Basic Governance. Debi J. Peverill.

Transcription

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2 Basic Governance Debi J. Peverill

3 Governance Workshops 1. Basic board governance 2. Financial literacy for board members 3. Strategic planning 4. Policy development

4 Agenda Workshop One What is governance and why do you care? Board of directors and organizations The five questions Stakeholders What could go wrong? Framework for directors responsibilities Individual responsibilities

5 What is Governance? Governance refers to the overall process and structures used to direct and manage operations and activities.

6 Governance is everywhere? Governance applies to: Businesses Non profits Trusts Partnerships Families

7 Organizations We are all responsible for our own individual actions. Organizations are not real people so some real people must be responsible for the actions of the organization Those people are called directors.

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9 Governance Buzzwords Accountability Financial management Internal control Public engagement Risk assessment Stakeholder Statutory requirements Strategic Direction Transparency

10 Public Trust Public trust in organizations is low due to recent scandals Risk of loss of public trust is also known as reputation risk It can take a long time to earn public trust but it can be lost in an instant

11 Public Trust Enron financial disaster and the collapse of Arthur Andersen Maple Leaf foods listeria outbreak Steroids in baseball, track and field and other sports (Russia) Volkswagen emissions testing scandal

12 Basic Questions Why does the organization exist? Whom does it serve? What is the plan to fulfill its mandate? What are its results? To whom is it accountable?

13 Not for Profit Non profit organizations (NPO) have members and profit oriented organizations have shareholders NPO members cannot receive any financial gain shareholders expect to make dividends and capital gains Powers of a NPO are limited to what is written in the objects

14 Stakeholders Who Are They Employees Partners Public Funding agencies Sponsors

15 What Could Go Wrong Directors' liability under the Income Tax Act and related statues HST Workers Compensation etc. Breach of fiduciary duty Liability due to lack of corporate authority

16 Other Legal Requirements Environment Act Health Act Labour Standards Code PIPEDA Occupational Health and Safety Act Income Tax Act Volunteer Protection Act Workers Compensation Act.

17 Board Of Directors Duties

18 Duties Tasks Responsibilities Rights Individual Board Members Duty of Care and loyalty Duty of Knowledge Duty of Diligence Duty to Manage Fiduciary Duty Duty to act within scope of authority Being accountable for the NPOs affairs Transparent activities Avoiding conflict of interest Fiscal responsibility Establish Strategic direction Mission, vision and values Implementing assessment and control procedures Understanding role of the board Duty of skill Planning for succession and diversity Maintain confidentiality Understand the operations of the Board Establish code of ethics Establish policies Commitment to staff of the NPO Review budgets and financial information Clear understanding of the role of the board Obtain necessary training and professional advice where appropriate Notice of meetings Ability to vote at meetings Attend meetings Voice your opinion Notice of meetings Attend training sessions Ability to vote at meetings Access to management Access to books and records Access to governance documents and explanations Ability to vote at meetings Attend meetings Read all information Contribute your opinion Attend meetings Read all information Contribute your opinion Understand financial matters Understand the role of the board Use all of your skills

19 Directors' Duties Duty of care and loyalty Duty of knowledge Duty to manage Fiduciary duty Duty to act in scope of authority Duty of skill

20 Duties of Care, Loyalty and Diligence Reasonable person Accountability Transparency Confidentiality Establish policies

21 Duty of Care What would a reasonable person do? Act honestly and in good faith with a view to the best interests of the organization.

22 Duty of Diligence Attend meetings, pay attention and contribute your opinion. Take any action that will preserve the integrity and reputation of the organization

23 Due Diligence Reliance on experts Reliance on management Be clear on the incorporating documents and bylaws Directors' insurance

24 ADAPPT Board Decision Making Framework Authority Diligence Accountability Policy Prudence Transparency

25 Duty of Knowledge Duty of knowledge Get to know the organization Governance documents Mission, vision and values Bylaws Policies

26 Fiduciary Duty Ensure that funds are spent in accordance with policy and legal requirements. Ensure that funding agreement rules are adhered to Act in organization s best interest

27 Duty of Skill Bring your skills to the organization Anticipate the potential consequences of any actions taken by the organization Do you have any special skills? Succession and diversity planning.

28 Directors Rights Notice of meetings Ability to vote at meetings Access to management Access to books and records Access to governance documents and explanations Power to borrow and invest

29 Individual Responsibilities Attend meetings and voice your opinion To be familiar with the goals, policies and procedures of the organization To represent the best interests of the organization at all times Understand financial matters Understand the role of the board Use all of your skills

30 Agenda Workshop One What is governance and why do you care? Board of directors and organizations The five questions Stakeholders What could go wrong? Framework for directors responsibilities Individual responsibilities

31 Debi J. Peverill CA Sign up for weekly tips at (902) Dartmouth Road Bedford, NS, B4A 3X6