basic governance - topscore · 2016. 4. 28. · debi j. peverill ca •[email protected] •sign...

www.BasicBoardGovernance.ca

Basic Governance

Debi J. Peverill

Governance Workshops

• 1. Basic board governance

• 2. Financial literacy for board members

• 3. Strategic planning

• 4. Policy development



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


What is Governance?

• Governance refers to

the overall process

and structures used

to direct and manage

operations and

activities.

Governance is everywhere?

• Governance applies to:

Businesses

Non profits

Trusts

Partnerships

Families


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.


Governance Buzzwords

• Accountability

• Financial management

• Internal control

• Public engagement

• Risk assessment

• Stakeholder

• Statutory requirements

• Strategic Direction

• Transparency


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


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


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?


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


Stakeholders – Who Are They

• Employees

• Partners

• Public

• Funding agencies

• Sponsors


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


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.


Board Of Directors Duties

Duties Tasks Responsibilities Rights Individual Board Members

Duty of Care and loyalty

Being accountable for the NPOs

affairs

Transparent

activities

Maintain confidentiality

Notice of meetings Ability to vote at

meetings

Attend meetings Voice your

opinion

Duty of

Knowledge

Avoiding conflict

of interest

Understand the

operations of the

Board

Notice of meetings Attend training

sessions

Duty of Diligence Fiscal

responsibility

Establish code of

ethics

Establish policies

Ability to vote at

meetings

Attend meetings

Read all

information Contribute your

opinion

Duty to Manage Establish Strategic direction

Mission, vision

and values

Commitment to staff of the NPO

Access to management

Attend meetings Read all

information

Contribute your

opinion

Fiduciary Duty Implementing

assessment and

control procedures

Review budgets and

financial

information

Access to books

and records

Understand

financial matters

Duty to act within

scope of authority

Understanding role

of the board

Clear understanding

of the role of the

board

Access to

governance

documents and explanations

Understand the

role of the board

Duty of skill Planning for succession and

diversity

Obtain necessary training and

professional advice

where appropriate

Ability to vote at meetings

Use all of your skills



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

Duties of Care, Loyalty and

Diligence• Reasonable person

• Accountability

• Transparency

• Confidentiality

• Establish policies


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.



Duty of Diligence

Attend meetings, pay attention and contribute

your opinion.

Take any action that will preserve the integrity

and reputation of the organization


Due Diligence

• Reliance on experts

• Reliance on management

• Be clear on the incorporating documents

and bylaws

• Directors' insurance

ADAPPT Board Decision Making

Framework

• Authority

• Diligence

• Accountability

• Policy

• Prudence

• Transparency



Duty of Knowledge

• Duty of knowledge

Get to know the

organization

Governance

documents

Mission, vision and

values

Bylaws

Policies

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


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.



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


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


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


Debi J. Peverill CA

• [email protected]

• Sign up for weekly tips at

• www.BasicBoardGovernance.ca

• (902) 468-1414

• 206-15 Dartmouth Road

• Bedford, NS, B4A 3X6

mailto:[email protected]

http://www.BasicBoardGovernance.ca

basic governance - topscore · 2016. 4. 28. · debi j. peverill ca •[email protected] •sign...

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