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Owner's Expectations Manual

Annex 8: Specimen contents of board charter/code of practice

1 Role of the board

  • The key dimensions of the board's role, covering duties and responsibilities under the Companies Act, Crown company legislation and relevant Codes of Practice should be covered in this section. It would include the generic duties and responsibilities set out in Chapter 9 of the Owner's Expectations Manual, as well as particular responsibilities relating to the individual Crown company and its operating environment.
  • The role of committees and the reporting relationship between committees and the board should also be described.

2 Role of management

  • The charter should include key dimensions of the CEO's role and how these relate to those of the board, including: providing the principal link between board and company management; responsibility for annual and long-term performance of the company; responsibility for acting within authorities delegated by the board; and regular reporting of company performance and other matters of significance.
  • The charter should also include responsibilities of management generally in ensuring effective governance, including their role in agenda preparation, board papers and associated deadlines, minute taking and associated turnaround time and general support for the board.

3 Board procedures and protocols

  • An account of how the board conducts its business, including matters such as frequency of meetings, nature of agendas (eg, balance between operational and strategic matters), role of the chair and expectations of meeting conduct (including levels of participation and openness of debate) should also be included.
  • Expected standards of individual director conduct before and during meetings should also be included. This could include adequacy of preparation prior to each meeting, provision of adequate notice to the chair for any meeting absences (in part or whole), professional courtesy during meetings through uninterrupted focus on the business of that meeting (ie, not answering messages until breaks, not leaving the meeting temporarily to conduct other business etc).
  • Protocols for communication between directors and management should also be explained; for example, where individual directors wish to be briefed by management outside board meetings on an aspect of company operations, to ensure proper adherence to the appropriate division of responsibility between management and board.

4 Induction and continuing education

  • A description of the induction process and the means by which directors become, and remain, familiar with both the business of the company and the practice of governance should also be included.

5 Board evaluation

  • A description of the process by which board and director performance is measured and managed should also be included.

6 Ethical responsibilities of board, management and employees

  • This section should refer to the board's role in setting both an example and expectations of ethical behaviour for the organisation as a whole. It should either include or refer to a code of conduct/ethics that guides the behaviour of all members of the board, management and employees in the running of the business.
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