1/10/2024

The four pillars of effective governance

Effective governance can be summarised by four key governance practices, also known as the four pillars of effective governance:

1. Determining the business’s purpose.

An effective Board, one that truly adds value to an organisation, will lead the exploration, development and deployment of an organisation's purpose. Once set, the Board must act with the purpose in mind, utilising the purpose to set the organisation’s goals, and then devising the strategy to achieve them.  

2. Maintaining strong governance culture.

An effective Board will work well as a team by ensuring a healthy Board environment where open and non-personal debate is encouraged.  A Board should celebrate thoughtful challenge and dissent, commitment, and trust.

Holding positive Board meetings is part of ensuring all Board members adopt a learning mentality and always operate with the best interests of the organisation in mind.   It will encourage a high-performance culture, ensuring leadership deal with the right issues at the right time and in the right manner.

3. Holding management to account.

An effective Board will hold management to account through informed, astute, effective, and professional oversight.  

It does not do management's job.  Instead, it ensures the organisation's purpose and strategy are understood by management and implemented according to a clear plan with proper resource deployment, task allocation, and performance management.

4. Ensuring compliance.

This one is pretty important.  An effective Board ensures the organisation is, and remains, compliant.   It must also identify and mitigate risk within the organisation and direct management on how to proceed.

Good governance is extremely important for any business.  If neglected or poorly executed, it can impede your organisation’s growth or even render it a failure.

We can help you get it right!  Get in touch.

Tax and Trust have been our Church’s Accountants for approximately 13 years. They always do their upmost for our Church and for any help I need or questions answered. As we are a Charity they take care of all our Charity Obligations with filing to the Charities Commission and with our Auditors with their yearly audit of our Accounts. We use the XERO Accounting System and Michelle and her team always help us with any queries. The whole team at Tax & Trust have always been friendly and helpful to myself. I have no hesitation in recommending them for any Clients that are Charities or just need new Accountants that they can trust who are professional & efficient Accountants.

Janette McKay, Massey Community Church Accounts