Board of Directors

The Board of Directors (the Board) jointly supervises the activities of a PBC and creates the PBCs strategic direction and purpose. The board’s powers and duties are outlined in the PBC rule book and encompasses regular meetings, responsibility for the finances or the corporation and the legal responsibility for its actions and ventures.

One of the responsibilities of a board member is to attend board meetings where:

  • updates are provided
  • decisions are made
  • ideas are shared and discussed
  • tasks are shared and reported on
  • board members can meet each other personally and professionally.

How to behave as a director in meetings is outlined in meeting etiquette as well as in this information on ethics in the board room mostly documented as Code of Conduct.

The board directors are appointed for a fixed amount of time based on the PBC rule book. Making sure that new directors are prepared for their duties on a PBC board and ensuring that corporate knowledge is not lost is an important process called ‘induction’.

Induction

Induction helps new directors to quickly and clearly understand their role and responsibilities and the PBC’s business and activities. Mentoring by an experienced board member is an efficient way for new directors to learn quickly and develop confidence.

Usually the board and senior management are responsible for inducting new directors, but there is no set process. Induction will look different for each PBC depending on its size and complexity. However, there are certain important steps that all PBCs can consider (tips on developing a board induction, board induction checklist template).

Directors should be familiarised with the PBC, its business and operational environment. This should include a tour of the PBC office; meetings with the board chair and CEO; and training on their role and responsibilities to their members and common law native title holders and their duties under the NTAPBC Regulations and the CATSI Act (see directors duties factsheets). There may be other training required relevant to the director’s role (for example financial training) that should be identified during the induction process. This is also the time when any outstanding documentation (such as appointment letters or declaration of interest forms) should be completed.

It is good practice for an organisation to prepare a new director by providing an induction pack which should include information directors require to commence their duties. The information provided may be somewhat different for each PBC. However, the basic information that should be provided to new directors includes:

  • the terms and conditions of appointment to the board
  • board members’ role description
  • information about director legal duties and liabilities
  • PBC’s policies and procedures
  • specific board policies and procedures
  • PBC rule book
  • PBC structure
  • most recent annual report
  • previous board meeting minutes (for the last six or twelve months)
  • list of all board members and contact details
  • details of board subcommittees
  • financial information (such as financial statements and audit reports)
  • risk assessment information (including the PBC risk register).

Some resources on induction processes and developing induction packs for new directors can be downloaded when becoming a member of the Australian Institute of Company Directors and the Governance Institute of Australia.

Keeping corporate knowledge

Corporate knowledge or memory refers to the history of an organisation and its activities – often captured in records. This history is important for guiding new decisions and should be documented where possible in minutes and other records.

Four strategies might help in keeping corporate knowledge when directors change.

  • mentorship system
  • handover records
  • succession planning
  • keeping good records.

For example, corporations need to organise larger events periodically such as board or annual general meetings (AGMs). Good records of planning and executing such an event will help the next person to do so without too much effort. These records can include contact details of suppliers, invites, schedules and all other documents of key milestones in planning the event.

Mentorship system

Establish a mentoring system where longstanding board members help new directors to orient themselves, provide a sounding board for ideas, give advice or guidance and provide introductions to their networks. Independent directors with their specialised skills can also feature in a mentoring role.

Handover

When directors leave their seat on the board ask them to ‘handover’ their position by recording their experiences - good and bad -, their contacts and their vision and recommendations for the future of the organisation. This will help the new directors to benefit from the experiences of their predecessors.

Succession planning

Furthermore, succession planning enables boards to bring fresh expertise and leadership into an organisation and ensures that knowledge accumulated by directors stays within the organisation when they leave.

Keeping good records

Managing relationships

An up-to-date contact lists of all people the PBC is dealing with helps with managing relationships. These include:

  • people approached in local, state and federal government
  • contact persons for funding agencies
  • politicians
  • journalists
  • potential sponsors
  • research and business partners
  • suppliers

Planning events and projects

AGMs are to be held once a year and bring together all members, staff and directors of your PBC. This a big event and requires careful planning often weeks and months ahead. There is much time spent in the preparation process but often not much time in documenting the process. Imagine all staff who prepared the last AGM are suddenly not turning up to work, how valuable are the records from planning the last AGM. They should include all matters of preparing and executing an AGM such as:

  • planning documents
  • schedules
  • call to meeting
  • invite list
  • vital contacts
  • catering plans
  • details of venues
  • budget
  • invoices
  • agenda
  • meeting minutes.

After the AGM take time for a debriefing session with staff and the board to discuss the good and bad and how to make it better next time. Add the notes of this debrief to your AGM records.

Such record keeping is also valuable for any other project your PBC is engaging in.

Further resources