As a board member, you are part of your agency’s governing body. Your role includes ensuring that:

  • your agency’s functions are fulfilled effectively
  • the agency complies with its governance framework (the laws and other obligations that bind it)
  • your own conduct is consistent with the required standards of conduct for public sector board members.

Where can l find easy-to-read guidance about my role?

For easy-to-read guidance about your role as a board member:

  • Start by looking at the Induction and education support module. The guidance notes and other information listed for inclusion in a board member’s induction kit are key reading for all board members.
  • On Board also has support modules on specific governance topics (e.g. conflict of interest).

Basic obligations and good governance practice

Some of the basic obligations and good governance practice that you must understand and act consistently with are as follows:

Purpose, functions and powers

It is essential to fully understand your agency’s purpose, functions and powers. These are set out in its establishing Act (or terms of reference).

The board is accountable to the minister for ensuring that the agency fulfils its functions effectively and that it does not veer off course and act outside these legal boundaries.

Governance framework

The laws, government policies and other obligations that bind your agency are called its ‘governance framework’. The board must ensure that the agency complies with these requirements, which typically include:

  • your agency’s establishing Act (or terms of reference), which is the source of its purpose, functions and powers
  • the Public Administration Act 2004 (PAA) and related codes (e.g. Directors’ Code of Conduct, which applies to board members, and Code of Conduct for Victorian Public Sector Employees). These set the overall standards of conduct for Victoria’s public sector
  • government policies (e.g. the board’s strategic plan must be consistent with all relevant government policy)
  • key documents that your agency is required by law to develop and implement (e.g. strategic plan, annual business plan)
  • annual reporting obligations
  • financial and risk management obligations
  • ministerial guidelines, directions, and statements of obligation or expectation (if any)
  • laws that apply across the Victorian public sector (e.g. freedom of information)
  • other applicable laws and obligations.

Standards of conduct

Your conductas a board member must meet with the required standards of conduct for public sector board members. The overarching requirement is to act and make decisions in the public interest. It is recommended that you read:

  • DELWP’s ‘overview’ guidance notes on Conflict of interest, Meetings and decisions, Gifts, benefits and hospitality, and Code of conduct. These are available from the Induction and education support module.
  • The Directors’ Code of Conduct issued by the Victorian Public Sector Commission. This binding code is based on the public sector values in section 7 of the PAA. By following the code, you will also comply with the general duties of directors (board members) in section 79.

Roles and relationships

To be an effective board member, you will need to understand the roles of, and relationships between, each of the key stakeholders, including:

  • Parliament, the minister and DELWP
  • the board (collectively and individually)
  • the board’s chair or convener
  • the CEO or managing director of the agency (or the DELWP executive officer)
  • other key stakeholders - e.g. watchdog agencies such as the Victorian Ombudsman and the Victorian Auditor-General.

There is a summary chart on these various roles in the induction and education support module.

Oversight and support (section 13A of PAA)

The Secretary of DELWP oversees and supports DELWP agencies on behalf of the responsible ministers.  Under section 13A of the PAA this includes:

  • advising the minister on matters such as your agency’s discharge of its responsibilities under its establishing Act, the PAA, and other relevant laws
  • working with, and providing guidance to, your agency on matters relating to public administration and governance.

Unless prohibited by law, your agency mustprovide the Secretary of DELWP with any informationthat he or she requires to comply with his/her obligations under section 13A.

Key responsibilities of the board

When performing its role, your board must:

  • make decisions in the public interest - for details see the Meetings and decisions support module
  • ensure that all of its actions and decisions are consistent with the agency's functions and powers
  • act in accordance with its collective accountability to the minister - section 85 of the PAA
  • inform the minister and the Secretary of DELWP of all known major risks to the effective operation of the agency (including emerging risks) and of the systems that are in place to address those risks - section 81 of the PAA
  • unless prohibited from doing so by law, provide the minister and DELWP with any information about the agency and its operations that is requested - section 13A and section 81 of the PAA.

Essential board policies

As a board member, you should ensure that:

  • your agency has the required board policies in place
  • these policies are updated regularly
  • you comply with these policies at all times.

Essential board policies under section 81 of the PAA are:

Another important board policy that should be in place is a policy on induction and education (professional development) for board members.

Model policies

DELWP offers model policies on each of the above topics. Your board’s policies should be consistent with these model policies.

If your agency’s establishing Act or terms of reference contain specific requirements in relation to any of these topics, your board will need to adapt the relevant model policy accordingly.

Board meetings and decisions

It is essential to know your board’s policy on meetings and decisions.  In particular, you need to understand the board’s obligations in relation to:

  • the required quorum (minimum number of board members who can make a decision)
  • the declaration and management of conflicts of interest
  • voting and other decision-making requirements
  • minutes of meetings
  • confidentiality.

The board must ensure that each of its decisions is valid and in the public interest. Each board member is accountable for every decision that the board makes.

First loyalty principle

The first loyalty principle means that if you were originally appointed to the board as the ‘representative’ of an organisation or group or you have any other interest in another organisation or group, once appointed to the board of the DELWP agency:

  • your first loyalty must always be to make decisions in the public interest of fulfilling the functions of the DELWP agency (not to benefit the organisation or group that you were appointed as a ‘representative’ of or have any other interest in)
  • for certain decisions that the board intends to discuss and make, your interest in the other organisation or group must be declared and managed as a conflict of interest.

DELWP offers a support module on Meetings and decisions with an ‘overview’ guidance note, model policy, and other resources.

Your board’s Meetings and decisions policy should be consistent with the DELWP model policy.

Delegations and board committees

Delegations

It is important to check whether your board can delegate any of its decision-making powers and, if so, which ones, to whom, and how.  In particular:

  • Is there any legal power for your board to delegate certain decisions to members of a board committee? Any such power will be set out in the agency’s establishing Act (or terms of reference) or, if applicable, section 83 the Public Administration Act or the Financial Management Act and related Standing Directions.
  • If there is such a power, a properly executed Instrument of Delegation must be in effect for a decision made under delegation to be valid.
Board committees

You will need to understand how board committees operate and the limits of their role.  Unless there is a delegation in place, neither a board committee nor any of its members can make a decision on behalf of the board. Instead, the committee makes recommendations to the board.

Usually, non-board members can be included in board committees.

It is good governance practice for board committees to have written terms of reference set by the board and be required to follow board policies (e.g. Conflict of interest).

For further information see the support module on Board committees

Strategic and business planning

It is important to understand the strategic and business planning requirements that apply to your agency, and the plans that the board develops. These usually include:

  • strategic (corporate) plan – a medium to long term plan that sets out the board’s strategic vision and direction (e.g. for the next three to five years)
  • annual business plan – a short term plan that sets out how the agency will implement the board’s strategic vision for the next 12 months.

Performance monitoring and reporting

You must understand your board’s performance monitoring and reporting obligations, including:

  • annual reporting obligations - e.g. does your agency submit an annual report that is reported or tabled in Parliament under the Financial Management Act?
  • risk management obligations
  • other performance monitoring and reporting obligations.

Employment of staff

If your agency employs staff, key requirements include:

Your appointment (terms and conditions)

You should familiarise yourself with the terms and conditions of your appointment and related governance requirements, for example:

  • your Instrument of Appointment (the document appointing you as a board member). This document sets out the terms and conditions of your appointment – e.g. the duration of your appointment, the remuneration (if any) you will receive, and your eligibility for reimbursement of expenses
  • the induction program and kit that you should receive
  • performance expectations - e.g. process for the board’s annual assessment of its collective performance and the performance of the chair and individual board members
  • the process required by law if you decide to tender your resignation - an email will not do!
  • what you must do if you decide to stand for election to parliament or a local council

You may also wish to familiarise yourself with:

  • succession planning and reappointment
  • the potential consequences of breach of duty
  • indemnities and insurance.