Principle 6: The playbook

Principle

Through effective processes and continual review of its performance, the board is able to demonstrate accountability and transparency to its members and stakeholders.

Benefits

• There is increased stakeholder understanding.
• The level of trust is higher between the board and members as members are assured their interests are considered in decision-making.
• Mistakes are not repeated as the board learns and adjusts processes accordingly.
• The organisation is trusted, giving it greater access to resources and more freedom to operate.
• Disputes are easily managed through an established resolution process.
• Better decisions are made because directors understand their role and have the information they require.

Questions to ask

• How do we ensure that directors are aware of and able to discharge their duties, powers and responsibilities?
• What policies or practices can we put in place to assure stakeholders that the board is governing effectively and in the best interests of the organisation?
• How do we identify and manage conflicts of interest (real and perceived)?
• Are members able to find relevant policies for interaction with the board?
• What are we communicating to stakeholders about the organisation’s progress and achievements?

Accountability and transparency

Accountability and transparency are often linked but are not interchangeable terms.

An organisation is accountable when it fulfils its responsibilities owed to another. In sport governance, the board is accountable to its members for its decisions and actions.

Transparency is providing visibility via the disclosure of information. Organisations should be transparent by providing insight into the operation of its board to assure members that the board and its directors are acting in the best interests of the organisation.

How can the board demonstrate accountability?

Documenting board processes and decisions provides accountability by defining how governance is actioned within the organisation. The documented processes can be referred to by directors and management to inform themselves of their individual responsibilities, while also providing guidance for directors and management to hold each other accountable. All decisions made by the board should be recorded, along with any evidence or information the board relied upon to make the decision. Documented decisions are a basis for evaluating accountability.

How can the board demonstrate transparency?

Public disclosure of the processes and policies which underpin the board’s operations and decision-making provide transparency. Such disclosure would allow members and stakeholders to be assured that the board is following good processes, creating confidence in the actions and decisions of the board.

Transparency does not mean that the board needs to disclose everything it discusses. Board meetings will, for example, involve discussions which are confidential and should not be made public. Having documented processes about what, when, and by whom information will be disclosed allows the board to be transparent without compromising the need for confidentiality.

Example behaviours and actions

Board

• Guiding new directors through a comprehensive induction process and taking time to address questions they may have
• Regularly reviewing board processes to ensure they align with contemporary thinking on good governance
• Including a governance statement in the annual report outlining the work and achievements of the board during the year

Directors

• Disclosing conflicts of interest and following the policy to manage conflicts
• Referring to the board charter during meetings to ensure the board is acting in line with how it has agreed to act
• Reviewing meeting minutes to ensure they provide an adequate level of detail and are an accurate reflection of the meeting and decisions made

Organisation

• Establishing a clear plan for engaging with stakeholders and a process for communicating feedback
• Publishing strategic plans and other organisation-wide documents including governance processes
• Ensuring all annual reporting is accurate, meaningful and provides enough information for members to evaluate the performance of the organisation

CEO

• Supporting the chair to develop meeting agendas
• Preparing board papers which provide adequate detail for informed decision-making
• Coordinating a thorough induction for new directors regarding the management of the organisation
• Circulating minutes within a week of any board meeting

Recommendations

A set of good practice suggestions, which should underpin the Board’s considerations in applying this principle.

Organisations should have a board charter which outlines how the board fulfils its duties, powers and responsibilities.

The roles of key positions in an organisation’s governance system should be documented and understood. Key positions may be listed in a constitution. At a minimum, there should be position descriptions and expectations outlined for the roles of an individual director and the chair.

Directors should undergo an appropriate induction process.

The board should document, disclose and enforce a process for managing director conflicts of interest.

The board should establish and work to an annual board calendar/work plan which includes major annual activities such as budget approval, strategy review, CEO evaluation, policy reviews and the annual general meeting.

An agenda and board papers, in an appropriate and agreed format, should be circulated sufficiently in advance of all board meetings.

Board meeting minutes, in an appropriate and agreed format, and including a clear record of decisions, should be distributed among directors within one week of the meeting.

Organisations should publicly publish documentation regarding their governance processes.

Organisations should publicly publish their financial reports, strategic plans, risk registers and other appropriate documentation along with an annual report which meets the requirements of its incorporating legislation.

Resources and tools to help

Head to the National Governance Resource Library for resources and tools.

For guidance, or to discuss how your organisation may best implement good practice in this area, please contact your State/Territory agency for sport and recreation.

For NSOs, email your query to SportsGovernance@ausport.gov.au and a consultant will contact you.

Sport Governance Principles:

Overview The startline Principle 1: The spirit of the game Principle 2: The team Principle 3: The gameplan Principle 4: The players Principle 5: The rulebook Principle 6: The playbook Principle 7: The defence Principle 8: The best and fairest Principle 9: The scorecard The game is changing Glossary Case studies Evolved Sport Governance Principles