What makes a good governing body

A good governing body includes a mix of people with different skills, views and ideas. It’s a good idea to regularly change the makeup of the board to keep it fresh and open to new ideas.

It’s also helpful to have someone independent of the organisation involved. They can give an outside perspective that 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 evaluate and then present information to the governing body.

A governing body should have a good understanding of:

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

Governing body priorities

There are several things a governing body must focus on, but the main one should always be safety, that is, 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 included in the safety case. Areas of focus include:

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

The governing body should make sure all business objectives and policies work well together. Knowing the organisation’s financial, production and safety policies means the governing body can make sure they’re complementary and targets are realistic. Conflicts of priority shouldn’t be left to workers to sort out.

More information on expectations under the Railways Act can be found on the page covering ‘So far as reasonably practicable’.

So far as is reasonably practicable

Evaluating a governing body

It’s good practice to regularly assess governance performance to make sure a governing body is carrying out its function and purpose well. This isn’t about whether the organisation has had a good year, or a formal requirements checklist has been satisfied – it’s about assessing the whole performance.

To do this, think about the following:

• 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?
• 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 main 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 they can raise differing points of view in an environment of open discussion?
• Does one person or group dominate the board?
• Do directors understand the management accounts and use them to analyse the financial performance of the business?
• Are directors able to identify, analyse and respond to the different types of risk the company may face?
• Does the board make sure its processes and requirements reinforce the application of the company's values and principles?

You can find more information on good governance in the Good Governance Guide.

Chartered Governance Institute New Zealand (ICGP) - Good Governance Guide: 1.1(external link)

How can you be sure you’re doing the right thing?

Many incidents happen because of something everyone knew was unsafe, but accepted because they were used to it.

Little things can build up and cause damage or injury, so it’s a mistake to overlook them. Making sure the worst thing doesn’t happen starts with making sure the little things are safe and working correctly.

Make sure everyone in your organisation is happy to speak up if they see something that could be wrong. A big part of continuous improvement is regularly checking things are right and fixing anything that isn’t as soon as possible. Doing this will make sure then business is safe, healthy and compliant.

Use the tools available to you

You can use a variety of tools to help you do your governance duties well, such as:

• your organisation’s safety case – sets out challenges, commitments, resources and the high-level approach
• objectives and policies – clearly state the board’s expectations of staff
• business plans, organisational risk assessments and budgets – does what’s planned match your objectives and is it feasible?
• worker engagement – what’s the shop floor saying? What are contractors and partners saying? How do you reward and celebrate good culture and success? How do you communicate?
• reporting:
  • output – are things going to plan? For example, project reports, risk management, activity levels, training, maintenance schedules
  • audit – what deficiencies are being found?
  • compliance – are you compliant with regulatory standards, are there interventions by NZ Transport Agency Waka Kotahi?
  • outcomes – how are you going against your targets? For example, injuries, incidents, safety tours
  • benchmarking
    • who do you compare yourself against?
    • who do others such as regulators compare you against?
    • can you certify yourself against recognised standards?
    • can you self-evaluate, for example, maturity rating scales?

More information about how to use these tools can be found in a document, put together by WorkSafe and the Institute of Directors:

Institute of Directors (IoD) - Health and Safety Governance: A Good Practice Guide (16 July 2024(external link))