Health and community service management and boards are busier than ever with increasing governance requirements to meet and be aware of in evolving risk and opportunity areas.
Areas that have historically been the responsibility of management are increasingly requiring board oversight to ensure the appropriate management of risk, including:
This has seen an increase in board responsibilities in addition to traditional roles around strategy setting, financial and organisational performance management and monitoring and executive performance management.
Boards are having to request assurance and information on key risk areas where organisations do not have resources or established frameworks to provide the comfort being, especially in relation to cyber security controls in light of the Optus, Medibank and Clinical Labs Australia data breaches.
As a result of the above it is becoming increasingly important for organisations and their governing bodies to have a comprehensive approach to reviewing board operations with an objective of:
The AFS Internal Audit team have been supporting clients to review their governance processes against better practice guidance, including the Australian Institute of Company Directions – Good Governance Principles and Guidance for Not-for-Profit Organisations.
The Governance Principles have been developed by the AICD as part of the AICD commitment to promote good governance in the not-for-profit (NFP) sector and provide a practical framework to help NFPs understand and achieve good governance. This tool was supplemented by health sector specific expectations and recommendations as outlined in the Department of Health and Human Services Directors Toolkit.
The following highlights some of the main benefits of conducting a governance review:
Independent internal auditors have experience with a wide variety of organisations each with different strategic intentions and complexities which builds a strong knowledge and foundation of what “good governance” looks like, and how it may differ from one organisation to another.
A new and independent set of eyes can often identify long standing processes which may be accepted as normal or acceptable for those who see it every day.
An independent third party can also provide an opportunity for stakeholders to raise concerns or areas for discussion which they may not feel comfortable raising internally, in a group or other feedback mechanisms.
Most of all, as highlighted throughout this article are the increasing pressures on the board and management to do more. This raises the importance of outsourcing tasks where possible to experienced providers to allow management to focus on the delivery of organisational strategy.