Board processes

Principle 2: Board processes

Each board should agree to and document a clear set of governance policies and processes to
facilitate effective governance. These processes should reflect best practice and be subject to
regular review. An effective board meeting should have the following attributes:

• a capable chair, with meetings held regularly and attended by appropriate personnel
• board papers for every item provided in advance so directors are informed and well prepared
• clear, timely and accurate recording of decision making and communication of outcomes to stakeholders.

Principle 2.1:

That the board should document its meeting process. Normally this will include:

• legal requirements
• decision-making approach (consensus versus voting) and voting rights of attendees
• protocol/s for meeting conduct and director behaviour
• logistical details such as meeting frequency, meeting location, timing of meetings, attendees, etc.

Commentary and guidance

The legal requirements in regard to meetings incorporate such items as the official number required to make a quorum, the amount of notice required for calling a meeting and other such requirements as specified in the organisation's constitution. The frequency of meetings will depend on the size of the organisation and the internal and external circumstances, including any specific issues the organisation needs to deal with at any given time. A sporting organisation board should meet no less than six times per year and often as regularly as monthly. The schedule of dates for board and committee meetings should be agreed in advance.

Principle 2.2:

That the board should prepare an agenda for each meeting. In addition, the board should agree how the agenda will be developed and the items for regular inclusion.

Commentary and guidance

The governance policy should outline the process for establishing the agenda for each board meeting. It is essential that the board ensures meetings adhere to pre-agreed time frames and that adequate time is given to each agenda item. It is also essential that the board ensures some agenda items are linked to the strategic objectives of the organisation and that there is an alignment between the reporting from management and the key performance indicators that have been approved by the board.

Principle 2.3:

That board meetings should have appropriate documentation. This means issues submitted to the board should be in an appropriate and agreed form (a board paper) and be circulated sufficiently in advance of the meeting. The board should similarly maintain a clear record of decisions made through an appropriate and agreed minuting process.

Commentary and guidance

The governance policy should determine timing with regard to receiving board papers in advance. Minutes should be an accurate record of discussions held and should be distributed in a timely manner, usually within a week of the meeting. These should be agreed by the board and outcomes communicated to stakeholders, again in a timely manner.

Principle 2.4:

That the board should be provided with all relevant information on an issue to enable proper execution of directors' duties. The board, or any individual board member, should also have the right to request, through the chief executive officer, any additional information from management if required (see Principle 4).

Commentary and guidance

The governance policy should state the circumstance when and how board members should go about accessing external or additional information in relation to board papers. For example, a director may wish to receive additional financial reports to enable them to effectively carry out their duties.

Principle 2.5:

That the board should plan its key annual activities and develop a corresponding board calendar/work plan.

Commentary and guidance

The board calendar/workplan should include major annual activities for the board agenda, such as
budget approval, strategy review, chief executive officer evaluation and annual general meeting.

Principle 2.6:

That the board and each committee established by the board should have terms of reference or a charter. The terms of reference/charter should include, at a minimum:

• board/committee purpose
• authority delegated to the board/committee
• board/committee composition, including the appointment of a chair
• reporting requirements
• delineation of the role of the board/committee and the role of management.

Commentary and guidance

Board committees allow directors to give closer attention to important issues facing the organisation than is possible for the full board. Board committees are an effective way to distribute the work between the directors and allow more detailed consideration of specific matters. The number of board committees, size and mix, will vary from organisation to organisation depending on its size, complexity and the challenges it faces. Sporting organisations should consider the need to have board committees. Examples of board committees are audit, remuneration, selection and technical. The function and importance of the audit committee are considered later in these guidelines.