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What makes a good governing body?

A governing body should involve a good mix of people and skills in order to provide a variety of viewpoints and ideas. Changing the makeup of those involved over the years is advised in order to avoid a ‘sameness’ and the risk of being unwilling to look at new opportunities. It can also be helpful to have someone independent of the organisation involved to provide an external perspective which isn’t based on potential financial or personal gain.

For some organisations it can be a good idea to form an advisory board on specialist issues (such as safety) with people who can bounce ideas around, evaluate and then present information to the governing body.

A governing body must exercise good governance and should also have a good understanding of:

  • risk management
  • safety systems
  • accident and incident trends
  • project and change management
  • culture change and maintenance, and
  • assurance.

Governing body priorities

While there are a number of issues a governing body must focus on, one of the main priorities should always be safety, which is essentially preventing injuries to staff, volunteers, visitors and passengers.

Setting out the schedules for maintenance, track inspections, training and certifications are all basic requirements for a safety management system and should be referenced by the safety case. The areas that the governing body should be focusing on include:

  • risk management
  • strategic planning
  • maintenance and inspection procedures
  • internal audit (assurance), and
  • communications.

The governing body is also responsible for ensuring that all business objectives and policies work well as a whole. By having oversight of the organisation’s financial, production and safety policies, the governing body can ensure they’re complementary and that the targets are realistic as a package. Conflicts of priority shouldn’t be left to workers to sort out.

For more information on expectations as per the Railways Act, see our ‘So far as is reasonably practicable’ page.

Evaluating a governing body

In order to determine if a governing body is carrying out its function and purpose adequately, it is good governance practice to regularly assess performance. This is not in terms of whether the organisation has had a good year, or whether a formal requirements checklist has been satisfied, it’s about assessing the wider issue of performance.

To do this, consideration of the following is recommended 1:

  • Who are the board's stakeholders?
  • How would the board's stakeholders rate the performance of the board?
  • Do all directors participate effectively and constructively in discussions and decisions at the board table?
  • Are all the relevant matters brought to the board table for discussion by the whole board, or do cliques form away from the board table to resolve issues informally?
  • Do directors have a proper understanding of the business as a whole and the key factors and drivers that will determine success or failure?
  • Are directors capable of thinking both strategically and imaginatively?
  • Do directors read and understand board papers?
  • Do directors play a constructive role in testing and refining policies brought to them by management?
  • Do directors feel that they can raise dissenting points of view in an environment of candid discussion?
  • Does any one individual or group dominate the board?
  • Do directors understand the management accounts and use them to analyse the financial performance of the business?
  • Do directors have an effective capacity to identify, analyse and respond to the different types of risk the company may face?
  • Does the board ensure that its processes and requirements reinforce the application of the company's values and principles?


1 www.governancenz.org(external link) – Good Governance Guide 1.1

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