Understanding Business Unit Leadership

Governance and Risk

Management: what does it mean for a business unit manager?

Bronwyn Simondson

23 June 2011

Overview

• Leading and managing in the University: some initial observations

• What is governance• What is risk management• Understanding the University• What does all this mean for you

Leading and managing in the University: some initial

observations• Agency: for whom?• Accountability and responsibility:

problem-solving• The art of decision-making• Mindfulness• Willingness to take advice• Willingness to exercise judgement

What is governance?

• A definition (Auditor-General of Australia, 2001)– Corporate governance boils down to how an organisation is

managed, its corporate and other structures, its culture, its policies and strategies, and the ways in which it deals with its various stakeholders. Or put simply, it is the system by which companies are directed and controlled. The governance framework is concerned with structures and processes for decision-making and with the controls and behaviours that support effective accountability for performance outcomes and results

Governance contd

• Universities Australia: Voluntary Code for University Governance– focus on fiduciary responsibility of directors

and officers: duty of loyalty and duty of care (these have a statutory basis in the University Act)

– focus on managing legal, commercial and financial risk

– composition of University Councils– Reporting on statutory obligations (eg

OH&S)

What is risk management

• In sum, about ensuring the sustainability of an organisation via:– management of reputation (compliance)– calculated strategic risk-taking to ensure

organisational sustainability• It is about taking care: for the

organisation’s reputation and competitive future; and for staff and students

Understanding the University

• Established as a body corporate by the Flinders University of South Australia Act 1966

• Can sue and be sued• A large employer subject to numerous

legal and social obligations• Ultimate authority vested in the

University Council

Understanding the University contd

• University Council responsible for:– Appointing the Vice-Chancellor, oversight

of management performance– Strategic direction and annual budget– Approving and monitoring systems of

control and accountability (decision-making structures, policy, risk management profile)

– Approval of commercial operations– Overseeing and monitoring academic

activities

Understanding the University contd

• Council approves – Policy: sets standards and expectations,

mandates behaviour, ensures compliance with statutory and other obligations

– Formal decision-making structures– Academic organisational structure– Line management structures

Understanding the Universitycontd

• Council has power of delegation– Policy on Delegations of Authority to Enter

into Contracts (and schedule)– Policy on Authorisation of University

Expenditure (and schedule)

Governance and risk management and you

• You are:– an agent of the University– responsible for business outcomes

• You will need to–make decisions,–be transparent (accountability)– take care, exercise diligence, be

mindful (risk management)–stick to the rules

Governance and risk management and you

• You need to know– the University’s strategic direction

and priorities and where your School fits

–The lines of management authority and where you fit

–What you are authorised to do (policy, delegations)

–Where to go for advice

A final word

• Build relationships• Take responsibility• Be philosophical: it is a rich tapestry