Governance in the school context can be a peculiar beast. Boards are usually populated with well intentioned parents and volunteers, the political landscape of schools can involve the school, a school system and/or a religious affiliate and ordinary commercial duties and obligations must be balanced with the overarching duty to act in the best interests of students. Good governance in schools is critical to navigate these peculiarities.
Principles of Governance
Members of school Boards and Councils are bound by the same duties as members of “ordinary” Boards and Councils. These include legislative requirements under the Corporations Act 2001 (Cth) and fiduciary duties.
The Corporations Act 2001 (Cth) imposes standards on members of Boards and Councils to:
- act with care and diligence;
- be informed about matters under discussion;
- act in good faith;
- act for a proper purpose;
- not make improper use of position (ie. as a member of the Board or Council);
- not make improper use of information obtained by virtue of position;
- ask searching questions;
- declare any conflicts of interest;
- not use the position for personal gain; and
- ensure that the school remains solvent.
Further, the Centro decision highlighted the requirement for members of Boards and Councils to maintain familiarity with the financial status of the school, by regular review and comprehension of financial statements.
Ramifications of Poor Governance
The consequences flowing from poor governance are numerous:
- decreased support from parents, stakeholders and donors;
- financial distress;
- media coverage, reputational and brand damage;
- management ineptitude with wider implications (ie. mishandling of complaints, allegations or issues); and
- legal claims from students, parents or employees.
The counter to poor governance, are the tangible and wide ranging benefits that a school will experience from competent governance by its Board or Council.
Distinction between Governance and Management
Governance refers to the responsibility and accountability for the overall operation of the school. Governance is the domain of the school Board or school Council.
Management refers to the day-to-day decision making within the school and the implementation of the Board and Council policies. Management vests with the Principal and his/her senior executive staff.
The relationship between the Board or Council and the Principal of the school will set the barometer for the effectiveness of the governance and management of the school. This relationship must be characterised by respect, trust, confidence, support and open communication. It has been informally referred to as a relationship where the Board or Council makes the decisions and the Principal sells those decisions to the school community.
A poor relationship between the Board, the Chair and the Principal is toxic to a school.
Population of the Board or Council
It has been said:
“There is no place for well-meaning amateurs who only have the interests of the children at heart on today’s school Boards.” Domini Stuart
Regardless of the truth of this statement, school Boards and Councils are frequently populated by parents, members of the community and other volunteers who may hold no relevant qualifications nor have any commercial experience. Schools, practically, do not have the luxury to exclude such persons from their Boards or Councils. Instead schools should consider strategies in relation to recruitment, induction, education and succession for the members of their Boards and Councils.
Such strategies may include:
- Prior to a call for nominations of members of Boards and Councils, interested persons could be given an information pack or attend a seminar outlining the expectations, duties and commitments of a member of a Board or Council allowing for an informed decision to be made to nominate.
Annual training being provided to members of the Boards and Councils to reskill or upskill in relevant legislative, fiduciary and industry trends. This will supplement the induction training provided to new members of Boards and Councils.
Providing the opportunity for members of Boards and Councils to attend external education and development seminars and courses. Any outlay of money or resources to upskill a member of a Board or Council will be returned, with interest, by the increased ability of that member to participate in the governance of the school.
Assessment of the Board or Council
There are some fundamental questions which the members of a school Board or Council should consider, which will clarify their powers, confirm their limitations and avoid any confusion on the delineation between the governance and management of the school.
These questions may include:
- What is source of the Board or Council’s powers? If it is a Constitution or other foundational document, are members of the Board or Council familiar with its terms? Do its terms reflect arrangements currently in force?
Are there any matters that the Board or Council does not have the powers to decide upon, namely matters which must be referred to the school system or religious affiliate (if appropriate)? Do the Board and Council act within those restrictions?
Does the Board or Council have the power to terminate the Principal’s contract of employment, or the employment of other persons within the school? Is the Board or Council involved in any related process of recruitment or termination?
What is the process used by the Board or Council to evaluate its own performance? Does a formal self-review process exist? Does the Board or Council use an external evaluation? Does the Principal or senior executive staff of the school contribute to the assessment of the Board or Council’s performance?
Tips and Tricks
There are numerous examples where school Boards or Councils have had their decisions publically challenged. Such conduct is detrimental to the school, the school community and the individuals involved. It is also the opportunity to consider how those Boards or Councils could have governed more effectively and, subject to the particular circumstances, addressed the matter in a different manner.
Members of Boards and Councils should:
- act in the best interests of the school;
- maintain confidentiality of all discussions and decisions;
- act with integrity, honesty, diligence and accountability;
- disclose all actual, potential and perceived conflicts of interest;
- undertake formal professional learning, such at the AICD Company Directors Course; and
- focus on strategy and strategic thinking.
Member of Boards and Councils should not:
- fail to speak up at meetings or raise concerns as appropriate;
- disregard or underestimate the solvency of the school when accruing a debt;
- over-commit with other responsibilities; and
- use meetings to demonstrate superior intellect, knowledge or excellence.
Boards and Councils have the capacity to greatly affect the success, or otherwise, of their school. The direction and oversight provided by the Board and Council, and the adherence to the fundamentals of good governance, are the foundations of a successful and sustainable school.