We provide an overview of five key elements to the operations and processes of good governance - alongside some fantastic guides and templates.
Achieving and maintaining a good standard of governance requires a co-operative to establish robust operations and processes that act as a road-map to signpost its appointed officers to carry on governance in an effective way. Here's five key elements of operations and processes:
Policies and procedures
In addition to the governing document, any co-operative regardless of size, type or business operation will need to establish a range of policies and procedures to support its operation. From developing a detailed set of standing orders to a statement on how the co-operative will embrace equality and diversity, a growing co-operative should continually review and update its policies so that they are clear, workable and complement and develop good governance.
Checks and balances
A key aspect of good corporate governance is to ensure that any co-operative has the appropriate checks and balances in place to support its Board to act in the co-operative's best interests. These checks and balances will depend on the complexity of a co-operative's governance structure but include ensuring, where appropriate, that there is a clear delination between the key roles of chief executive and chair and that there are effective mechanisms in place to evaluate the performance of the board.
Structure and plan
The Board is responsible for ensuring that its co-operative has an appropriate system of governance in place and establish frameworks for risk management and internal controls that are delegated, as appropriate, to committees who can oversee this work. This framework will depend on the co-operative's size and complexity but at a fundamental level will play a key role in the management of risks that may impact the Board being able to carry out its role effectively.
Effective decision-making happens when people in clearly defined roles have clear objectives and priorities and are supported with the appropriate resources and processes in place to make them. Asking questions like those below (and knowing/finding the answers) will enable a growing co-operative to operate effectively:
- Who is empowered to make which decision?
- Who must they consult when they make those decisions?
- What process must they use to make and record each decision?
- How will outcomes be monitored?
- How will effectiveness of the decision-making process be monitored?
In order to operate as an effective board, it must be able to do so in an environment where its members adopt and observe appropriate boardroom behaviours. Developing appropriate behaviours is a continual process that all co-operatives must develop as part of their systems of governance and is especially important for co-operatives operating through a period of growth, change or expansion when effective decision-making is often at its most important.