Board
A board of directors is a group of individual directors appointed to oversee a corporation's governance and performance.
Role of the board
The board's role is to provide high-level oversight, strategic direction, governance, and accountability to ensure the corporation is operating effectively, lawfully and in the best interests of its members while working towards achieving the corporation's purpose.
The board is responsible for driving the corporation forward while keeping it under control and operating lawfully. There are 2 main areas the board looks after:
- overall corporation performance. The board sets the corporation's strategic direction and ensures the corporation has and follows policies designed to help the corporation achieve its objectives. Day-to-day management of the corporation is delegated to the CEO, but the board is ultimately accountable to members and other stakeholders for the corporation's performance.
- overall corporation compliance. The board ensures the corporation complies with legal, regulatory and other industry obligations specific to the corporation's operations.
While overseeing the corporation’s performance and compliance, the board also balances the interests of its members and stakeholders. Which stakeholders are relevant to an Aboriginal and Torres Strait Islander corporation will depend on the law and regulations, traditional lore and culture, its activities, and where its money comes from.
Boards make a lot of decisions about the corporation’s priorities and how it allocates resources. However, the board’s job is not to run the corporation’s business. Its job is to stand back from the day-to-day management and provide longer-term strategic thinking to help shape the business. The board sets the framework for the corporation, the direction, and approach.
Directors perform their role by working together and individually.
Directors are accountable to members, employees, stakeholders, regulators for different aspects of the corporation's performance and compliance.
Board responsibilities
The board’s responsibilities include:
- making sure the corporation operates according to its rule book and the CATSI Act
- making sure the corporation operates according to other laws that apply to it
- setting the strategic direction for the corporation to achieve its purpose
- overseeing the corporation's finances
- managing the performance of individual directors
- overseeing the performance and remuneration of the CEO
- setting policies for the corporation's staff and operations
- managing stakeholders.
Learn more about board responsibilities (responsibilities shared by the whole group of directors).
Directors also have responsibilities as individuals.
Powers of the board
The structure and powers of a board are set out in the corporation's rule book. The powers of directors are set out in section 274-1 of the CATSI Act as a replaceable rule, so check your corporation’s rule book to see if your corporation has replaced this rule.
The CATSI Act says the powers of directors are to:
- provide direction for managing the business of the corporation
- exercise all the powers of the corporation, except any powers that the CATSI Act or the corporation puts in its rule book that have to be exercised in a general meeting of members. For example, the directors may enter into contracts and borrow money in the corporation’s name.
Powers of the corporation
Incorporating gives your group its own separate legal identity. This means a corporation can sue, be sued, enter into contracts, own property and so on.
The board must apply due care and diligence when exercising the corporation's powers because the corporation, as a legal entity, can be sued and face legal consequences for its actions; for example, entering an unfair contract.
Exercising the board's powers
Board decisions can only be made together
The board of directors can only exercise its powers when acting as a collective (a group). An individual board member cannot make decisions on behalf of the corporation unless they are authorised by a resolution of the board to do so. This rule includes the chairperson.
Each board member has an individual legal duty to ensure they contribute to making the best possible decisions on behalf of the corporation. However, the board members share the power to make a decision.
All board members are responsible for the decision, even if they may have not
Board decisions must be respected and honoured
The board's job is to make decisions on what is in the best interests of the corporation. The process inside the boardroom will involve honest and robust discussion, and possibly debating disagreement between directors. What is communicated outside the boardroom should be only the final decision or direction, even if you disagreed with it during the decision-making process. The board should speak with one voice. One board = one voice.
This practice respects that the board only holds authority as a single body. It supports important messages and builds trust in the board.
When a board has directors sending out different messages it demonstrates lack of unity, lack of clarity, and lack of governance in the board.
Learn more about exercising a board decision.
Delegating board powers
Unless the corporation’s rule book says otherwise, a board can make a resolution to delegate any of their powers to:
- a committee of directors
- a director
- an employee of the corporation
- any other person.
Learn more about delegating board powers.
Positions on a board (office bearers)
Some corporations allow their board to elect who will be the chair or fill other office bearer roles, other corporations elect people to these specific positions at the AGM.
Chairperson
The chairperson role defined in the CATSI Act has responsibilities with controlling and facilitating corporation meetings. In the board context, the chairperson manages board business and acts as a facilitator and guide for the board, and is often the main point of contact with the CEO.
Some corporations extend the chairperson's role to perform other functions such as speaking about the corporation at functions or as a media spokesperson.
Learn more about the role of the chairperson and appointing one.
Other positions
Some corporations specify other positions (office bearers) such as:
- a deputy chairperson to assist the chair and take on duties if the chair is away
- a secretary to ensure the corporation complies with rules and regulations and maintains records (this position is mandatory for corporations that are large in size)
- a treasurer to manage the corporation’s financial affairs, including budgets, accounts and report.
Board composition
A good board has a mix of talent, skills, experience and personalities to support its effectiveness. There is no one-size-fits-all composition. Some requirements are set in the CATSI Act, and corporations should consider what other skills and attributes they need to support their purpose and strategic goals.