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Institute flags aged care governance risks, launches new resource

The directors of aged care boards are facing “key tests” including a high regulatory burden, increasing consumer choice and changes to funding, the Governance Institute of Australia has warned.

Boards of aged care providers will be subject to increasing scrutiny and pressures as the growth in demand for services comes amidst issues of affordability and sustainability in the sector, the institute has said.

Steven Burrell

“Directors will need to ensure that they are capable of making informed and effective decisions and have in place governance frameworks to enable this,” said the institute’s chief executive Steven Burrell.

There are long-standing concerns about whether the boards of aged care providers, particularly of smaller and rural organisations, are sufficiently diverse and possess the necessary skills and knowledge to navigate the changes unfolding in the sector.

Experts have previously told Australian Ageing Agenda that directors must have a good understanding of their compliance and legal responsibilities and their policy development and strategic planning roles (read our coverage here and here).

But now a new resource from the Governance Institute aims to provide directors with guidance to help them face the challenges of a sector going through unprecedented disruption.

The institute’s free guide, Adding value to governance in aged care covers a range of issues including:

  • factors to consider before taking a board position
  • issues the board should consider when appointing a new member
  • the relationship between the board and management
  • interaction with stakeholders
  • volunteer management
  • risk management responsibilities.

Mr Burrell said the resource was a practical guide for any potential or current member of a board of an aged care provider.

“A lot of boards, particularly not-for-profits, may not be prepared for the regulatory change sweeping the sector and the demands this brings. Boards need to have a designated skillset to overcome the multiple challenges their organisations are facing,” he said.

Large-scale organisational change will be required in terms of workplace arrangements, staff roles, technology, business processes and capital expenditure in order to deliver consumer-driven care, the institute has said.

“Importantly, the guide does not tell boards how to run their organisation, but it does step directors through the issues that they should consider in terms of their governance responsibilities,” Mr Burrell said.

The aged care sector currently employs around 350,000 aged care staff across almost 2,000 aged care providers and is tipped to soon be the largest employer in Australia.

Download the resource here

Related AAA coverage: Why strategy is king in aged care boardrooms

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