Governance of a partnership, whatever form it takes, is as important as governance in a corporation. In fact, it is exactly the same.
Governance is not the same as Management and the two should not be confused – it is critically important to keep them separate.
Governance is about providing strategic oversight over an entity.
Management is about coordinating day-to-day operations.
Governance is like the Principal of a school making sure that all the teachers operate to an approved syllabus, to a required standard. Management is like the teachers deciding how to teach topics between Monday and Friday.
If you mix the two up there is a risk that individual teachers will teach topics outside of the syllabus. There is a risk that the required standard of teaching will not be reached. There is a risk that individual students will receive special attention while others receive none. If the Principal decides to interfere with the teaching timetable, they run the risk of not being able to provide the correct standard of teaching within the time allocated.
Having the Principal means that there is oversight over syllabus and standards. Having teachers do the teaching means that their role of providing the right type of teaching is applied.
Governance can be compared to Management as follows: -
|· Governance provides strategic direction – toward the ultimate goal |
· Governance deals with decisions about purpose, vision and values
· Governance decides on core policies to ensure risk is mitigated and goals and values can be met
· Governance provides oversight to protect stakeholders
· Governance supports management
|· Management works to detailed plans about day-to-day operations, cumulatively heading toward the strategic direction |
· Management deals with how to operate while following the set purpose, vision and values
· Management decides on operational policies and procedures that are used on a daily basis
· Management reports to Governance body
The following is an example of how Governance and Management work together: -
- The Board has worked on a strategic plan that sets a strategic direction to provide training to youths so that they can work on Landcare, and to find them employment in various land management projects;
- The Board has also approved core policies that the training is to be provided to youths from the local region and that as far as possible these youths should be employed in land management projects;
- The management seeks training providers and negotiates with them to provide training and employment support for youths in the region;
- The management receives a proposal to include these youths as part of a general training scheme for job-readiness, not just Landcare, and open to all youths from the State;
- The management rejects this and finds a local RTO who will meet their requirements, even though this is slightly more expensive;
- The Board is provided with a report, and although they are concerned about the extra cost, they ask if it can be supported, and being shown it can, and that this follows the strategic plan, they do not interfere;
- The management start to employ some of these youths on completion of training but find that they are lacking in experience needed, so they employ some other youths with more experience;
- This leads to fewer employment opportunities to local youths and the Board voices its concern to management;
- Management takes this concern into account and reallocates budget items to allow more on-the-job training and increases the proportion of local youths employed.
In the above example, the Board and Management stay within their governance roles and responsibilities and do not interfere with each other, although they do ask questions of each other and take heed of relevant concerns. In this way, the operationalisation of the strategic plan is allowed to happen in an effective manner.
Another way it could have gone is that the Board could have jumped in when they see the extra cost of the local RTO and members of the Board find and negotiate with the original proposer. This may have resulted in less intensive training for local youths and would provide management with poorly trained staff to carry out the rest of the Strategic Plan.
Or, management could have ignored concerns about the number of local youths employed – at the end of the project the outcome sought of a local workforce looking after local land is not achieved.
An important part of the governance of partnerships is in agreeing what the roles and responsibilities of the individual partners are. The partners represent different groups or communities and so some thought, discussion, and agreement need to be undertaken to ensure that everyone understands what their roles and responsibilities are to avoid future disputes.
In different partnerships, the partners bring different roles. This is usually why partnerships are formed – to use the different skills, talents and experience of different partners into the mix so that together, all are stronger than individually. For example, one partner may bring political or strategic connections, while another has access to a skilled labour force. In this example, the role of the first partner may be to source funding and grants, and to seek informal partnerships with agencies and other groups. The role of the second partner may be to provide the initial employees of the partnership and to develop a training and development program for the members of the first partner.
These roles also have attached responsibilities. In the above example, the continued funding of the project is the responsibility of the first partner. However, to make it a true collaboration, the second partner must do their part within the partnership – for example by being aware of different grants and providing that information to the first partner. Similarly, while the role of the second partner is to provide training and development, the first partner must ensure that their people are ready and willing to participate.
Apart from the general roles and responsibilities of the partners, each partner may also have roles and responsibilities within the governance of the partnership. They need to explore questions such as: -
- How will each partner contribute to the governance of the partnership? How will office holders be chosen amongst them? Will members of the Board/Committee have “portfolio” responsibilities?
- How will each partner maintain the integrity of governance? How will they ensure their representatives uphold the Code of Conduct?
- What is the role and responsibility of the Chairperson? How will that be chosen/rotated?
As well, the partners need to be aware of the difference between governance and management as discussed previously. They need to agree on how they either engage with management or if some of them are in charge of the management of the activity (as well as being involved through representatives in the governance) how this is conducted while maintaining the separation between governance and management. To do this, they need to discuss and agree: -
- Who will have the responsibility of day-to-day management? If it is an unrelated employed Manager, how does this person report to and engage with the Board/Committee?
- If the Manager is a member of the Board/Committee or is a representative of one of the partners, how will they be separated from governance, and how will the Board/Committee ensure that they don’t interfere with his management?
- What is the Board/Committee responsible for, and what is the Manager responsible for?
One further aspect of roles and responsibilities is the recognition that the Board/Committee will make resolutions and decisions. The partners should, therefore, discuss how decisions will be made. What will be the quorum for a valid decision? Will decisions just require a majority? Will they need a special majority, for example, 75% majority? Will they require consensus?
Once agreed, such roles and responsibilities should be included in the partnership agreement document.