Issue 1
Your Guide to Good Governance
September 2020
One of the important provisions of the Education (Accreditation of Non-State Schools) Act 2017 is that directors of non-state school governing bodies are required to hold working with children authority with either a current blue card or exemption card.
Impact on Accreditation
The Act is specific in that a school’s accreditation is cancelled if any director does not have a current working with children authority. The Non-State Schools Accreditation Board (NSSAB) does regular checks of school directors and their blue card status and will issue a Show Cause or Compliance Notice where they find a director does not have a blue card or exemption. This will more than likely result in the relevant director having to resign from the board and then be re-appointed once a current blue card has been obtained.
It is not an option for a director in such a position to stand aside; they must resign. A case where a director simply forgot to apply for a renewal or that the renewal process has been slower than anticipated is no excuse - the legislation is very clear that a school’s accreditation is cancelled should a director not have a current blue card.
Changes to the Blue Card System
Directors should also be aware of changes to the blue card system (No Card, No Start) that took effect on 31 August 2020. These changes mean that a director of a school governing body who holds a valid blue card can continue as a director after the expiry date of the blue card, provided the card was not suspended or cancelled, and an application for renewal was lodged prior to the expiry of the card.
Whilst this is a positive change in relation to directors and blue cards, it is strongly recommended that boards continue to pay attention to the working with children authority status for each of their directors.
Next Steps
- It is important that each school director is aware of this requirement and that the school establishes a register of blue cards for directors to ensure that renewal processes are triggered in appropriate timeframes.
- Boards may want to look at the recent blue card changes in respect of other school operations. The best place to get a summary of the changes is the Blue Card Services website.
- ISQ staff are also able to assist schools with information on blue cards and the relevant requirements for schools.
Ensuring all your board directors have a current working with children authority sends a clear message to students, staff, parents and the community that the school has a focus on child protection and ensures that it complies with all Government requirements.
Experience suggests that the renewal of directors’ blue cards can be easily overlooked. Good governance will ensure there are robust systems and procedures in place to prevent this from happening at your school.
David Robertson, Executive Director
Independent Schools Queensland
Strategic Planning: Whose business is it?
The strategic planning process can be an invigorating exercise, energising an organisation to progress towards a shared vision. Arguably, the exact opposite can also be the case. At best, strategic planning is an ongoing, flexible approach by boards and management who remain alert to their school’s ever-changing strategic position.
Whose role is it?
The etymological roots of the word “governance” denote the steering of a ship, suggesting that strategic planning has a firm place within the domain of the board. A frequently asked question concerns the role of the CEO/principal and other senior executives in this process. After the ship’s destination is determined, whose business is it to chart the route, consider contingencies and prepare a detailed berth-to-berth plan for the voyage?
Governance Frameworks
One distinct model of governance is described by John Carver. In broad terms, a board following the Policy Governance® model creates an ‘Ends policy’ to describe the organisation’s strategic destination but does not prescribe how management reach the destination. The board does, however, circumscribe management’s actions using an ’executive limitations policy’ that outlines operational methods and tactics that are not to be used. Both policies need to be specific enough so that any reasonable interpretation would be acceptable to the board. Management’s clearly defined role, in the Carver model, is to create strategic plans and enact tactics to achieve the “ends” within the “limitations”.
The benefits of this model are that it provides ample scope for management to modify strategies and tactics if conditions change, it gives room to maximise the use of executives’ experience and skills, and it establishes clear lines of authority and accountability for achieving the prescribed ends.
Other governance frameworks describe a more collaborative approach to strategic planning. Here, the board’s and management’s roles intersect and complement each other on a gradual scale between the strategic and operational ends of the strategic planning process.
In the collaborative process of setting the strategic direction, the board contributes its collective depth of experience and independence of thought while management adds in-depth knowledge of the operating environment. Management then devises draft strategic options; however, the board always retains its role of reviewing and ultimately approving those strategies.
How to Choose?
Since there is no definitive answer or best practice, boards should discuss and clarify their approach to roles and responsibilities prior to embarking on a new strategic planning process.
Followers of the Carver model might criticise curbing management’s latitude; providing an excuse for not delivering on outcomes, as the onus for selecting unsuccessful strategies rests with the board. However, proponents of a more collaborative approach might gladly accept these costs in favour of boards that are more deeply informed, engaged and committed to strategies developed in partnership with management.
Considerations in choosing an approach may include an evaluation of board members’ and senior executives’ experience, availability of time, resources and support, and the school’s general approach to corporate governance.
Support from ISQ
As part of ISQ’s Governance Services flagship program, our team of governance specialists can provide advice to school boards on this topic. We also regularly facilitate aspects of schools’ strategic planning processes on a fee-for-service basis.
Director Identification Number
It is expected that by mid-2021, all persons appointed as directors of a body corporate will be required to have a director Identification Number (DIN) as part of the Modernising of Business Registers (MBR Program) and under the recently enacted Commonwealth Registers Act 2020.
The intention of a DIN is to enable the tracking of directors in the combat against “phoenix” activity – the illegal tactic of creating a new company carrying on the business of a liquidated company to avoid paying its liabilities.
Prior to this change in legislation, directors did not have to verify their identity and as a result, ASIC’s registers would often include multiple records of the same person. Until now, such incorrect information has restricted the effectiveness of regulators, insolvency practitioners and credit providers.
What You Need to Know
- Under the new system, directors will be required to confirm their identity before being allocated a DIN which will remain with them for life.
- New directors will have to apply for a DIN before they are appointed a director of a body corporate registered under the Corporations Act 2001 or the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
- Existing directors will have an additional 28 days to apply for a DIN (during the first 12-months of the operation of the new requirement).
- The new regime also includes criminal penalties. By way of example, a director applying for more than one DIN or misrepresenting a DIN could face 12 months' imprisonment.
What to do
- Download the Act and Explanatory Memorandum.
- Ensure that all registers of board members e.g. with the ACNC, NSSAB and ISQ, are up to date to ensure a smooth transition once the new regime takes effect.
Sunk-Cost Bias and Board Decisions
All too commonly our personal and work-related decision-making is influenced by the sunk-cost bias: the tendency to continue to invest time, money and effort into an endeavour, even when all the evidence indicates that the ongoing investment is not achieving the intended outcomes.
For example, if a person is on a diet and accidentally order too much food, they are likely to eat more than we had originally planned. They are not compelled to do so, but their ordering mistake affects their subsequent decision-making to overeat.
Another example: A bank manager continues to give loan extensions to a struggling business simply because they have done so in the past. An independent bank manager, who has not been involved in prior loan evaluations, can approach the situation with fresh eyes and may not make the same decision.
Sunk costs are irrecoverable and remain the same regardless of the course of action that we choose next. They should not be relevant to our current decision-making.
Boards are also susceptible to this bias and need to protect themselves.
Consider the following strategies:
- Seek out views and perspectives of people not committed to previous decisions. Engaging the expertise of external experts and consultants may be helpful.
- Examine if the corporate culture allows for critically reflecting and addressing past mistakes.
- Question whether management decisions might be influenced by the sunk-cost bias.
- Be aware of the natural bias to stay on your current course of action. While considering other options, evaluate the status quo as it was just another option, rather than the front-runner.
- Be aware that quitting is not failing, in fact, it can be indicative of a proactive and robust decision-making process.
Board Chair Interview
Brendon Blakemore
Chairman, King’s Christian College
Director since 2001 | Chair since 2011
King's Christian College is a non-denominational, co-educational Christian school operating three campuses in South East Queensland: two on the Gold Coast and a third in Logan Village.
Established in 1980, King's Christian College enrols over 2,200 students and seeks to work in partnership with parents to educate students in Christian leadership for tomorrow's generation.
What excites you about your school?
We have a growing school across three campuses and an increasing number of students. I get a great deal of satisfaction from seeing our strategy come to reality, in our case opening new campuses and seeing students engage with our brand of Christian education.
What prompted you to become a board member?
I had been a parent of King’s for many years and valued the education and character development my children were receiving. When I was asked to join the board, I felt I had the skills to contribute and felt it was a way of giving back to the school community.
How would you describe an effective board?
We often say that the board is the guardian of the ethos of the school and ensures the school operates successfully as a business to enable it to continue achieving its mission. I believe an effective board has both an inward-looking role in terms of monitoring performance and policymaking, as well as a forward-looking function in terms of strategy development.
How would you describe your role as Chair?
I act as a facilitator, ensuring that board meetings are conducted in an effective way and ensuring the views of all board members are heard. I also spend significant time ensuring that the board has all the information it needs to make informed decisions. Another important role is to meet more regularly with the principal and act as a sounding board for them and work through any issues they may be having.
What is your advice for a new school board member?
Carry out extensive due diligence! This should go beyond the usual financial analysis and include strategic and missional matters. Spend some time talking with as many of the management as practicable. When in a meeting, ask questions if you do not understand something. Remember that your school will have a mission and vision, and this should inform your decision-making process.
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