Ten Principles that promote good

governance

Introduction
An explanation of how the Principles
and Guidance were developed, and the
purpose and applicability of the guide.
Principle 1: Roles and Responsibilities
The need for clarity.
*Awareness of responsibilities and
expectations
*Clarity concerning the role of the board
*Boards should not function like parliaments
Principle 2: Board Composition
The right group of people.
*Getting an appropriate mix of skills,
knowledge and experience.
*A skills matrix
*The size of the board
*Terms of board appointment
*Maintaining a board succession plan
*The chair and CEO
Principle 3: Purpose and Strategy
An appropriate vision, purpose and set
of strategies.
*He board plays an important role in setting
the vision, purpose and strategies of the
organisation,
helping
the
organisation
understand these and adapting the direction
or plans as appropriate.
Principle 4: Risk - Recognition and
Management
Recognition and management of
appropriate risk oversight.
*By putting in place an appropriate system of
risk oversight and internal controls, boards
can help increase the likelihood that their
organisation will deliver on its purpose.
Principle 5: Organisational Performance
A focus on effective use of resources.
-The degree to which an organisation is
delivering on its purpose can be difficult to
assess, but this can be aided by the board
determining and assessing appropriate
performance categories and indicators for
the organisation.
*Financial performance indicators
*Non-financial performance indicators
Principle 6: Board Effectiveness
Appropriate board structures
processes.

and

-A board's effectiveness may be greatly enhanced

through: careful forward planning of board-related
activities; board meetings being run in an efficient
manner;
regular
assessments
of
board
performance; having a board succession plan; and
the effective use of sub-committees, where
appropriate.
*Board structures
*Careful forward planning of board-related
activities
*Board meetings
*Assessments of board performance
*The effective use of sub-committees, where
appropriate
Principle 7: Integrity and Accountability
The right information at the right time.
-It is important that the board have in place a
system whereby: there is a flow of
information to the board that aids decisionmaking;
there
is
transparency
and
accountability to external stakeholders; and
the integrity of financial statements and
other key information is safeguarded.
*Appropriate and timely information
*Communicating
performance
against
purpose
*External financial reporting
Principle 8: Organisation Building
Build and maintain organisational
capability to deliver on purpose.
-The board has a role to play in enhancing
the capacity and capabilities of the
organisation they serve.
*CEO appointment
*Human resources policy
*Use of volunteers
Principle 9: Culture and Ethics
A healthy culture in the boardroom
and throughout the organisation.
-The board sets the tone for ethical and
responsible decision-making throughout the
organisation.
*Board culture
*Organisation-wide focus
Principle 10: Engagement
Effective stakeholder engagement.
-The board helps an organisation to engage
effectively with stakeholders.
*What is effective stakeholder engagement?
Successful stakeholder engagement requires a commitment to
engage actively with stakeholders; listen to them, talk to them

about why your organisation exists, what it does and build a

relationship with them in a mutually beneficial way.
Engagement is not an end in itself, but a means to help build
better understanding and relationships with the individuals,
groups, departments or other entities with whom the NFP
intersects.

Eight Elements of Good

Governance
Good governance has 8 major
characteristics. It is participatory, consensus
oriented, accountable, transparent,
responsive, effective and efficient, equitable
and inclusive, and follows the rule of law.
Good governance is responsive to the
present and future needs of the organization,
exercises prudence in policy-setting and
decision-making, and that the best interests
of all stakeholders are taken into account.
1. Rule of Law
Good governance requires fair legal
frameworks that are enforced by an impartial
regulatory body, for the full protection of
stakeholders.
2. Transparency
Transparency means that information should
be provided in easily understandable forms
and media; that it should be freely available
and directly accessible to those who will be
affected by governance policies and
practices, as well as the outcomes resulting
therefrom; and that any decisions taken and
their enforcement are in compliance with
established rules and regulations.
3. Responsiveness
Good governance requires that organizations
and their processes are designed to serve
the best interests of stakeholders within a
reasonable timeframe.
4. Consensus Oriented
Good governance requires consultation to
understand the different interests of
stakeholders in order to reach a broad
consensus of what is in the best interest of
the entire stakeholder group and how this

can be achieved in a sustainable and prudent

manner.
5. Equity and Inclusiveness
The organization that provides the
opportunity for its stakeholders to maintain,
enhance, or generally improve their wellbeing provides the most compelling message
regarding its reason for existence and value
to society.
6. Effectiveness and Efficiency
Good governance means that the processes
implemented by the organization to produce
favorable results meet the needs of its
stakeholders, while making the best use of
resources human, technological, financial,
natural and environmental at its disposal.
7. Accountability
Accountability is a key tenet of good
governance. Who is accountable for what
should be documented in policy statements.
In general, an organization is accountable to
those who will be affected by its decisions or
actions as well as the applicable rules of law.
8. Participation
Participation by both men and women, either
directly or through legitimate
representatives, is a key cornerstone of good
governance. Participation needs to be
informed and organized, including freedom
of expression and assiduous concern for the
best interests of the organization and society
in general.
Towards Improved Governance:
Good governance is an ideal which is difficult
to achieve in its totality. Governance typically
involves well-intentioned people who bring
their ideas, experiences, preferences and
other human strengths and shortcomings to
the policy-making table. Good governance is
achieved through an on-going discourse that
attempts to capture all of the considerations
involved in assuring that stakeholder
interests are addressed and reflected in
policy initiatives.