Ministry of Pacific Island Affairs

Understanding governance

Most private or community organisations are governed by a board or committee, which directs the chief executive or management team.

  Differences between governance and management

The board of directors governs the organisation. A chair (chairman, chairwoman, chairperson) leads the board. The board’s role is to ensure that the organisation is well-run, financially sound, complies with relevant legislation, sets the strategic direction and policies of the organisation, and hires the chief executive.

The management team manages the organisation. The chief executive (CE or equivalent title such as CEO, Managing Director, Executive Director) leads the management team. The chief executive is responsible for the day-to-day running and the staff of the organisation.

  Core requirements

Boards and committees require their members to have:

• personal qualities such as common sense, leadership, good judgement, integrity, courage, independence, energy and commitment;
• an understanding of the responsibilities involved, including legal obligations; and
• either specialist knowledge, experience in business or a profession, or extensive community knowledge and experience.

Note: Many boards include lay members who can bring valuable life experience to their work. They can provide a community view and add an outsider's perspective.

  General responsibilities

Boards and committees require their members to:

• have time to devote to the role – the Institute of Directors recommends two hours’ preparation time for every one hour spent in a board meeting;
• play an active role in meetings – contribute, ask questions, request more information, and challenge assumptions; and
• maintain the highest personal and professional standards Understand the issues facing the organisation and the environment in which it works.

Note: Some people become professional directors and maintain a portfolio of directorships. Others combine full-time employment with one or two board appointments.

  Specialised skills and experience required

 The following table gives a guide to some skills and experience required for different directorships: