This Board Will Self-Destruct in 3...2...1

27 September 2018

The last thing any school executive wants is a school board that is dysfunctional, with open conflict between board members and which does not fulfil its charter for providing good governance of the school from the top down.

Fortunately, most school boards function pretty well, but this article highlights some of the matters to consider to assist boards to function effectively.

The First and Most Important Board Policy

The most essential board policy is the charter or foundation document that establishes the board. Many boards rely on this to govern all their activity when in most cases this document is in fact only a starting point for the development of board policies. Of course any policies developed must be consistent with the foundation charter document.

Few foundation charters provide details about the relationship between the board on the one hand and the executive, and particularly the principal, on the other. Few charters describe the role of the board as being primarily responsible for governance, rather than the operational management of the school. All of these matters should be covered in school board policies. The most important matters are the articulation of the relationship between the principal and the board, the limits of the principal’s authority and clear definitions about the role of the board and the role of the principal and senior executive staff.

Other Essential Board Policies

While some education authorities mandate that there be board policies in relation to e.g. conflicts of interest, related party transactions and board code of conduct, there are many other polices that boards should consider.

Policies that boards should have include those dealing with the evaluation of the effectiveness of the board as a whole and individual members of the board (in both cases including both internal and external evaluation over a one to three-year cycle) and conflict between board members. There should also be policies in relation to how to remove a board member and the process for doing so.

The Australian Standard

There is an Australian Standard, AS 8002-2003 Corporate Governance – Organisational Codes of Conduct (Standard) which applies to school boards. The Standard outlines the essential elements of an effective code of conduct broken down into structural, operational and maintenance elements. The structural elements include commitment from leadership, resourcing and continuous improvement. The operational elements include ensuring the code is well-drafted in consultation with those it will affect. It should include key values and expectations, business dealings, how the code will be implemented, coverage, feedback, administration and record keeping and reporting and action on non-compliance. Maintenance elements include education and training, visibility, communication, accountability and review.

Missing Elements in Board Codes of Conduct

It is surprising how many codes of conduct miss important elements. These include making sure board members have valid Working with Children Checks or the equivalent, ensuring board members are required to self report any circumstances that may disqualify them from sitting on the board and notify the chair accordingly. Examples of relevant circumstances include bankruptcy, becoming a disqualified person (child protection) and being charged with (not just found guilty of) specific criminal offences.

Another item often missed in a board code of conduct is the statements of the law contained in sections 180 to 190 of the Corporations Act 2001 (Cth). These sections cover the duty of directors to act in good faith and for a proper purpose and to act in the best interests of the corporation. Even if particular board members wouldn't technically be governed by these Corporations Act provisions it is difficult to argue against including these matters in a board code of conduct. It sounds obvious but is sometimes not included. In addition, sections on confidentiality are also vital.

Polices on Dealing with Board Conflicts

It is important for boards to develop a policy in relation to board conflicts and there are many examples of these policies available. A key role in any board conflict is the role of the chair. It is important that the chair can effectively lead the board and manage conflicts.

When developing a policy on dealing with board conflicts, one of the first things to do is to define what is meant by "conflict". There are many situations where constructive disagreement at a board level actually helps the board to function effectively and may in fact be an indicator that members are taking an active role on the board. A board where everyone agrees all the time may not be operating effectively.

Conflicts come in a variety of forms:

  • is it a concern about another board member being in breach of the code of conduct?
  • is it a concern about the performance of another board member in their duties as a board member?
  • is it just two members of the board that do not like each other?

This last issue may not be a conflict that the board has to deal with if it is not impacting on board performance.

Good Board Policies

What matters is having good board policies to guide the board through various conflicts. Good policy content should include:

  • defining the types of conflict that the policy is there to address
  • to whom any allegations or concerns should be reported (usually the chair)
  • roles of key board personnel (e.g. secretary)
  • role of the board or board committees
  • how matters will be investigated and by whom – internal or external
  • statements concerning procedural fairness
  • what will happen at the end of the investigation and any further process such as an appeal process.

In response to numerous requests, School Governance has also written a Briefing Paper on Non-Financial Board Reporting for Non-Government Schools. Download a copy of this Briefing Paper here.

Jonathan Oliver

Jonathan is a Principal Consultant working with CompliSpace education clients. He has more than 10 years experience in the school sector as a teacher, compliance and legal adviser and more recently as a Business Manager. Jonathan has been a solicitor for nearly 30 years and worked in both private practice and community legal centres.