Principle 4. Be accountable
- Author: Creative Australia, Dr Judith S. MacCormick, Bruce Rolph
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What this principle involves
The board ensures the organisation meets its legal requirements. To do this, the board should:
- manage risk and compliance
- meet legislated reporting requirements.
Principle 4.1 Manage risk and compliance
The board must understand and use the organisation’s risk management framework. This ensures they make informed decisions and maintain compliance with relevant laws, regulations and policies.
How boards manage risk and compliance
- Establish, articulate, and work to an appropriate risk management framework. This includes (but not limited to) risk areas such as strategy, operational and artistic direction, funding, reputational or brand, compliance, environmental, human capital, financial reporting and sector-specific.
- Review the risk framework annually.
- Ensure all decisions and discussions consider risk appetite and risk tolerances to encourage innovation (within agreed parameters).
- Be open and compliant with all fiduciary, regulatory and legal obligations. This includes, if relevant, complying with the Australian Charities and Not-for-Profits Commission (ACNC) governance standards of a charity.
- Adopt a conflict of interest policy.
- Maintain a register of interests.
How to identify and manage risk
Learn how boards work with leaders to identify, assess and manage risk.
Principle 4.2 Meet reporting requirements
The board must meet legislated reporting requirements. This ensures it maintains compliance and transparency of the organisation’s performance.
How boards meet reporting requirements
- Ensure stakeholders are appropriately informed about the organisation and its performance.
- Adequately document governance and other policies (such as artistic policy, board member nomination, selection and appointment, communications, marketing, private sector support and fundraising, stakeholder community relationships).
- Set up a proper process for handling whistleblower complaints.
- Ensure the organisation has appropriate insurances and provides safe work spaces (for example, performance, rehearsal, studios).
- Holds itself to account for decisions and meeting reporting requirements of funding bodies, employment, and other legislated responsibilities.
- Ensure board member, Chief Executive Officer (CEO) and Artistic Director (AD) benefits, related party transactions and actual or potential conflicts of interest are identified, disclosed, and managed.
- Ensure formal and rigorous processes to independently verify the integrity of all compliance and management reporting (for example, an audit committee or identify an independent audit process).
- Expect management to demonstrate they have taken all reasonable steps to prevent discrimination, harassment, sexual harassment and bullying from occurring in their workplaces.
- Expect management to take steps to prevent unacceptable workplace behaviour from happening.
- Responded appropriately to resolve incidents of discrimination, harassment, sexual harassment, and bullying. See Creative Workplace’s resources on bullying, harassment and discrimination.
Whistleblower rights and protections
Good governance practice should foster and encourage whistleblowing behaviour and protections where misconduct or potential breaches of the law have taken place.
See the Australian Securities and Investments Commission’s whistleblower rights and protections, and the Australian Institute of Company Directors’ guidance on how a board should respond to a whistleblower concern.
Principle 5. Manage relationships
How the board helps the organisation build and maintain stakeholder relationships.
