Many aged care board directors have limited understanding about their actual key roles and responsibilities, a governance masterclass has heard.
Around 30 board members, directors and chief executives and Australian Ageing Agenda attended Australian Strategic Services’ masterclass in Sydney last Thursday on Standard 8, Organisational Governance, one of the 8 Aged Care Quality Standards.
The national series of masterclasses focuses on bringing directors, chief executives and executives up to speed on organisational governance, its relationship to corporate governance along with their accountabilities and responsibilities.
Organisational governance is an enabler and supporter of corporate governance, said Michael Goldsworthy, principal consultant at Australian Strategic Services.
“This is a significant shift and lift in leader’s ultimate responsibility and accountability for the quality and safety of care and services for people who are ageing, whether they are in the home or in residential care,” Mr Goldsworthy told AAA.
The board has two key governance roles
Mr Goldsworthy said the board’s two key governance roles are to firstly act in the best interests of the organisation and secondly act in the best interests of relevant stakeholders.
He said the board’s four key responsibilities are:
- strategic leadership
- policy-based decisions
- monitoring and reviewing
- compliance and coverage.
“There is still fundamentally not a deep understanding of those two key roles and four key responsibilities and their practical application to the board and to the organisation,” Mr Goldsworthy said.
“There has been significant improvement in recent years in the understanding of governance principals and practices, but we’ve increasingly got to turn governance theory into practice,” he said.
Mr Goldsworthy used a sailing analogy to demonstrate the importance of acting in the best interest of an organisation.
“When a board is acting in the best interest of the organisation, they’re mindful that the organisation is essentially a boat. And they, the directors on the boat, need to keep it out of stormy weather, off the rocks and in safe waters because ultimately, they are the custodians or stewards of that organisation,” Mr Goldsworthy said.
Participants share their governance concerns
A treasurer of a not-for profit residential aged care provider in Sydney said he was concerned about adequate understanding among the 11 board members at their organisation.
“I would say four maybe five understand 70 per cent of their responsibilities, two or three understand 100 per cent of their responsibilities and the rest don’t understand any,” the treasurer told AAA.
“We have a board that has a mixture of old and new, qualified and not qualified and they are finding difficultly moving on and improving activities because the old members are saying ‘I’ve done it for 40 years and look where we are, and therefore there is no need to change,’” the treasurer said.
In order to meet the requirements of Standard 8, the treasurer said their organisation would need to reassess its board members.
“The first thing we have to do, to have some positive forward movement is to change the constitution of our association.
“With this set up in the 1970s and 1980s, certain restrictions in that will not allow us to remunerate people who are worthy of being brought on the board,” the treasurer said.
Boards warned against recruiting relatives
Another participant told the masterclass that board members in their organisation were generally appointed through families and friends.
“We are trying to get out of this habit [because] 60 per cent don’t understand any of the governance and are not interested,” the participant said.
Mr Goldsworthy warned providers about adopting such an approach.
“If family members have appropriate experience, skills and knowledge and can add value to the board, then yes, but if they don’t, what’s the point of having them on the board?” Mr Goldsworthy said.
The Standard 8 Organisational Governance masterclass took place at Twin Creeks Golf and Country Club at Luddenham in New South Wales on 19 September.
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