Principle 7: The board operates effectively

The board ensures that it manages its business efficiently and effectively, within the limits of the statutory functions and powers of the public sector body, to enable it to fulfil its role. The board unde​​rtakes both informal and formal reviews of performance on a regular basis and has appropriate board succession planning in place.

The board dyna​mic

Relationships within the board should be characterised by a healthy level of trust, respect, goodwill, energy and openness to debate and an appropriate distribution of power. These characteristics collectively represent the dynamic of the board. The board dynamic should be considered in conjunction with the relationships between board and the minister, the public sector body and external stakeholders.

Multiple groups and individuals contribute to the board dynamic, including the minister, individual board members, the chairperson, the CEO and support staff of the public sector body. Each needs to ensure they contribute to an effective dynamic within the boardroom.

The board chair plays a crucial role in seeking board members’ views and giving ample opportunity for these views to be discussed and fully considered. If required, further information may need to be sought and a decision on a matter deferred until this information is made available. Once a matter has been properly considered, the board chair should aim to bring the matter to a consensus decision in the best interests of the public sector body.

Healthy debate requires an environment that allows diverse perspectives and encourages constructive enquiry. Robust debate is more likely to be achieved if board communication is underpinned by a spirit of trust and professional respect. However, using consensus to avoid conflict or encourage group thinking (i.e. where all members consistently express similar views or consider few alternative views) does not encourage healthy debate and should not be interpreted as an effective board dynamic.

Regardless of the nature of board debate, the board should retain a single unified voice in any internal or external communications following deliberation. This ability to remain publicly unified is enabled by board members feeling confident in the decision making process and satisfied their views have been considered.

Effective mee​tings

Boards should meet with sufficient frequency to effectively discharge their responsibilities. Meeting effectiveness can be assisted by: 

  • developing an annual calendar of governance tasks
  • preparing agendas
  • providing board members with advance notice of board meetings
  • circulating papers in advance of the meeting
  • identifying the nature of board papers and decisions required
  • conducting meetings in a manner that permits frank and open discussion
  • taking accurate and appropriate minutes that record a sufficient level of detail
  • maintaining a list of decisions, a record of the actions and progress against them.

The board a​nd CEO relationship

Cultivation of an effective working relationship between the board and CEO is critical. This relationship should be founded on clearly defined roles and effort by both parties, with the roles and responsibilities outlined in a jointly developed charter.

A dialogue of open communication should be encouraged between the board and CEO. As the board's representative, the chairperson and the CEO should meet frequently to develop the board agenda and ensure board expectations are clear and being met.

The Public Sector Commissioner is the employing authority of all department and Senior Executive Service (SES) organisation CEOs who are appointed under section 45 of the PSM Act. Although the role of the board may be limited, most boards retain some responsibilities in the appointment process and the board should maintain an effective relationship with the responsible minister to facilitate opportunities to provide input into the selection process. In cases where the board appoints the CEO, the board should ensure the requirements of the position are considered, an appropriate selection process is undertaken, and the responsible minister is consulted, where appropriate.

The role and responsibilities of the CEO should be defined, including specific objectives and performance indicators. The expectations of the CEO should be clearly articulated, including the desired behaviours and relevant limitations of authority.

CEOs of public sector bodies are formally held accountable for the public sector body’s performance in accordance with agreed outcomes through the CEO Performance Agreement and Assessment System, administered by the Public Sector Commission under the Public Sector Management Act 1994.

CEO appointments, performance evaluation, identification of professional development requirements and appropriate succession planning all require an understanding and consideration of the:

  • current and future needs of the public sector body
  • current competencies of the CEO
  • values and desired culture of the public sector body
  • working style of the board
  • relationship between the board and CEO
  • relationship between the chairperson and CEO.

Board ev​aluation

Regular evaluation of a board’s performance is considered an integral part of effective corporate governance in order to ensure it has the necessary skills, experience and abilities to fulfil its responsibilities and determine the extent to which it is delivering on its purpose, as well as the minister’s ‘statement of expectation’. This includes the: 

  • performance of the board and established board committees 
  • workload of the board and required positions 
  • contribution of individual members against predetermined criteria. 

Although boards may differ in relation to their governance regime and the range of issues they face, there are still a number of key decisions that are relevant to all boards implementing an evaluation process. A board evaluation process should include all aspects of governance and be designed to: 

  • solicit honest, genuine and constructive feedback 
  • identify and address opportunities for improving the performance of the board 
  • prepare manageable recommendations with a clear process for implementation 
  • enhance the performance of the board. 

The board chair has a key role in helping to ensure the evaluation process is ‘fit for purpose’, as well as dealing with matters raised during the process. 

One of the most important and valuable stages of an evaluation, no matter which method is used, is the presentation of results to the board, followed by an open and frank discussion about the results and determination of areas on which the board should focus to help strengthen its effectiveness. 

Any board evaluation should be focused on the improvement of board performance, through the development and implementation of an action plan.

The chairperson has a vital role in informally managing the performance of individual board members. Similar to whole of board evaluation processes, the frequency, scope and mechanisms for formal individual board member evaluation should be carefully considered. 

Further information on board evaluation can be found in the resources section.

C​ontinual development

The board should consider the development requirements of the board as an entity and board members as individuals. The board and board members should undertake an appropriate level and type of development activities in light of these requirements and allocate resources accordingly. 

Quick review– Board effectiveness

  • Are meeting agendas sufficiently focused?
  • Does the board have an annual planning calendar to enable it to structure the meeting agendas over the course of the year to ensure all necessary corporate governance activities are completed?
  • Do board meetings involve a frank and open discussion, advanced circulation of board meeting agendas and papers, a record of decisions made and a record of the actions or progress against those reported to the board?
  • Is a summary of declared conflicts of interest included in the board minutes and in a central register?
  • Is respect, collegiality and confidentiality maintained throughout and between all board meetings?
  • Does the board evaluate and review the performance of its board members and the board itself at least annually?


Further information is available under good governance guides.

Page last updated 23 May 2017