![]() Governance structures should include a clear accountability framework that shapes how an organisation's (or project's) financial and operational performance will be monitored and reported. Governance practices need to support accountability. Element 6: Be clear about accountabilities and transparent about performance against them Good practice involves preparing formal stakeholder engagement plans or formal relationship protocols with important stakeholders. Effective stakeholder engagement is of particular value in understanding stakeholder views when making important decisions, forming strategies, and identifying sources of funding. Strong relationships between governors and stakeholders are important. Element 5: Invest in effective relationships built on trust and respect An effective board will have members who bring multiple perspectives, who debate issues robustly, and who then speak with unity of voice and message about the decisions made. Having the right mix of people and skills on a governing body should help it to be more effective. The level of trust between people – between governors, management, and stakeholders – affects the effectiveness of the governance arrangements. Element 4: Involve the right peopleįor governance to be effective, it is critical that the right people are involved. This is achieved through establishing and approving policies, making decisions, and the approach and behaviour the board takes to its work, both with management and external stakeholders. The leadership role of governors is to set a suitable tone from the top that shapes the culture and demonstrates the desired values and ethics of the organisation. Element 3: Lead by setting a constructive tone ![]() However, the art of effective governance is in the execution of what is set out in the charter. Clear roles and responsibilities make the differing interests transparent and foster effective decision-making.Ī governance charter, or governance statement, can be a useful way to outline the structures, principles, and processes to be followed. The roles and responsibilities of each party, including governing board members, shareholders, management, staff, and other parties (such as stakeholders) must be clearly defined. Element 2: Have clear roles and responsibilities that separate governance and management Strategic direction-setting includes setting realistic medium- and long-term outcomes and short-term priorities, and expenditure/investment choices and budgets.Ĭlarity of purpose is also important at the specific project and programme of work levels. Governors need to contribute to, and challenge, the strategic planning process, based on an understanding of stakeholder expectations and the wider context that their organisations operate in. Governors' strategic thinking and planning to prepare a coherent strategy is fundamental to effective governance. Element 1: Set a clear purpose and stay focused on it
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