Principles of good governance
- Author: Creative Australia, Dr Judith S. MacCormick, Bruce Rolph
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About these principles
These principles act as best practice guidelines. They’re designed to help boards of arts organisations meet their legal obligations.
But remember, best practice is always evolving. These principles, in themselves, can’t prevent failure or mistakes in organisational decision-making. You should use them as a reference point to strengthen your organisation’s governance.
Adapt these principles
While these principles were developed for larger organisations, they can be applied to smaller ones too.
As a board, you should discuss and agree on what to do if:
- a principle isn’t relevant to your organisation
- a principle can’t be reasonably applied given your organisation’s size or resources
- your organisation would like to implement a principle in a different way.
Ultimately, good governance is about people working together effectively.
Principle 1. Create vision, mission and values
The board should:
- contribute to a clear vision for the organisation’s future
- ensure the organisation is aligned on delivering its mission
- model the organisation’s values.
How boards support the organisation’s vision, mission and values
Understand how boards should help organisations achieve their vision, mission and values.
Principle 2. Deliver on performance
To help an organisation deliver its mission, the board should:
- guide and oversee the development of the organisation’s strategy
- build and maintain a strong relationship with the CEO, working together to shape and deliver the strategic plan
- differentiate the roles and responsibilities between board members and management.
How boards help organisations deliver on performance
Understand how boards should provide strategic oversight and how their role differs from management.
Principle 3. Support systems and processes
An effective organisation needs the right systems and processes in place. The board should support these systems, so it can:
- monitor and review the organisation’s activities and financial performance
- ensure staff are paid fairly and responsibly.
How boards support the organisation’s systems and processes
Learn how boards should monitor their organisation’s financial performance and ensure staff are paid fairly.
Principle 4. Be accountable
The board is ultimately accountable for an organisation’s overall performance. It should:
- manage risk and ensure compliance
- ensure reporting is accurate and that the organisation meets its obligations.
How boards uphold accountability
See how boards stay accountable by managing risk and meeting reporting requirements.
Principle 5. Manage relationships
The board plays an important role in managing relationships both inside and outside the organisation. It should:
- engage with various stakeholders to support organisational goals
- promote the organisation through members’ networks and support fundraising
- instil the right culture for the organisation.
How boards manage relationships
Understand how boards should manage stakeholder relationships, balance stakeholder needs and drive culture.
