Good governance provides the foundation for high performance.
It strengthens community confidence in public entities and helps ensure their reputations are maintained and enhanced. It should enable public entities to perform efficiently and effectively and to respond strategically to changing demands.
Governance encompasses the processes by which public entities are directed, controlled and held to account. It includes the processes whereby decisions important to the future of a public entity are taken, communicated, monitored and assessed.
Governance in the public sector is built on:
- constitutional, legal and government frameworks
- government decision making and reporting
- authorisations and delegations in decision-making
- accountability, transparency, integrity, stewardship, efficiency and leadership
- values and codes of conduct
- effective risk management
- the integrity bodies – protecting public entities against crime and misconduct.
A board with decision-making powers is formed to govern a public entity.
Governance gives practical meaning to public sector accountability obligations. For such public entities, governance defines the relationships between the board, senior management, the minister, portfolio department, stakeholders and integrity bodies.
Central to the accountability framework is ministerial accountability to parliament and the electorate. A board is accountable to its minister.
Accountability is also strengthened through the integrity bodies, which report to parliament. They include the Independent Broad-based Anti-corruption Commission (IBAC), auditor-general and the ombudsman.
The parties that play a governance role in a public entity generally include:
- minister (and parliament) and those who support the minister directly
- department (and departmental secretary)
- public entity board and non-executive (and executive) board directors
- board chair
- board committees (and chairs of the committees), including audit and risk management committees that could include specialist independent members who are not themselves directors of the public entity
- board secretary
- chief executive officer
- chief finance and accounting officer (or chief financial officer)
- public entity managers and other employees
- other stakeholders.