committees

bull

bull

bull

bull

bull

bull

bull

the governing body or departmental chief executive should appoint an audit committee in which most of the members are independent of the management team

the chairperson of the audit committee should be someone other than the chairperson of the governing body or the chief executive

people appointed as audit committee members should have skills and experience adequate for the role of the committee

the audit committee needs to be clear about its mandate purpose and role in the organisation and within the governance structure as a whole

the roles and responsibilities of the audit committee should be documented and clearly defined in the context of the overall governance framework

the activities of the audit committee should be linked to risk-management disciplines

the chairperson of the audit committee should ensure that the audit committee has open and effective relationships with other governance committees the chief executive senior management and internal and external auditors

Source Controller and Auditor General (2008) httpwwwoaggovtnz2008audit-committeesdocsaudit-committees-public-sectorpdf

Hypothetical case study Duties to two different organisations

29

Jean-Paul is a member of the governing body of a tertiary education institution (TEI) The TEI has some contracting arrangements with private organisations to help to deliver some educational courses One of those arrangements is with a charitable trust under which the trust is funded by the TEI to prepare administer and teach the course on behalf of the TEI However the TEI is now about to decide whether to discontinue this arrangement Jean-Paul is also a trustee of the charitable trust

Jean-Paul has a conflict of interest in this decision He may not be affected personally by the decision but the trust he is a trustee of will be As a member of the governing body of the TEI Jean-Paul has a duty to act in the best interests of the TEI but as a trustee he also has a duty to act in the best interests of the trust In this case the best outcome for one entity may not be the best outcome for the other and so it may be impossible for Jean-Paul to faithfully give effect to his obligations to both organisations

Jean-Paul should declare a conflict of interest at relevant meetings of the TEIrsquos council and refrain from discussing or voting on the TEIrsquos decision It might be wise for him not to be provided with confidential information about the matter Jean-Paul may also need to consider whether he has a conflict of interest in the matter at meetings of the trust

Source httpwwwoaggovtnz2007conflicts-public-entitiesdocsoag-conflicts-public-entitiespdf pp 42ndash43



0c 100m 100y 0k

Case study The impact of independent auditors and auditor rotation

Corporate auditors are assigned to review financial statements and evaluate the accuracy of the information provided The lack of auditor independence is one of the major issues in the recent history of corporate governance Calls have been made for the introduction of provisions requiring the auditor to be appointed independent of management and for mandatory auditor rotation which compels organisations to change the audit firm at regular predetermined intervals

An empirical investigation by Schelker focuses on USA state level government where state auditors are often elected or appointed for a fixed term Auditors are elected or appointed for a different term length or sometimes face term limits The study estimates the impact of such differences on Moodyrsquos state credit ratings for USA long-term state bonds The evidence shows a U-shape relationship indicating that auditor performance is weak for very short and very long terms This is consistent with theories pointing towards audit failure due to a lack of expertise in the beginning of a mandate as well as with theories suggesting problems associated with diminishing independence with extended auditorndashclient relationships Furthermore the results indicate beneficial effects of term limits which can be interpreted as being in favour of mandatory rotation requirements Schelker proposes that auditors should be elected or appointed by either the board of directors for a fixed term with the possibility of re-electing or reappointing the auditor He advocates a term limit restricting the auditor from serving too long Such a design is related to auditor rotation requirements but is more flexible and preserves auditor expertise for an extended period of time 30


Source Schelker 2008 httppapersssrncomsol3paperscfmabstract_id=959392


0c 100m 100y 0k

31

5 External reporting The need for transparency As well as accountability transparency is a

fundamental element in the promotion of good

corporate governance The pivotal role of the

governing body in issues of transparency and

accountability is as relevant to the public sector as it

is to the private sector Public sector organisations

rely on the continuing support and confidence

of their stakeholders (eg ministers customers

employees lenders suppliers and business

partners) These stakeholders need to be assured

of the quality and ethical standards of public

bodies with which they deal and governing

bodies are expected to set an example in terms

of transparency in relation to matters such as

procurement remuneration and disclosure

policies



and plans is achieved in a number of ways including

managing the relationship between government

departments and organisational governing bodies

Performance dialogues between managers in

central government authorities and governing

body members and executive management of

public organisations are increasingly common

Performance dialogue refers to regular structured

face-to-face meetings between managers and

managed which draw on performance data to

review performance and agree prioritised action

plans

Public and timely production of reports as

illustrated in the case study on the ex-ante

reporting of business and corporate plans are

another means of enhancing transparency

Case study Ex-ante reporting of business and corporate plans

The preparation of corporate planning documents that cover short medium and long-term

periods is a feature of corporate governance arrangements for public sector agencies The

arrangements requiring the preparation of such plans are typically part of an agencyrsquos establishing

legislation or legislative or administrative elements of a financial management framework

In New Zealand the responsible minister of a Crown corporation is required to table the

organisationrsquos statement of corporate intent (a detailed plan covering a three-year period) in

parliament within twelve sitting days of the statement being delivered to the minister In New

South Wales a copy of a completed statement of corporate intent (a three-year plan reviewed

annually that contains the agencyrsquos objectives and performance targets and measures to judge

its performance) for state-owned companies is required to be tabled within fourteen sitting days

of the date on which the responsible ministers received the statement (However in 2004 for

the fourteen government business enterprises covered by the Act the reports were delivered

more than eight months after the start of the reporting period)

Source Public Accounts and Estimates Committee 2005 pp 89ndash90 httpwwwparliamentvicgovaupaecinquiriespublicgovernance



0c 100m 100y 0k

Case study Weaknesses in departmental review of public bodiesrsquo corporate plans

A review by the Office of the Auditor General in Canada found that government departments

had limited knowledge and expertise to challenge the corporate plans of Crown corporations

and that in effect the government was approving many deficient corporate plans They found

that neither the Treasury Board Secretariat nor the applicable departments have clearly defined

their respective roles in the process for reviewing and approving corporate plans or assessed

the capacity and skills needed to fulfil their roles

Source httpwwwoag-bvggccainternetdocs20050207cepdf

The public production of reports such as

corporate plans by the governing bodies of

public organisations also puts an onus on staff in

parent departments to assess and validate these

reports The case study from Canada shows that

there may be weaknesses at departmental level

that needs to be addressed if transparency is to

be fully effective

Balancing transparency with confidentiality Studies show that there may be difficulties

for individuals and organisations in relation to

discharging governing body duties in a transparent

manner whilst simultaneously protecting sensitive

business or organisation information The need for

codes and practices to acknowledge the tension

between confidentiality and transparency and

to strike a balance between these competing

tensions requires constant scrutiny

32



0c 100m 100y 0k

33

6 Conclusions Understanding how to ensure and achieve best

practice in corporate governance is a significant

challenge for public sector organisations There

has been much cross-fertilisation of corporate

governance standards and codes in recent

years particularly those from the UK USA and

OECD which have provided many of the basic

frameworks Many developments in public sector

corporate governance have borrowed from practice

in the private sector though public authorities

operate within unique statutory regulatory and

managerial environments

The principal dimensions of corporate governance

are standards of behaviour organisational

structures and processes control and external

reporting Standards of behaviour are important

to corporate governance as they establish how

the leadership of the organisation operates

the values that drive the organisation and the

culture that prevails in the organisation all of

which influence the behaviour of all staff Formal

codes of conduct are an important emerging

feature of good corporate governance practice

internationally to ensure good standards of

behaviour Leadership is a crucial principle from

a corporate governance perspective

Organisational structures and processes should

be designed to achieve and successfully manage

different accountability demands The boards of

public organisations as the governing bodies

with responsibility for the organisation require

particular attention to be paid to their operation

and performance This demands action both on

the part of the board and also of staff within the

sponsoring government department

Control involves both risk management and

regular audit A risk-management policy and the

active management of conflicts of interest can

help address risks and thereby further support


arrangements within the organisation Audits

and inspections by external bodies are now a

normal part of life in public service organisations

Issues of concern for the governing body of

many public organisations include the choice of

external auditors auditor rotation and the use of

audit committees

External reporting is one means of demonstrating

a commitment to transparency However public

servants and public organisations routinely

face difficulties in terms of discharging duties



information As well as developing guidance on

such issues it is important that governing bodies




While there are particular challenges regarding

the application of corporate governance in the

public sector the examples of good practice

here (and the lessons to be learned from the

failures outlined) show that good governance

is possible for arms-length agencies Effective

corporate governance can contribute to a better

functioning public service Scandals and waste

of public money can be avoided if corporate

governance issues are clearly addressed by the

governing bodies of arms-length agencies and

officials from their sponsoring departments



0c 100m 100y 0k

References Audit Commission (2003) Corporate Governance Improvement and trust in local public services (London Audit Commission) httpwwwaudit-commissiongovuknationalstudieslocalgovPagesimprovementtrust publicservicesaspx

Auditor General Western Australia (1998) Public Sector Boards Perth Auditor General Western Australia httpwwwauditwagovaureportsreport98_9html

Australian National Audit Office (1999) Principles and Better Practices Corporate Governance in Commonwealth Authorities and Companies Discussion Paper (Canberra ANAO) httpwwwanaogovauuploadsdocumentsCorporate_Governance_in_Commonwealth_Authorities_and_ Companiespdf

Barker L (2004) Building Effective Boards (London HM Treasury) httpwwwhm-treasurygovukpspp_buliding_effective_boardshtm

Bovaird T and Loumlffler E (2009) lsquoUnderstanding public management and governancersquo in Bovaird T and Loumlffler E Public Management and Governance (eds) (2nd ed) (Oxford Routledge) pp 3ndash13

Committee on the Financial Aspects of Corporate Governance (the Cadbury Committee) (1992) The Financial Aspects of Corporate Governance (London Burgess Science Press) httpwwwecgiorgcodesdocumentscadburypdf

Controller and Auditor General (2008) Audit Committees in the Public Sector Good Practice Guide (Wellington Office of the Auditor General) httpwwwoaggovtnz2008audit-committeesdocsaudit-committees-public-sectorpdf

Department of Finance (2009) Code of Practice for the Governance of State Bodies (Dublin Department of Finance) httpwwwfinancegovieviewdocaspDocID=5824

Edwards M and R Clough (2005) Corporate Governance and Performance An Exploration of the Connection in a Public Sector Context Issue Paper No 1 (Canberra University of Canberra) httpwwwcanberraeduaucorpgov-apspubIssuesPaperNo1_GovernancePerformanceIssuespdf

Government of Australia (2005) Governance Arrangements for Australian Government Bodies (Canberra Commonwealth of Australia) httpwwwfinancegovaufinancial-frameworkgovernancedocsGovernance-Arrangements-for-Australian-Government-Bodiespdf

International Federation of Accountants (IFAC) (2001) Governance in the Public Sector A Governing Body Perspective (New York International Federation of Accountants) httpwwwifacorgMembersDownLoadsStudy_13_Governancepdf


34


0c 100m 100y 0k

35

Kalokerinos J (2007) Developments in the Role of the Chair in the Private and Public Sectors Issue Paper Series No 4 (Canberra University of Canberra) httpwwwcanberraeduaucorpgov-apspubIssuesPaperNo4_ DevelopmentsInTheRoleOfTheChair_Final_March07pdf

OECD (2004) OECD Principles of Corporate Governance (revised) (Paris OECD) httpwwwoecdorgdataoecd321831557724pdf

Office of the Auditor General of Canada (2005) Governance of Crown Corporations (Ottawa Office of the Auditor General of Canada) httpwwwoag-bvggccainternetdocs20050207cepdf

Office of the Auditor General of Canada (2007) 2007 February Status Report of the Auditor General of Canada httpwwwoag-bvggccainternetEnglishatt_20070203xe03_e_17507html

Office of the Auditor General of Western Australia (1998) Public Sector Boards (Perth Office of the Auditor General) httpwwwauditwagovaureportsreport98_9html

Plumptre T (2004) The New Rules of the Board Game (Ottawa Institute On Governance) httpwwwiogcapublicationsboard_gamepdf

Public Accounts and Estimates Committee (2005) Report on the Inquiry into Corporate Governance in the Victorian Public Sector (Melbourne Government Printer for the State of Victoria) httpwwwparliamentvicgovaupaecinquiriespublicgovernance

Public Audit Forum (2001) Propriety and Audit in the Public Sector httpwwwpublic-audit-forumgovukproprietypdf

Schelker M (2008) Auditors and Corporate Governance Evidence from the Public Sector httppapersssrncomsol3paperscfmabstract_id=959392

Treasury Board of Canada Secretariat (2002) Corporate Governance in Crown Corporations and Other Public Enterprises ndash Guidelines (Ottawa Treasury Board) httpwwwtbs-sctgccagov-gouventrepriseentreprise02-engasp

Uhrig J (2003) Review of the Corporate Governance of Statutory Authorities and Office Holders (Canberra Commonwealth of Australia) httpwwwfinancegovaufinancial-frameworkgovernancedocsUhrig-Reportpdf Watson E (2004) lsquoPublic sector corporate governance British Columbiarsquos best-practices reformsrsquo Ivey Business Journal MarchApril httpwwwiveybusinessjournalcomview_articleaspintArticle_ID=473



0c 100m 100y 0k

EfficiEncy unit 13f West Wing central Government Offices 11 ice House Street central Hong Kong

Email euwmeugovhk tel 2165 7255 fax 2524 7267 Website wwweugovhk

香港特別行政區政府 THE GOVERNMENT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION




Foreword

Contents

Executive Summary






2 Standards of behaviour


Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit

5 External reporting



6 Conclusions

References


0c 100m 100y 0k


Vision Statement

To be the preferred consulting partner for all government bureaux and departments and to advance

the delivery of world-class public services to the people of Hong Kong

Mission Statement

To provide strategic and implementable solutions to all our clients as they seek to deliver people-

based government services We do this by combining our extensive understanding of policies our

specialised knowledge and our broad contacts and linkages throughout the Government and the

private sector In doing this we join our clients in contributing to the advancement of the community

while also providing a fulfilling career for all members of our team

This brief was researched and authored by the Research Division Institute of Public Administration Ireland( wwwipaieresearch) The Research Division provides applied research services for policy

makers in a wide range of public service organisations drawing on an extensive network of contacts

and experience gained over more than thirty years

Other Efficiency Unit Documents

The Efficiency Unit has produced a number of guides on good practice on a wide range of areas

including outsourcing and contract management These may be found on the Efficiency Unit website

at wwweugovhk

i



0c 100m 100y 0k

ii

Foreword













July 2009



0c 100m 100y 0k

Contents

Executive Summary 1








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

iii

4 Control 27

Risk management

Audit




6 Conclusions 33

References 34



0c 100m 100y 0k

1

Executive Summary











weak controls
















assets or resources


















for the board











stewardship















0c 100m 100y 0k


2







codes of conduct


bull

bull

bull

bull

bull

bull


Processes

bull board dynamics


Control

risk management

audit

External Reporting



0c 100m 100y 0k

3


















behaviours





(Table 1)





























audit arrangements
















reports














0c 100m 100y 0k





















performance









modest



4


0c 100m 100y 0k

5

































































0c 100m 100y 0k




























6



0c 100m 100y 0k

7




























































pdf























0c 100m 100y 0k















standards




















page 11 identifies


















8


0c 100m 100y 0k










bull

bull

bull

bull

bull

bull

















9



0c 100m 100y 0k

bull















public sector

















include

bull

bull

bull

bull

bull












bull

bull

bull

bull

bull

bull






























bull


10


0c 100m 100y 0k






internal policies





resources

bull

bull

bull

bull

bull

bull

bull










chapters











bull








11



0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

ii

Foreword













July 2009



0c 100m 100y 0k

Contents

Executive Summary 1








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

iii

4 Control 27

Risk management

Audit




6 Conclusions 33

References 34



0c 100m 100y 0k

1

Executive Summary











weak controls
















assets or resources


















for the board











stewardship















0c 100m 100y 0k


2







codes of conduct


bull

bull

bull

bull

bull

bull


Processes

bull board dynamics


Control

risk management

audit

External Reporting



0c 100m 100y 0k

3


















behaviours





(Table 1)





























audit arrangements
















reports














0c 100m 100y 0k





















performance









modest



4


0c 100m 100y 0k

5

































































0c 100m 100y 0k




























6



0c 100m 100y 0k

7




























































pdf























0c 100m 100y 0k















standards




















page 11 identifies


















8


0c 100m 100y 0k










bull

bull

bull

bull

bull

bull

















9



0c 100m 100y 0k

bull















public sector

















include

bull

bull

bull

bull

bull












bull

bull

bull

bull

bull

bull






























bull


10


0c 100m 100y 0k






internal policies





resources

bull

bull

bull

bull

bull

bull

bull










chapters











bull








11



0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

Contents

Executive Summary 1








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

iii

4 Control 27

Risk management

Audit




6 Conclusions 33

References 34



0c 100m 100y 0k

1

Executive Summary











weak controls
















assets or resources


















for the board











stewardship















0c 100m 100y 0k


2







codes of conduct


bull

bull

bull

bull

bull

bull


Processes

bull board dynamics


Control

risk management

audit

External Reporting



0c 100m 100y 0k

3


















behaviours





(Table 1)





























audit arrangements
















reports














0c 100m 100y 0k





















performance









modest



4


0c 100m 100y 0k

5

































































0c 100m 100y 0k




























6



0c 100m 100y 0k

7




























































pdf























0c 100m 100y 0k















standards




















page 11 identifies


















8


0c 100m 100y 0k










bull

bull

bull

bull

bull

bull

















9



0c 100m 100y 0k

bull















public sector

















include

bull

bull

bull

bull

bull












bull

bull

bull

bull

bull

bull






























bull


10


0c 100m 100y 0k






internal policies





resources

bull

bull

bull

bull

bull

bull

bull










chapters











bull








11



0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

1

Executive Summary











weak controls
















assets or resources


















for the board











stewardship















0c 100m 100y 0k


2







codes of conduct


bull

bull

bull

bull

bull

bull


Processes

bull board dynamics


Control

risk management

audit

External Reporting



0c 100m 100y 0k

3


















behaviours





(Table 1)





























audit arrangements
















reports














0c 100m 100y 0k





















performance









modest



4


0c 100m 100y 0k

5

































































0c 100m 100y 0k




























6



0c 100m 100y 0k

7




























































pdf























0c 100m 100y 0k















standards




















page 11 identifies


















8


0c 100m 100y 0k










bull

bull

bull

bull

bull

bull

















9



0c 100m 100y 0k

bull















public sector

















include

bull

bull

bull

bull

bull












bull

bull

bull

bull

bull

bull






























bull


10


0c 100m 100y 0k






internal policies





resources

bull

bull

bull

bull

bull

bull

bull










chapters











bull








11



0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k


2







codes of conduct


bull

bull

bull

bull

bull

bull


Processes

bull board dynamics


Control

risk management

audit

External Reporting



0c 100m 100y 0k

3


















behaviours





(Table 1)





























audit arrangements
















reports














0c 100m 100y 0k





















performance









modest



4


0c 100m 100y 0k

5

































































0c 100m 100y 0k




























6



0c 100m 100y 0k

7




























































pdf























0c 100m 100y 0k















standards




















page 11 identifies


















8


0c 100m 100y 0k










bull

bull

bull

bull

bull

bull

















9



0c 100m 100y 0k

bull















public sector

















include

bull

bull

bull

bull

bull












bull

bull

bull

bull

bull

bull






























bull


10


0c 100m 100y 0k






internal policies





resources

bull

bull

bull

bull

bull

bull

bull










chapters











bull








11



0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

3


















behaviours





(Table 1)





























audit arrangements
















reports














0c 100m 100y 0k





















performance









modest



4


0c 100m 100y 0k

5

































































0c 100m 100y 0k




























6



0c 100m 100y 0k

7




























































pdf























0c 100m 100y 0k















standards




















page 11 identifies


















8


0c 100m 100y 0k










bull

bull

bull

bull

bull

bull

















9



0c 100m 100y 0k

bull















public sector

















include

bull

bull

bull

bull

bull












bull

bull

bull

bull

bull

bull






























bull


10


0c 100m 100y 0k






internal policies





resources

bull

bull

bull

bull

bull

bull

bull










chapters











bull








11



0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k





















performance









modest



4


0c 100m 100y 0k

5

































































0c 100m 100y 0k




























6



0c 100m 100y 0k

7




























































pdf























0c 100m 100y 0k















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page 11 identifies


















8


0c 100m 100y 0k










bull

bull

bull

bull

bull

bull

















9



0c 100m 100y 0k

bull















public sector

















include

bull

bull

bull

bull

bull












bull

bull

bull

bull

bull

bull






























bull


10


0c 100m 100y 0k






internal policies





resources

bull

bull

bull

bull

bull

bull

bull










chapters











bull








11



0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

5

































































0c 100m 100y 0k




























6



0c 100m 100y 0k

7




























































pdf























0c 100m 100y 0k















standards




















page 11 identifies


















8


0c 100m 100y 0k










bull

bull

bull

bull

bull

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9



0c 100m 100y 0k

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public sector

















include

bull

bull

bull

bull

bull












bull

bull

bull

bull

bull

bull






























bull


10


0c 100m 100y 0k






internal policies





resources

bull

bull

bull

bull

bull

bull

bull










chapters











bull








11



0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




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14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k




























6



0c 100m 100y 0k

7




























































pdf























0c 100m 100y 0k















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page 11 identifies


















8


0c 100m 100y 0k










bull

bull

bull

bull

bull

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9



0c 100m 100y 0k

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public sector

















include

bull

bull

bull

bull

bull












bull

bull

bull

bull

bull

bull






























bull


10


0c 100m 100y 0k






internal policies





resources

bull

bull

bull

bull

bull

bull

bull










chapters











bull








11



0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




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14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

7




























































pdf























0c 100m 100y 0k















standards




















page 11 identifies


















8


0c 100m 100y 0k










bull

bull

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bull

bull

bull

















9



0c 100m 100y 0k

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public sector

















include

bull

bull

bull

bull

bull












bull

bull

bull

bull

bull

bull






























bull


10


0c 100m 100y 0k






internal policies





resources

bull

bull

bull

bull

bull

bull

bull










chapters











bull








11



0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

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should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

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the organisation
















experiences






































organisations



0c 100m 100y 0k















































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bull

bull

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bull

bull

bull










29







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policies














plans






















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be fully effective










32



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audit committees


























0c 100m 100y 0k













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0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k















standards




















page 11 identifies


















8


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9



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public sector

















include

bull

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bull

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bull

bull

bull






























bull


10


0c 100m 100y 0k






internal policies





resources

bull

bull

bull

bull

bull

bull

bull










chapters











bull








11



0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

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bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

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bull

bull

bull

bull

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bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

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chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



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all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















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21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

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and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

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the organisation
















experiences






































organisations



0c 100m 100y 0k















































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29







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policies














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audit committees


























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Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k










bull

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9



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public sector

















include

bull

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bull

bull

bull

bull

bull

bull






























bull


10


0c 100m 100y 0k






internal policies





resources

bull

bull

bull

bull

bull

bull

bull










chapters











bull








11



0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

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case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

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chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

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all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

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the organisation
















experiences






































organisations



0c 100m 100y 0k















































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29







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policies














plans






















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be fully effective










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audit committees


























0c 100m 100y 0k













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0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

bull















public sector

















include

bull

bull

bull

bull

bull












bull

bull

bull

bull

bull

bull






























bull


10


0c 100m 100y 0k






internal policies





resources

bull

bull

bull

bull

bull

bull

bull










chapters











bull








11



0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

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all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

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audit committees


























0c 100m 100y 0k













34


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0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k






internal policies





resources

bull

bull

bull

bull

bull

bull

bull










chapters











bull








11



0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k




bull

bull


Leadership

Codes of conduct


and processes

bull

bull




3 Control bull

bull

bull I


Audit

nternal control


bull

Transparency

Confidentiality



12


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

13





























sector include

bull

bull

bull

bull

bull

bull

bull

bull

bull









Information flows





0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

bull

bull

bull

bull












asp





aspDocID=5824















controls










chair and the CEO




authority



14


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

15












case study)




bull

bull

bull

bull

bull

bull

bull

bull

bull


personal behaviour







body








independent body















bull

bull

bull

bull

bull
















merit





office









0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

bull

bull





public interest







bull

bull

bull




reason









bull

bull

bull

bull

bull

Public focus










16



0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

17


















chair should

bull

bull

bull

bull













responsibility
























organisation



0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k




















18



0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

19





























































all committees








0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k













Expectations




















diverse communities

20



0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k















for final approval









21










not be untypical














0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k






















bull

bull

bull

bull




















board appointments

22















0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

23
























should include

bull

bull

bull

bull

bull










objectives
















(see case study)


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

bull

bull

bull







strategy


reviews









between them





implications





of the organisation

















landscape




department

bull

bull

bull

bull

bull



24


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

25















and chief executive






















boards He states



































plans and reports



0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k
















to senior manager
































26



0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

27










the organisation
















experiences






































organisations



0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k















































0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k



bull

bull

bull

bull

bull

bull

bull










29







0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k







0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

31
















policies














plans






















0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k
















be fully effective










32



0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

33















































audit committees


























0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k













34


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k

35














0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References


0c 100m 100y 0k







Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References





Foreword

Contents

Executive Summary








Codes of conduct



Board size

Board committees

Board appointments

Board tenure

Board development

Board performance

Board composition

Board remuneration

4 Control

Risk management

Audit




6 Conclusions

References