Separation of roles
Separation of roles is a model of governance.
Under this model or ‘organisational structure’, the responsibilities of being part of a corporation are divided among different groups. It means that no one group can gain too much power. This is because each group has ways it can review or limit the action of another group—in other words, checks and balances are built in.
'Know your boundaries is the best tip I’ve heard about separation of roles,’ says the Registrar, Anthony Beven.
In very small corporations, which often don’t have the means to employ a manager/CEO, the practical everyday tasks that are usually carried out by a manager/CEO are performed by the directors. In such cases the directors take on the responsibilities of senior staff. However, as the corporation grows and its activities expand, there will be a need to employ a manager/CEO and it will be necessary to draw boundaries between the responsibilities of the directors and those of the manager/CEO.
Directors: If there is an issue with the manager/CEO or other senior staff it is up to the directors to deal with it.
Members who have concerns about the directors—for example, about the way the directors govern the corporation and/or manage senior staff—can consider replacing them with others whose approach may be more in keeping with their own. A general meeting needs to be specially called for the purpose.
ORIC’s fact sheets Members’ rights and What’s in the corporation’s rule book deal with members’ requests for meetings and the removal of directors.
Go to www.oric.gov.au/resources.
Need help with corporate governance training?
ORIC can tailor workshops to suit the needs of individual corporations. If you have questions about the separation of roles or any other aspect of corporate governance phone ORIC for advice. You can also register your interest in an ORIC corporation specific training course.
Background photo: Separating the pandanus for weaving, Ramingining, Arnhem Land, Northern Territory. Photo: Penny Tweedie/Getty images
More: See the full November 2014 newsletter