Territory Stories

9.1 The Board’s Strategic Directions 2016-2020 May 2016



9.1 The Board’s Strategic Directions 2016-2020 May 2016

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Tabled paper 1883


Tabled Papers for 12th Assembly 2012 - 2016; Tabled Papers; ParliamentNT






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Box 4.1: The role of the Board of Directors Accountability (Conformance) Leadership (Performance) External Focus External Accountability External Focus Approve and work with CEO Internal Focus Monitoring and supervising Past and present oriented Policy making Future oriented Source: Robert I. Tricker, International Corporate Governance: Text Readings and Cases, New York: Prentice Hall: 1994, p.149 It is generally accepted that a Board of Directors must simultaneously ensure: Conformance - monitoring management in terms of how well it runs the Corporation in the interest of the community, government, other relevant stakeholders and in accordance with the law, and Performance - setting objectives and working with management to improve the Corporation's delivery against agreed objectives, in particular maximising the benefits delivered against the resources available. Accountability (conformance) The Board's conformance role is primarily concerned with establishing effective accountability. Accountability has a strong past and present orientation; it is the foundation upon which most other things are built. Boards of government-owned corporations have an external accountability to the government as owner and funder, and to regulatory authorities in terms of how each business delivers its services. Internal accountability requires that the Board has policies and processes in place to monitor and supervise the delivery of results by management (and others as required). The depth of this monitoring and supervision by a board will depend on the capability of management. However, going 'hands free' and depending solely on management to deliver what it thinks is required is a flawed governance practice. Leadership (performance) The Board's performance role means setting the strategic direction for the Corporation - deciding what it should and shouldn't do - and ensuring policies are in place to deliver on the strategy. This performance role is primarily about leadership. Boards should not passively rubber stamp management decisions - this would be to abrogate the performance role. In short, boards should actively provide leadership to management to achieve sustained, above-average performance. Setting and approving strategy is an important role for the Board in driving performance of the Corporation. Strategy defines how the expectations of stakeholders will be met, especially community and the Government. Strategy defines the 'success model' for a corporation, because management's day to day decision making should be directed by corporate strategy. However, the planning process often associated with strategy is not strategy per se. What really matters is being clear about the direction the Corporation should take and the possibilities to make this happen; planning can then be undertaken by management within this framework. The internal performance orientation is manifested in policies (and culture) that translate the strategy into an effectively operating corporation. Policies developed by management and approved by their board set up the ways in which a corporation enables its strategy and makes decisions. Policies can include responses to legislative provisions, as well as policies designed to enhance corporation performance. Strategy needs to be underpinned by a set of policies that are focussed on supporting superior performance for the Corporation; so too do the accountability roles outlined above. THE BOARD'S STRATEGIC DIRECTIONS 2016-2020 12

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