Public entities are a diverse group of organisations established using a range of legal forms to perform a range of public functions.
Governance requirements vary depending on the features of a public entity.
Establishing a public entity and setting out its mandate and what is expected of it is normally the role of the responsible minister and portfolio department.
During the phase in which a public entity is established the following matters should be considered:
- Establishing the most appropriate legal form for the public entity (for example, decision-making, advisory or quasi-judicial) and the type of board.
- If applicable, enacting enabling legislation for prescribing the functions, powers and responsibilities of the public entity and board, as well as ministerial accountability for the public entity. It includes determining relationships between all key parties, including the managing of key relationships. It also includes a clear understanding of expectations and role expectations and inter-relationships between the Board, management of the public entity, minister and department.
- Providing the public entity’s initial resourcing requirements.
- If applicable, providing the newly appointed public entity board chair with clear overall requirements and expectations including:
- mandate: applicable legislative requirements and government policy, ministerial directions, performance and compliance expectations
- obligations to ensure the public entity’s purpose and intended outcomes are clear
- internal planning, budgeting and routine reporting and forecasting requirements
- identification of high-level risks to be managed
- audit requirements
- annual reporting requirements
- expected relationships with similar or related public entities.
All those concerned with the governance of a public entity need to be clear as to:
- the nature of the public entity
- its purpose and mandate
- the applicable legislation
- and any other requirements it must satisfy.
From the outset, the role of the board in ensuring all requirements are fulfilled needs to be fully understood by the board and the chair.