GovInst_Schools_Governance_Toolkit_2015_FINAL

Addingvalueto
schoolgovernance
Apracticaltoolkitforanypotentialor
currentmemberofaschoolboard
August 2015

AboutGovernanceInstitute
ofAustralia
Governance Institute of Australia is the only independent professional association
with a sole focus on the practice of governance. We provide the best education and
support for practising chartered secretaries, governance advisers and risk managers
to drive responsible performance in their organisations.
Our postgraduate education in applied corporate governance and risk management
is unrivalled in its breadth and depth of coverage. It sets the standard for entry into
the profession. Postgraduate education is also the gateway to membership of the
Governance Institute of Australia and the Institute of Chartered Secretaries and
Administrators (ICSA) — leading international associations for governance practitioners.
Our Certificates in Governance Practice, Governance and Risk Management and
Governance for Not-for-Profits provide skills-based governance and risk management
training, and a qualification for a wide range of professionals responsible for corporate
accountability functions and processes within an organisation.
Our active membership base of more than 7,000 chartered secretaries, governance
advisers and risk managers ensures that the Governance Institute is at the cutting
edge of knowledge of issues and support of sound practice in the continuous
evolution of governance and risk management.
© Governance Institute of Australia 2015

Contents
Foreword 3
Introduction: what is governance? 4
Taking a position on a school board 6
The unique challenges of school governance 10
The relationship between the board and the principal 14
Managing stakeholders 19
Risk management in schools 24
2© Governance Institute of Australia 2015 Adding value to school governance | Toolkit

Foreword
Every parent is concerned with their child’s education.
Schools deliver a service to the community and increasingly
constitute a focus of expectation for families. School
governance is therefore an area which involves the
management of unique challenges and as school boards
respond to new regulatory environments and dynamic social
influences, the complex terrain has become even more
difficult to navigate. Individuals appointed to the boards and
councils of incorporated schools have exactly the same legal
duties as directors of for-profit companies. They must comply
with the appropriate legislation relevant to their jurisdiction
and may incur liability for breach of their fiduciary or legislative
obligations. Members of other school boards without the full
legal responsibilities will find the toolkit useful to assist them
in facilitating good governance.
Our aim in developing this toolkit is to utilise our members’
deep expertise in governance to provide schools with
practical and concise guidance on how to deal with these
challenging issues.
Reading this toolkit should be mandatory for all new and
existing school board members and senior executives of non-
government schools throughout Australia in order to comply
with their obligations and understand how they can best add
value to the governance of their schools.
I thank our members who have contributed to the
development of this toolkit and commend this toolkit to you.
Trisha Mok FGIA
President
Governance Institute of Australia
Towhomdoesthisguidanceapply?
This guidance has been developed primarily for use by any potential or current member of a board, council or governing
body of an independent, non-government school. It may also be useful for members of the board or council of a
government school.
The term ‘board’ is used throughout, but it refers to and encompasses the school council or governing body.
The term ‘director’ is used throughout, but it refers to and encompasses council members or governors.
The term ‘religious group’ is used throughout, but it refers to and encompasses church bodies and other responsible entities.
The Association of Heads of Independent Schools of Australia
(AHISA) is a professional association for Heads. With 420
members its primary object is to optimise the opportunity
for the education and welfare of Australia’s young people
through the maintenance of collegiality and high standards of
professional practice and conduct amongst its members.
Heads are invited to join AHISA if the model for the
governance of their school confers autonomy to the Head for
educational, operational and community leadership within the
school. In such a model, there is a clear demarcation between
the roles of the board of directors and the Head: the board
has overall responsibility for setting the policies and strategic
direction of the school, while the Head is responsible for its
day-to-day operations and is directly responsible to the board.
For the most part, this model is well understood and
serves schools well, however the potential exists for
misunderstanding by either the Head or members of the
governing board. My experience of over 21 years as a Head
and five years as a school board member has taught me that
when problems arise it is invariably as a result of either the
Head or the board not understanding that relationship. This
inevitably results in good governance breaking down.
There is no shortage of material on the topic of good
governance, however this publication by Governance Institute
entitled, Adding value to school governance. A practical toolkit
for any potential or current member of a school board, is the
best I have read. It is clear, comprehensive, and addresses
the subtleties and nuances of school governance that other
references have not managed to do.
In my view this publication is essential reading and will become a
‘go-to’ reference for every Head and every school board member.
I commend the writers for their outstanding achievement.
Geoff Ryan
Chief Executive
AHISA

Introduction:whatis
governance?
A basic definition of governance and why
it matters
Governance encompasses the system by which an
organisation is controlled and operates, and the mechanisms
by which it, and its people, are held to account. Ethics, risk
management, compliance and administration are all elements
of governance.
Governance can be argued to have five key components:
• Transparency: being clear and unambiguous about the
organisation’s structure, operations and performance, both
externally and internally, and maintaining a genuine dialogue
with, and providing insight to, legitimate stakeholders.
• Accountability: ensuring that there is clarity of decision-
making within the organisation, with processes in place to
ensure that the right people have the right authority for the
organisation to make effective and efficient decisions, with
appropriate consequences for failures to follow
those processes.
• Stewardship: developing and maintaining an enterprise-wide
recognition that the organisation is managed for the benefit
of its primary stakeholders (including owners/students/
past students and the wider community) taking reasonable
account of the interests of other legitimate stakeholders.
• Integrity: developing and maintaining a culture committed to
ethical behaviour and compliance with the law.
• Risk management: taking appropriate risks and avoiding
unnecessary risks where the benefit is insufficient.
Governance hierarchy
• Framework — understanding the components and
boundaries. For example, what is the enabling governance
legislation for an organisation? From where does it derive
its powers?
• Structure — interaction of the components and boundaries
in the organisation. All organisations need to understand
and document:
- the identities and roles of key stakeholders (for example,
board of directors, executive management, other
stakeholders)
- the powers vested in each stakeholder and the basis
on which such powers rest (for example, do the powers
arise from legislation, the constitution or other
authorising documents?)
- the reporting responsibilities of each stakeholder and
the identity of the stakeholder to whom the reporting
obligations are owed (for example, the principal reports
to the board, the board reports to funding bodies or the
owner of the school)
- the extent of board and executive management’s decision-
making powers respectively.
• Tools — required for implementation and monitoring
strategic direction, budgets, and governance and risk
management frameworks. A board (and, in particular, the
chair) can enhance its efficiency and effectiveness by
managing its business, activities and relationships in the
following key ways:
- set meeting agendas, including order of business and
agree expectations about boardroom behaviour
- clarify the benefits of standard board paper formats
- identify what the board is being asked to do/agree to
- ensure the timeliness of the distribution of board papers
- manage board meetings (and board committee meetings,
as appropriate) to allow the board sufficient time to
consider issues properly, while ensuring that the business
of the organisation is not delayed
- discuss and agree that board members are expected
to have read board papers prior to the meeting; that for
information papers, a board member will seek clarification
prior to the meeting and that there is little discussion on
such papers (unless there is a significant issue identified)
- ensure the recording of meetings (minutes) and the
timeliness of the distribution of minutes after the meeting
- agree on access to information outside of formal meetings
- agree on the level of contact with staff other than
the principal
- implement a library of board papers for directors.
Power vested in various stakeholders
To assist understanding of the respective roles, an
organisation needs to develop policies and charters that set
out the structure of authority and responsibility, and the roles
attached to those responsibilities. The roles include:
• board (including chair, independent and representative
directors)
• principal (and senior teaching staff/management)
• secretary and/or bursar or business manager.

Delegation of authority
An essential part of good governance is the distinction
between authority, which can be delegated, and responsibility,
which cannot. Directors, the principal and staff are all
accountable, but for different aspects of the school and to a
different extent in each case.
A board of directors is responsible for the governance of the
organisation: they cannot abdicate that responsibility. There
will usually be a clause in the constitution that allows the
directors broad ability to delegate their collective powers,
but not their responsibility, to others. They may delegate
that authority, for example, to the principal and senior
management team and ought to do so systematically. The
responsibility, however, remains with the board, and the
directors are accountable for any failure of the system to
operate as it should.
The role of the board
The role of the board is to provide leadership by setting the
school’s aims in light of the constitution, determine the strategic
objectives and direction of the school and ensure those goals are
implemented in a timely and accountable fashion.
Introduction:whatisgovernance?

Takingapositionon
aschoolboard
6

Takingapositionona
schoolboard
If you are invited to be on a school board, what
are the issues you should consider before
accepting?
School governance is a specialised area that has its own
challenges and interests. Regardless of whether you are
already an experienced corporate board member, a parent
or from a representative body, the issues you will need
to consider are unique to each appointment and require
consideration before you take a role as a member of the board
of a school. Undertaking due diligence will be vital to your
experience as a board member.
Shared purpose
All schools have a distinct personality and purpose which may
be enunciated in the constitution. The vision starts with the
custodians and cascades through the school to each student,
teacher and family. The owner of the school may not always
be immediately obvious, and may be a religious group, or an
incorporated body or a parent cooperative or association.
It is always essential to have a good understanding of who
the owner is, as this affects many aspects of how the board
functions, such as:
• the role of the board — is it a decision-making body or
advisory? What is its authority?
• the setting of school fees — is this done by the board, or by
the owner?
As a potential board member, a good place to start to
determine the school purpose and mission is through the
school’s prospectus (as provided to prospective parents)
and the website. These set out what the school promises to
deliver and are therefore important to review as they hold out
a certain level of expectation concerning performance and
delivery that may be relied upon by prospective parents.
Due diligence
The constitution or constituent document is the overarching
document that informs the school board as to:
• the legal structure of the school — for example, the school
could be established under an Act of parliament; or it
could be incorporated; or it could be part of a diocese or a
religious group, which is the ultimate owner, or the owners
may not be incorporated (the legal structure identifies some
of the obligations and constraints placed on the board)
• its relationship with the owner(s) — to whom is the
board accountable?
• how the owner delegates authority to the board (this
may not be in the constituent document but may be in
a separate document).
Members of a school board will need to be familiar with this
document (if the school is not incorporated, the document
could be a charter or the terms of reference).
A checklist of the documents or information you should ask to
see includes:
• the most recent audited financial statements — you need
to understand:
- the revenue, the number of students at the school as well
as the number on the waiting list and future enrolments,
which speak to expectations of future revenue, and the
debt per student
- any borrowings, for example, to construct new buildings,
but which bring with them debt that needs servicing
- the ratio of students to teachers (you may need to be
educated as to what the relationships mean educationally
as well as financially)
• the business plan for the school, with a 4–5 year financial
forecast
• any investigations or legal cases that are pending, which
represent contingent liabilities
• information about the principal and the leadership team —
are they new, or have they been in place for many years?
• the insurance environment, including whether directors’ and
officers’ insurance is in place to cover board members
• a deed of indemnity
• the biographies (in summary form) of the other directors,
so that you have an understanding of who else will be
sitting on the board with you, what skill set and experience
they bring to the role, and whether they are appointed as
representatives of particular stakeholders, for example, the
ultimate owner
• a chart setting out diagrammatically the governance
structure of the organisation — this would show the
relationships between the owner, the board, the principal
and the leadership team as well as other stakeholders
• the latest Board of Studies report on the school — this
will allow you to assess if the school is continually meeting
education accreditation requirements and maintaining
registration
• meeting dates
• any other information that can be helpful in coming to a
decision as to whether to join the board, such as whether
there are also committee meetings to attend and also
whether there are other less formal expectations, such
as attending all formal school functions. It would be wise
to ask what kind of commitment will be required in terms

of time commitment to attend board meetings and board
committee meetings, as well as time spent in preparation
for meetings. (You might also speak to past board members
to get an idea of the amount of work, the challenges the
school faces and the dynamics of the board.)
If not offered to them, a potential board candidate should ask
for these documents from the chair, but may be directed to
the bursar, or director of business or the person who is the
company secretary or acting as the equivalent of a company
secretary.
It will also be necessary to ask what kind of skill set you can
contribute to the school and in what capacity the board has
asked you to become a member. What skills is the board looking
for that it believes you bring to the role of director? How does
this complement/extend the skill set of the existing directors?
The requirements for certain board skills may be different for an
emerging non-government school in a small town from those of
a mature city school. It is important to bear in mind that school
boards should be comprised of a diversity of skills and views.
A board member must be able to comply with educational and
regulatory requirements including:
• not to be a bankrupt, and
• an ability to obtain a working with children check.
Ideally, a board member should exhibit the following
characteristics:
• a strong sense of ethics
• high levels of integrity, and confidentiality
• diligence
• commitment to the school and potential for long-term
valuable contribution to the school
• coordination with the board’s articulation of the values and
vision
• strong communication skills
• ability to establish and develop quality relationships and
relate to a wide range of people
• strong analytical and problem-solving skills
• ability to think strategically and critically
• basic financial analytical abilities
• an ability to fill an identified skills requirement on the board.
Prospective directors should understand that board
performance evaluation is good practice. The board will
evaluate itself as a whole and may evaluate individual
director performance.
The importance of leadership is paramount in every school,
which is why it is important to have some knowledge of the
chair, the principal and the leadership team in light of the
legal and societal expectations of education. Some issues to
consider are:
• the tenure and life cycle of the incumbent chair and principal
• their vision and strategy for the school
• their targeted educational outcomes, and
• whether they are meeting those outcomes.
Depending on the particular school environment, in some
cases it might be prudent to have a meeting with the principal,
facilitated by the chair, to form a clear picture of the strategy
and strengths of the principal. For example, in a small
community, a potential board member will want to know the
principal before accepting an invitation to join the board. It is
also wise to enquire with the chair whether the existing skills
and diversity on the board is compatible with your role as a
potential director.
The regulatory environment
Education may be an unfamiliar regulatory environment for
the prospective board member, but issues of regulatory
compliance and director liability must be always considered.
Questions to ask include:
• What are the statutory obligations that are placed on a
school board in the broader context of the community?
• With which legal obligations must the school comply?
Importantly, a duty of care to the students must be expressly
incorporated into the school’s governance structures and
embodied in a culture committed to ethical behaviour and
compliance with the law.
Sample checklist of information a potential
board member should receive or request
• School’s constitution (or equivalent document)
• School’s prospectus (as provided to prospective parents)
• School history publications (magazine, book etc.)
• School board of directors/governors and management
chart (including board committees)
• A graphic of the financial relationship of group entities
• Précis of each director/governor (a skills matrix)
• Directors’ and officers’ insurance information
• Board and board committee meeting dates and an
indication of time commitment
• Other key dates for directors (obligatory/expected
attendance)
• Physical site map and location of the school
• Most recent audited statutory accounts, latest
management accounts, five-year financial plan
• Most recent relevant regulator’s annual report.
Takingapositiononaschoolboard

A registered non-government school must have policies and
procedures for the proper governance of the school in place.
The registration of a school is an ongoing process which is
reliant on compliance with state regulation, which itself is
regularly updated and amended to take account of relevant
contemporary issues. Each state has its own regulations
which can be accessed on the website of the state’s
department of education.
Directors appointed to school boards of incorporated schools
have exactly the same legal duties as directors of for-profit
companies. They must comply with the Corporations Act
2001 (C’th) and can incur liability for breach of their fiduciary
or legislative obligations. Therefore, the fact that individual
board members may have personal liability is relevant to
consider when assessing the regulatory environment in
which the school operates. In schools that are not separately
incorporated, the owners may require a similar standard of
diligence and performance. Furthermore, education authorities
may require such diligence on the part of the owners.
Tip
How does a school board ensure that new members
are inducted to an appropriate understanding of
these obligations and how they impact on the board,
principal and others? Make sure an induction
program for new directors is in place.
Casestudy
A principal of a non-government school was fired after
the board of the school said it had lost confidence in the
principal. The issue in question was a pay dispute.
Hundreds of parents whose children attend the prestigious
school staged a protest against the sacking of the
school’s principal.
A major benefactor of the school launched a blistering
attack on the school’s board over its dismissal of the
principal and vowed to withhold any further donations
until the matter was resolved. The benefactor also alleged
that the board had acted without consultation with the
community and had treated the affiliated religious group
with disrespect.
The benefactor held the view that the board’s priorities
were no longer aligned with the school community and that
they themselves would not personally contemplate any
ongoing support for the school because the board had lost
sight of ‘the big picture’ by behaving in an arrogant manner.
It was suggested that the board should resign due to the
reputational damage inflicted on the school.
The message from this case study is that each and every
school board operates in a specific context. All school
boards involve collaboration with multiple stakeholders,
both internally and externally, who have strongly held
views of ownership and control. Being a prospective
board member requires an in-depth knowledge of the
circumstances that inform the peculiar characteristics of
the school and the position of the board within the school
community and beyond.
Takingapositiononaschoolboard
Sample checklist of documents at induction
• All documents sought pre-appointment, such as
working with children and bankruptcy clearance
for example
• Director expectation/engagement letter
• Minutes of three previous meetings
• Agenda for current meeting

Theuniquechallengesof
schoolgovernance
10

Theuniquechallengesof
schoolgovernance
What are the unique challenges of school
governance?
The governance of a school board raises unique challenges.
Schools predominantly operate on a not-for-profit basis
and are reliant on government funding, philanthropy and
fees. However, they may also be substantial commercial
enterprises. Schools deliver a service to the community and
as they constitute the hub of families’ hopes concerning
education outcomes, they involve long-term personal
investments in the school and they set high ideals and
expectations. There is also a myriad of ethical and structural
considerations for each board member to consider, some of
which are common to all schools and others which are unique
to the school’s culture and context.
Core values
Being on a school board is a commitment to a shared purpose
and direction. Schools are held to the highest standards in
terms of ethics, accountability and transparency and board
members should be able to withstand challenges and scrutiny.
The school strategy and mission statement should therefore
be a lived document that informs all the actions at the board
level and beyond.
Unlike corporate board membership whose directors infrequently
interact with members of the company, school board directors
should take time and care to understand the ethos of the school
by visibly engaging with the school community.
Responding to new challenges
Changing expectations of what a school education should
deliver, coupled with new challenges in the social and
economic environment, contribute to increased challenges for
school boards. The board should consider these influences
and incorporate them in their guidelines, and ensure that their
structures are flexible in order to be responsive to the dynamic
environment. Emerging issues to consider include:
• changing expectations of what a school education
encompasses
• increase in provision of extended services
• increasing technology both within and external to the
school environment
• changes to the curriculum
• social media both as a tool and a social phenomenon
• the school’s role as an agency of social change
• financial challenges, which include:
- funding uncertainties in schools that have ramifications,
particularly in the areas of investment and delivery of
infrastructure
- the limited capacity to increase fees with rising costs
• maintaining donor relationships
• knowledge sharing and collaborations
• litigation apprehension.
Legal status of schools
Most schools operate on a not-for-profit basis and are
structured as charities; however, they may be, or expect to
become, quite sizeable businesses which engage in a broad
range of commercial activities. Most schools, therefore,
structure themselves on corporate lines to ensure limited
liability, ownership of property, to be able to contract in their
own right and to facilitate operations in accordance with well-
established and understood commercial procedures. Most
schools fall into one of the following legal categories:
• company limited by guarantee
• incorporated association
• unincorporated association
• trust and/or foundation
• entity within a religious structure
• formed under an Act of Parliament.
There are various legal and legislative requirements for each
legal structure which must be adhered to in each case.
Delegation of powers
There is normally a clear delegation of powers within a non-
government school. The governance, policy-making and
strategy of the school are delegated to the school board
by the owner. The board is led by the chair and supported
by the board members as articulated in the constitution or
governing document. The board usually establishes a number
of committees to maximise its efficiency and effectiveness.
The board then delegates the management of the school to
the principal who implements the strategic objectives set by
the board.
It is essential that clear boundaries exist between the overall
governance of the school, which is the responsibility of the
board, and the day-to-day management of the school, which
is the responsibility of the principal and senior management
team. A board member is expected to have an ‘eyes-on,
hands-off’ approach.
It is paramount to the organisational success and efficiency
of the school that the board does not intrude on the duties
and authority of the principal, and that the principal does not
intrude on the duties and authority of the board, and that the
relationships that exist between the school’s key executive
and the board are transparent and robust.

The respective roles and responsibilities of the board and
management should be documented, clarifying which
matters are reserved to the board and which are delegated to
management.
A school board has a primary duty to:
• provide leadership by setting the school’s aims and
determining the strategic objectives and direction of the
school in light of the mission statement and ensuring those
goals are implemented
A school board has a general duty to:
• oversee the management implementation of strategy and
direction, looking at both the short and long term, acting for
the organisation as a whole and not for any particular group
• manage and monitor risk and compliance
• appoint the principal and some senior staff, for example, the
business manager
• approve and monitor the performance of appointments,
contracts and remuneration packages
• approve and monitor the annual capital and operating
budgets and major capital expenditures
• receive reports from the principal on school operations,
from the business manager on financial performance and
long-term financial planning, and from board committees
(risk management, finance, audit, building and grounds,
education, marketing etc) on their areas of oversight
• deal with governance breaches and complaints
• maintain a record of delegations
• meet with representatives of students, faculty, alumni,
parents and interest groups
• assess the relationships between the board and
management, community, stakeholders, regulator
and others
• monitor the effectiveness of the board’s own performance.
Expectation
The structure of the board will be dictated by the school
constitution which may impose a number of external layers
on the governance framework. The external representative
bodies which could have influence or authority over the board
may include:
• parent associations
• school alumni
• church members.
These external bodies may require additional reporting to
them. They may also have the authority to nominate board
members and require those representatives to act in their
interests. In some cases, the relevant Minister of Education
appoints board members from a database of donors.1
Some
board members also may have specific intervention powers
and exert influence in a number of areas.
It should be noted that occasionally there also may be a level
of executive influence on the board — particularly in periods
of instability. The principal and key staff may attempt to exert
influence that extends beyond the board into the school
community and beyond.
As a voluntary board member, the first question that needs
to be asked is: In whose interests are you acting? If you are
representing a particular body, for example, a religious group,
the following question is: What expectations might such
representation bring to your role and what conflicts could this
create in terms of your legal responsibilities?
You should be clear about what skills you are contributing
to the school and how those skills fit into the board skill set
matrix. Given the complexity of today’s schools, it is important
that the board is able to draw on a wide range of experiences
to understand opportunities and anticipate challenges,
therefore, while there are certain director skills that every
board member should have, a common recruiting method is
to invite experts to become involved in the school’s activities
such as sitting on a board committee as a preliminary step to
being invited to join the board. An appropriate school board
skills matrix will usually consist of professional and non-
professional skills including:
• industry and sector experience or knowledge
• subject matter expertise:
- corporate financing
- accounting
- legal
- marketing
- education
- risk management
- community relations and fundraising
- building and engineering
- business systems and commercial management
• other factors relevant to the particular school, which will
include an understanding of the mission and corporate
history of the organisation.
It is also important that any directors on the board who are
also parents of children attending the school are cognisant of
the potential for a conflict of interest and loyalty. Parents who
sit on school boards should remember that their role is to act
in the best interests of the organisation as a whole, and not in
the interests of their own children individually. Issues relating
to their children should be kept very separate from their
decision-making role in the boardroom.
1 In some cases an Act of Parliament needs to be consulted which will specify particular appointment requirements.
Theuniquechallengesofschoolgovernance

Regulatory requirements and accountabilities
There are statutory obligations which extend to all
stakeholders in a school environment. These include
mandatory reporting and working with children police checks.
It is also necessary to be aware of the particular funding
model of the school to cover the myriad of compliance
requirements related to the different types of funding, as well
as the implications for fees, compliance and accountability.
There are increasing requirements in relation to governance
for schools in Australia. For example, in NSW, requirements
were introduced by the Board of Studies in 2014 for all non-
government schools to have policies and procedures in place
in the following areas:
• conflicts of interest
• related party transactions register
• professional training of ‘responsible persons’2
• induction processes for new ‘responsible persons’
• external independent attestation audit of Annual
Financial Statement.
Casestudy
A non-government school was fined when it was found to
have breached the Privacy Act 1988 (Cth). The breach was
in relation to the inclusion of personal details of a student in
a school board information pack.
The complainant was a former student who alleged sexual
abuse by a teacher. The school board was informed of the
allegations and organised a meeting to discuss the issue.
Prior to the meeting, the board members were sent an
information pack which contained documents detailing the
complainant and their allegations.
The complainant contacted the school alleging that the
distribution of his personal information to the school
board was a breach of his privacy. The complainant was
particularly concerned that the information packs may have
been given to the children of the school board members to
deliver to their parents on the board and that his personal
information may have been revealed as a result. He was
also aware that a non-board member had received an
information pack.
Privacy laws hold school bodies accountable for how they
handle personal information collected from individuals and
in particular whether individuals are able to be reasonably
identified through the release of the information. It was
found that the board in question had not taken ‘reasonable
steps’ to ensure the security of the personal information
and was therefore in breach of the Privacy Act.
The message from this case study is that school boards
should ensure that they are familiar with their privacy law
obligations and have a robust privacy program in place.
New school board members should undertake an induction
program, noting that information packs are to be treated
with the strictest confidence and secured at all times.
2 ‘A school’s proprietor and, if the proprietor is a corporation, each director or person concerned in the management of the school, members of the school’s
governing body, the school’s principal and any other person or body exercising a function in relation to the management of the school are considered under
the Education Act to be ‘responsible persons’ for the school.’; http://rego.boardofstudies.nsw.edu.au/go/indiv/registration-requirements/management-and-
operation-of-the-school/governance/
Theuniquechallengesofschoolgovernance

Therelationshipbetween
theboardandtheprincipal
14

Therelationshipbetweenthe
boardandtheprincipal
What is the relationship between the board and
the principal?
The importance of the role of the principal of a school cannot
be underestimated. The principal is both the figurehead of the
institution, and the primary practical administrator. Unlike a
CEO in the private sector, a principal is required to meet with
stakeholders daily on a face-to-face basis. The principal is
also effectively on call continually, carrying the expectations of
every stakeholder, both inside and outside the school grounds.
The importance of this role requires careful consideration and
support from the board, which should be cognisant of the
interactive and dynamic environment in which the principal
operates.
There should be a close relationship between the principal
and the chair which is collaborative and professional, with
mutual understanding and respect to ensure the effective
functioning of the school and the ability to manage unforeseen
events. Overall, the relationship between the board and
the principal should encapsulate leadership of a shared
strategy and understanding of purpose, encompassing the
ethos of the school and business development to ensure the
maintenance of the educational service and financial health of
the organisation.
Delegations of authority
Board members need to be aware that management of
a school is delegated to the principal. This interface can
occasionally be a place of tension, and so it is vital that
the board charter identifies the boundaries on the exercise
of authority by the principal and is clear as to the limits to
control, for example, of the educational role versus the role of
running the business.
The board charter should set out a statement of matters
reserved to the board. In doing so, it will also set out the
respective roles of the board, the principal and the executive
management team, as well as the matters delegated to
the principal.
While the delegation of authority from a school board to
the principal should be enshrined in the board charter, it is
for the board to decide how it wishes to capture the detail
of delegations of authority. It may be preferable for the
delegations of authority to be captured in one document
rather than spread across a number of documents. If they
are separated, the board charter and delegation of authority
policy should be reviewed together, to ensure cohesion
and consistency.
The delegated authorities should clearly articulate who is a
decision maker and the extent of and limits to their capacity
to make decisions. It is a board responsibility to decide
how the board charter or delegation of authority policy is
documented and administered, and to ensure that it captures
accountability mechanisms for measuring performance. A
board charter should express a direct correlation between
the strategy and risk appetite of the board, to provide
for processes to be put in place on how authority can be
exercised and measured and the limits placed on it.
The matters that should be contemplated and addressed in
either the board charter or a delegation of authority policy
should include financial authority and may also include
authority to:
• hire and fire staff
• set salaries
• invest surplus funds — the board may wish to retain this
authority
• open and close bank accounts — this may be a joint
delegation and if so, there needs to be clarity as to whether
the authority is delegated directly to the principal’s direct
report or not, with a communication protocol so that the
board is informed of the activities
and may (or may not) include authority to:
• speak to the media on behalf of the school
• take legal action on behalf of the school.
The board may implement joint delegations for:
• representing the school in the media
• student expulsion
• appointment of certain positions.
The board charter or delegation of authority policy needs to
clarify whether authority can be delegated by the principal
and, if so, to what level. It should also include a protocol for
the deputy principal in relation to their authority if the principal
is on leave or ill, who they report to at such times, and the
controls that are in place. The board may decide in such
situations that certain authorities revert to it.
The board charter should also be explicit on whether
the bursar/business manager may report to the board
independently on financial matters.
Remuneration of the principal: who is responsible?
Unless an overarching body has reserved the power to
appoint/remove and remunerate the principal (for example, the
diocese of a religious group, or, in a public school, the relevant
department of education), it is likely to be the responsibility
of the board to decide the remuneration of the principal. It
is common practice for the board to delegate the decision-
making responsibility for this to a board committee. This may

be a remuneration committee or a combined remuneration/
nomination committee. The board charter or the constitution
may or may not articulate who has the authority to set the
remuneration of the principal.
While the chair of the board committee (usually either the
chair of the board or the chair of the audit committee) will
discuss the details of the remuneration review with the board,
if the remuneration committee has decision-making powers,
it will report its decision to the board for noting. If it is an
advisory committee, it will recommend a decision to the board
for decision.
It is a board member’s responsibility to be aware of the
parameters articulated in the board charter or constitution
as to how the remuneration of the principal will be dealt with.
If the remuneration committee has decision-making powers,
board members have a common law right to enquire about
the process of remuneration, but it is not expected that board
members will enquire about the quantum. This is because
remuneration is considered an inherently private matter as
articulated in the National Privacy Principles and privacy law.
The quantum of remuneration is also sensitive information
— board composition in schools will often include third-party
representatives, such as staff and parents, which highlights
the need for the privacy of the matter. It is not appropriate
that an individual staff member’s remuneration should be
widely known.
It is good practice for the chair to advise the board as to the
range of salary and the comparison with various benchmarked
schools, so that the board members can have confidence
that the salary is appropriate for the specific needs of the
school. There is a general recognition of variance and diversity
in schools, and therefore the process of determining the
principal’s remuneration should be a specific board exercise.
The process for establishing the principal’s remuneration
may include the use of external consultants and
benchmark comparisons from surveys from applicable
school associations. The use of remuneration consultants
provides independent advice and market knowledge and the
confidentiality of the report will be preserved.
Given the move to greater levels of transparency and
accountability inherent in a sound governance framework,
school boards could consider transitioning to a more open
remuneration process, while taking into account their
obligations under privacy laws.
The performance review of the principal should be undertaken
by the board committee delegated with setting the principal’s
remuneration. The board should discuss the objectives it
wishes to set for the principal against which performance
will be measured, and the board committee can report to
the board on the performance review once completed. The
principal’s remuneration should also be considered in light of
the remuneration of the entire staff cohort, which is usually
the major expense in a non-government school, and be
consistent with the overall holistic strategy of the board.
Reporting by the principal to the board
The principal should attend all board meetings. The board
should retain the right to hold in-camera sessions without the
principal present so that performance can be discussed. This
can be a standard agenda item so that it is not weighted by
negative expectation.
It is usual for the principal to report to the board on matters
including but not limited to:
• the implementation of strategic actions and any changes to
the implementation of the strategy
• developments and issues in the education sector
• student achievement and progress, including results of
external testing
• educational benchmarking
• co-curricular performance
• staff retention
• enrolment levels and the health of wait lists for future years
• fundraising
• financial performance
• operations and compliance
• student evaluations, which will inform the board as to the
culture of the student body
• pastoral care — evidence of outcomes of pastoral
care regimes
• relations with external stakeholders
• competitors
• policy review:
- the board has an oversight role in relation to the policies
guiding conduct and processes in the school. A policy
review is advised so that the board may determine for
itself which policies it wants oversight of, so that it can
decide which policies are the responsibility of the board
to review and approve and which are the responsibility
of management to develop without board approval. A
policy is a broad statement of what ‘we can do and what
we can’t do’. A procedure or process or protocol is the
more detailed statement of ‘how we do that’. A diligent
director will ask to see the policy and procedures register
and be aware of the differences between policy and
procedures. It may also be useful for board members to
attend classrooms to witness teaching, to understand
educational objectives, as this will have an impact on
policy formulation
Therelationshipbetweentheboardandtheprincipal

• any legal action initiated:
- it is the duty of the principal to report any significant
legal matter or issue that could threaten the reputation
of the school or affect it in some way, to ensure that
the board maintains oversight of the matter, and also
to seek to contain escalation and future legal costs. It
is also necessary for staff to be aware of legal reporting
requirements and have knowledge of the escalation matrix,
which will clarify which issues must be escalated to the
board and which issues must be escalated to the principal.
The escalation matrix should be tied to the delegations
of authority policy which assists in determining the levels
of risk in the organisation. It will also assist in regular
reporting to the Department of Community Services or
appropriate body.
It is important that a protocol be implemented to provide
for reporting to the board between board meetings as
appropriate, so that the board is kept apprised of any
significant risk issues.
Supporting the principal
It is usual that the elevation to principal is the first senior
management role for an individual outside of teaching or
education administration. Supporting the principal in their
business management role as well as their educational role is
therefore an imperative for the board, which has responsibility
for providing professional support and development. The
board needs to satisfy itself that the principal is part of
relevant professional networks and should consider:
• encouraging the principal to join business clubs,
professional associations and a CEO group
• engaging a mentor or coach
• ensuring that the principal is able to take significant
sabbaticals so that the individual’s wellbeing can regenerate
outside the school environment
• encouraging or requiring the principal to undertake
education in business and management practice.
It is a key role of the board to support the principal in the role
they play in the school. The wellbeing of the principal is crucial
to the wellbeing of the school, as it is a 24-hour-a-day job with
continual interaction with stakeholders. It is good practice
for the chair, or in a religious school, the chaplain, to monitor
the wellbeing of the principal, with an understanding of the
emotional demands placed upon the person in this key role.
It is important that the board members understand that, in a
religious school, while the chaplain may be an employee of
the school, he or she is a servant of God with accountability
to the overarching body that controls the school. This goes to
the larger picture of the board understanding its role in being
answerable for the religious character of the school. Some
schools may have alternative or equivalent roles that deal with
the engagement of the founding body and might adapt the
language of the above accordingly.
A key relationship is that between the chair and the principal.
The principal is in a stand-alone position, yet they will see
students and parents face-to-face every day. At times the
chair will need to protect the principal who needs to know that
they have the support of the board in difficult times. It is not
unusual for the chair and principal to hold weekly meetings, in
which the principal can provide an overview of any significant
issues which can arise quickly in a dynamic environment. The
chair can then speak to these matters at board meetings.
Succession planning
It is one of the most important functions of a school board
to manage succession planning and the appointment of the
principal and executive team.
Succession planning in a school environment is different in
many ways from a corporate environment. There is a collegiate
approach to learning and a commitment to developing
leadership skills in education for the good of the sector. It is
a principle of the education industry to facilitate the continual
development of the executive team to produce future leaders
to support the sector as a whole.
It is generally accepted that it is rare that an internal
candidate (for example the deputy principal) will replace the
principal — the position is usually sourced externally through
a recruitment process. There is an expectation that broad
experience will be gained outside of the school. Given that
developing internal candidates for future leadership positions
in other schools is central to the commitment to supporting
the education sector, it is sound practice to ensure that the
deputy principal or other individual can assume the role for the
short term should the principal become ill, unable to fulfil the
role or steps down, so there is a seamless transfer of power.
The development of quality and depth in the executive team
is a joint board and principal responsibility, which is part of
broader planning for contingency and succession planning. It
is also sound practice to:
• involve the deputy principal in the finance committee’s
deliberations, to provide them with exposure to the costs of
running a school
• have the executive team attend parts of board meetings and
strategic planning sessions to familiarise them with board
culture and the processes of reporting and presenting to
a board.
While it is important that the principal’s direct reports should
feel comfortable in approaching the board, the governance
framework needs to ensure that the delegations of authority
framework and accountability mechanisms are adhered to.
The senior executive team should not be speaking directly
with the board on an ongoing basis and requests from the
board to speak to the executive should go through the chair.

Equally important is for the board to assist the principal in
clarifying that, should parents wish to discuss a matter or
raise an issue, they should approach the teacher first and
the executive team if it is a matter that needs to be elevated
beyond the classroom, rather than the principal or any
particular board member.
The board must always consider strategy when appointing
the principal. The principal’s strengths must be aligned
with the school’s strategy and life cycle, and also the ethos
and the type of education it is committed to providing. The
board may need to consider changing the principal as the
strategy changes. Equally, the board needs to have realistic
expectations of the principal in relation to strategy and ensure
that their expectations align with the mission of the school.
The process of recruitment may take many months. It is not
good governance for the existing principal to be involved in the
appointment of the new principal.
The stability of board membership also assists the school in
taking a longer-term perspective on strategic issues. It is the
role of the board to effectively manage its own succession
planning. Special attention needs to be paid to succession
planning for key positions such as chair, deputy chair and
heads of committees.
Tip
When interviewing to appoint a principal, the board
should be wary of placing too much emphasis on the
formal interview alone. It is recommended that the chair
visit potential candidates at their current schools to
assess them in an educational environment.
Roles and responsibilities of the principal
• Management powers
• Key performance indicators
• Performance management
• Delegations of authority
• Compliance
• Authority and responsibility levels
• Dealing with social and relationship issues
Casestudy
A non-government school had in its constitution a clause
whereby the chair and vice-chair were the only parties who
had responsibility for the principal’s remuneration.
In the chair’s absence, a rift developed between the vice-
chair and the principal when investigation by the vice-chair
revealed that the salary package requested by the principal,
with figures and documentation provided by the bursar, was
not able to be substantiated and appeared to be well above
benchmarks in schools of similar size and capacity. The
vice-chair was unable to verify the selective documentation
provided as support for the salary application by the
principal and was concerned that the contract did not
specify the principal’s accountability with regards to any
performance measures. It also became evident to the
vice-chair when making enquiries that the bursar’s salary
package was tied to the principal’s salary package.
The risk of being a co-signatory to a contract that was
vastly inadequate in its explanation of quantum, rationale
and due process resulted in the vice-chair asking to have
the remuneration issue added to the school board’s agenda.
This prompted intervention by the chair, who did not
want the remuneration discussed by the board, and who
brokered a compromise with the principal.
should ensure that while the responsibility and procedure
for the remuneration of the principal should be transparent
to all parties. It is also vital to ensure that the board
constitution continues to be relevant and fit for purpose. It
is also necessary for the effective functioning of a school
that the relationship between the board and principal is
collaborative and professional with effective communication
channels in order to withstand potential conflict.

Managingstakeholders
Who are the stakeholders and how are they
managed?
The creation of a widely shared sense of community among
all of a school’s stakeholders is vital to the success of a
school. Similarly, when the school, parents and families work
together to support education, it is widely acknowledged that
the learning outcomes for the students improve. As a result,
the school environment today is a focal point in the broader
community for countless interactions between multiple
internal and external stakeholders. This in turn presents many
challenges for the governance and management of a school.
Arguably, the reputation of a school is its greatest asset;
therefore, it is necessary for the future of the school that
the board be cognisant of the importance and value of the
stakeholders, who they are and how they can be managed
— from the wider community which benefits from the school
as a business to the families who feel a sense of personal
ownership and pride. This needs to be balanced with the legal
requirement for directors to always act in the best interests of
the school as a whole and to never favour the interests of one
stakeholder above that.
Who are the stakeholders in a school?
The stakeholders in a school environment are those who have
internal and/or external interests in the welfare and success
of the school, with those interests being either commercial,
developmental, social, educational and/or accountability.
Some stakeholders may be advocates for the school and
some may be opponents. It is the responsibility of the board
to oversee the creation of a stakeholder list by identifying all
stakeholders, as well as a strategic plan for managing each
stakeholder, including proposed methods of consultation,
engagement, maintenance and evaluation. Stakeholders may
include the following:
• Students — the largest and the most important stakeholder
group in a school is the students. The duty of care owed to
the students is the paramount duty of a school and should
be enshrined in the governance and management of all
school undertakings at all levels. Students have stakeholder
engagement interests that are developmental, accountable
and commercial in areas that include education, before-
school care and after-school care, vacation care and co-
curricular activities.
• Principal — the principal is the primary single stakeholder
in a school. The importance and value that is placed on
the role requires the board and the principal to engage in
transparent and trusting dealings with each other on an
ongoing basis.
• Staff — the teachers and administration are the largest
internal stakeholder group with accountability interests
that are closely tied to the functionality of the school. The
development of staff and the interaction with the teachers’
unions are a management responsibility with the board
responsible for the oversight of both.
• Families — families are the largest external stakeholder
group which engages with a school. It is advisable to
develop a customer focus by listening to and taking account
of the views of the student body and their families through
communication which is responsive and reciprocal.
• Parent bodies (for example, Parents Friends or Citizens’
Associations) — parent bodies are a vital and influential
stakeholder group who often engage with the school across
multiple areas, including fundraising activities, canteen and
classroom assistance and at a representative level on the
board. Such groups can also have their own constitution
and can be incorporated as an employing agency.
• Governing authorities — these may include the owners
of the school, for example a religious group, but also will
include governments, which can set financial and curricular
direction, as well as regulators to whom the school has
statutory obligations in the form of compliance with
regulations and legal requirements (including mandatory
reporting obligations under legislation governing working
with children). Regulators can include not only boards of
studies or departments of education and training, but also
the Australian Charities and Not-for-profits Commission and
other federal government agencies.
• External educational facilities — which may include feeder
schools, universities, TAFEs (for example, some schools
allow their students to undertake courses at TAFE) and
other educational institutions.
• Childcare facilities — childcare may be provided before and
after school or there may be a licensed childcare facility run
by or associated with the school.
• Alumni — stakeholders who have an ongoing relationship
with the school are past students, who have certain
expectations of the school and may also engage in
expressions of loyalty and commitment through financial
support, mentoring and scholarships.
• Community members — this may include those who
are involved in the provision of scholarships or engaged
through fundraising activities and social events. Positive
engagement will require communication of the school profile
and culture through channels such as school brochures, the
website, the school uniform, mission statements, advertising
and ongoing community engagement.

• Community at large — schools affect and interact with
the wider community in some of the following areas: as
an employment source; business source; a community
hub; and conduits for the concentration of confidence
and opportunities in regional areas. Schools are also most
frequently located in suburban neighbourhoods and often on
arterial roads or close to arterial roads and neighbours are
likely to engage with the school on matters such as parking,
traffic, noise abatement issues and local council or relevant
governmental authority requirements.
• Business and industry — the school environment offers
opportunities for collaboration, commercial engagement,
financial obligations and prospective placements for students.
• Co–curricular and industry associations — each school will
have many external associations with which they interact
on a regular basis, for example Great Public Schools
Association (GPS), education associations and sporting
associations such as school athletics.
• Media — schools need to establish relationships with
the media across a variety of channels, as media
representation of the school can have significant impact
on the schools’ reputation.
Managing the stakeholders and establishing
processes for developing relationships
There is no one approach to managing the stakeholders of
a school as each school will have a distinct personality and
purpose, depending on the specific environment in which it
is placed. Accordingly, satisfying the needs of the various
stakeholders can lead to conflicts if one group’s interests
are in direct conflict with another group. Therefore, it is
good governance to develop a stakeholder management
and communication strategic plan tailored to the unique
circumstances and requirements of each school.
The strategic plan addresses stakeholder issues, determines
the desired outcomes and clarifies who is responsible for
each outcome, that is, whether the responsibility sits with
the board, the principal or another individual or group. The
tactical plan delegates authority from the board to others
and its implementation is the responsibility of the principal
and the senior team. It can be updated regularly as
circumstances require.
For example:
• in managing the relationship with the government, the
academic aspects, that is, fulfilment of the curriculum, will
be managed by the staff, while the financial aspects, that
is, fulfilment of reporting and accountability on income and
expenditure, will be managed by the administration
• the relationship with an ultimate owner, such as a religious
order, will be managed by the board and the principal, and
possibly also by the chaplain
• the relationship with parents and friends — this is likely
to be the responsibility of the board, principal and staff at
different times and in different ways.
Careful consideration needs to be given to managing
stakeholder relationships when it is clear that all parties
have a role to play. For example, in relation to managing the
relationship with parents and friends, consideration should be
given to:
• whether it is prudent for a board member to attend a
parents’ and friends’ meeting as an observer or to engage
in discussion, or whether it should only be the principal
who attends
• the implications for any policy clarifying that board
members will not attend a parents’ and friends’ meeting
when there is a representative of the parents and friends
on the board. This point highlights the unique challenges
of having a ‘representative’ on the board — as much of
the board’s agenda is not considered appropriate material
for discussion at a parents’ and friends’ meeting, it is not
appropriate for the representative to canvass opinion at the
meeting to bring that body’s opinion to the board
• whether it is prudent for a policy to clarify that parents
should not approach a board member in the first instance
should they have a concern or issue they wish to raise
in relation to their child, but should rather approach the
relevant teacher or the principal first.
Establishing processes for developing relationships might
include:
• representing the school to the external environment through
media and social tools
• community engagement strategies, such as community
collaborations
• developing outreach strategies to inform businesses about
opportunities to interact with the school and its programs
• developing family-friendly policies to encourage parent
participation
• providing better information about school events, extra-
curricular activities and educational outcomes
• using effective communication channels to ensure access
to practical information
• enabling volunteers to support the school while managing
the associated risks
• fundraising opportunities
• boarding — using boarding links to widen the stakeholder
engagement community, for example, the school will
regularly attend local shows in rural areas or hold BBQs to
meet parents of potential students
• regularly evaluating the effectiveness of programs.

Evaluating stakeholder management
External corroboration of the success or otherwise of the
strategic plan for stakeholder management can be valuable
in assisting the board with ongoing development of the plan.
Tools that might be useful include:
• annual, anonymous surveys, to gain evidence across a
range of engaged stakeholders, such as current and past
students, and current and past parents and staff, in order
to evaluate and create longitudinal data. The school might
choose not to survey the entire cohort of students each
year but to survey segments of the student population
• employee exit surveys
• professional development for teachers on family and
community engagement
• invitations to members of the board to attend a school
committee meeting.
Partnering through surveys and polls, or using external
consultants can assist. The board would delegate the
undertaking of surveys to the principal, and the principal
would report to the board on outcomes.
Board awareness: managing parent behaviour,
expectation and engagement
It is good practice for the school to provide:
• report cards to parents on how the children are performing
educationally
• meetings with teachers where parents can discuss their
child’s educational progress and any other matters relating
to the child’s welfare
• a code on attendance by children and parents at school
sporting events
• a complaints procedure.
Providing feedback as early as possible to parents is likely to
mitigate any risk of a parent not registering their child’s failure
to perform, or continuing in the belief that the child is working
hard when the teaching staff hold a different view on effort.
Managing expectations needs to encompass more than the
provision of feedback on educational performance.
A widely shared sense of the school community may be seen
as an antidote to the unstable, sometimes threatening and
often insecure world inhabited by a significant proportion
of families and children today, with schools increasingly
becoming the only significant community place where people
come together for social activities. However, this focus of the
school as a hub for meeting various social requirements may
create an ‘expectation gap’ between the role of a school as an
education provider and parental expectation that the school
is responsible for the welfare of their child at all levels. It is
therefore prudent for the board to provide guidelines on the
extent of the school’s responsibility for the welfare of children
in its care. It is advisable that the guidelines clarify that the
school will:
• educate the child, and
• care pastorally for the child
but that:
• the parent cannot abrogate parental responsibility for the
child to the school, and
• if something goes wrong in the child’s life, for example, the
onset of disease, the parents retain responsibility for the
child’s welfare but should inform the school.
The guidelines need to clarify:
• what the school will do
• what parents are expected to do and not do as part of the
school community
• the expected behaviour of the school and also of parents
and friends — this may be documented in a code of
conduct which may address:
- conduct — clarifying behaviour that is tolerable and
behaviour that is not, as well as dealing with staff, student
and parent behaviours, and
- social media platforms, such as students’ and parents’
social media interactions, cyber bullying and crisis
management.
It is good governance to incorporate these guidelines in the
prospectus or handbook provided to parents to manage
expectations from the outset, and also to clarify the code of
conduct for both the school and the community.
The school should implement a transparent complaints
procedure for parents and students and create awareness of
this procedure so that it is entrenched at every level in order
to avoid potential conflicts. It would address:
• educational issues — for example, how to deal with
complaints in relation to reports and results outcomes
• behavioural issues.
It is also good governance for the school to have a code of
conduct and complaint process for the administration of the
school. A well designed system of communication will help
alleviate potential risks to the individuals, the staff, students
and school community as a whole.
It is essential that parents have clarification as to the
enrolment processes of the school. The board should ensure
that a policy on enrolment is developed, which would address:
• waiting lists
• whether or not priority is given to the sons/daughters of
previous students
• whether or not the siblings of current students are prioritised

• how students who are unable to physically attend the
school are dealt with
• the process of enrolment — it is essential that there is
no perception that ‘favours’ may be granted and that the
documented process of enrolment is followed diligently
and scrupulously.
Communication policy
The board should ensure that a communication policy is
developed that articulates the rationale for communication by
and addresses the responsibilities of the:
• board
• principal
• parents and friends
• any body that is the owner of the school
• any party that is likely to be involved with the school.
The communication policy may include a media policy, or it
may be separate from it. It is good governance for the board
to be prepared for the school to engage with the media,
including in a crisis situation. The risk of a parent or other
party speaking ‘on behalf’ of the school arises if a policy is not
in place addressing:
• whether public relations are managed in-house or externally
• who is authorised to speak on behalf of the school
• how to manage the media in a crisis situation — this ensures
that the chair and/or principal can respond appropriately to a
particular situation as the policy will set out:
- who is responsible to prepare the media release
- who will brief the external PR consultant if one is used
- the contact person for the media
- how escalation of an issue will be managed.
Stakeholder engagement benefits for the
school include:
• increased efficiency and effectiveness of service
• improved risk management practices — allowing risks
to be identified earlier, thereby reducing future costs
• streamlined policy and program development processes
• greater engagement with stakeholder interests —
ensuring services are delivered in collaboration with
stakeholders and provide outcomes which meet
community needs
• enhanced community confidence in projects
undertaken
• enhanced capacity to innovate.
Dealing with difficult and/or hostile stakeholders
Occasionally the school is required to respond to external or
internal threats that require immediate crisis management
and therefore there is real value in establishing ongoing
relationships with the media in a non-crisis environment.
The communication policy will provide the processes and
protocols that need to be followed to deal with other difficult
or hostile stakeholders and clarify responsibilities. Such a
policy will also ensure that any response from the school is
perceived to be fair and scrupulous.
Casestudy
A parent with a complaint regarding a private school went
to the press and had their complaint publicised. The press
sought comment from the president of the parents’ and
friends’ association and the president, without having all the
facts to hand and in breach of the school’s media policy,
provided comments which were subsequently publicised.
The publicity caused embarrassment for the school and
the president of the parents’ and friends’ association, and
had to be followed up with an authorised response from
the principal.
should ensure that all board members, staff, and leaders
of groups associated with the school are familiar with the
school’s media policy and all other policies relevant to
stakeholders, and that people joining the school community
are briefed on these policies.

Riskmanagementinschools
What are the risk issues in school governance?
Risk management is an increasingly important area of which
the school board needs to be cognisant. According to ISO,
(standards relating to risk management codified by the
International Organization for Standardization) risk is the
‘effect of uncertainty on objectives’. Risks may be financial
or non-financial, a driver of strategy or embedded in the
activities and structure of the school. As all schools have their
unique culture, there are risks that will be specific to each
particular institution and those that are generic in the school
environment generally. A risk-aware culture will incorporate
these commonalities and differences and shape the risk
framework and the management of risks.
The majority of risks in a school environment are an executive
management responsibility, with those areas that are reserved
for the board being putatively strategic in their focus. The
board has, however, oversight of all issues which affect the
governing of the school and it is therefore essential that in
order for the board to have a good understanding of risk, it
must understand the school:
• as a business
• its operational activities
• the expectations of the community and stakeholders, and
• the implications of all relevant decisions.
Some of the risk issues overlap in responsibility between board
and management and the board itself needs to determine this
relationship based on the characteristics and requirements of
the particular school. There should be a risk oversight process
in place by which the board determines that the school has in
place robust procedures for identifying, prioritising, sourcing,
managing and monitoring critical risks and that processes
are improved continually as the context changes. The board
must be proactive by keeping itself informed of all risk
management policies and procedures and be comfortable that
the risk oversight and mitigation models it has put in place are
effectively managed by the executive team.
Matters reserved for the board
The key areas of risk in school governance which are the
responsibility of the board are:
• the office of the principal and the senior executive
• the school demographic, and
• the school’s reputation and culture.
Principal and executive: The principal and senior executive
team is the biggest asset in a school — it is therefore one
of the greatest risks. It is important for the board to have
a succession strategy in place, and for multiple scenario
situations to be identified, in case there is a sudden change
in leadership.
Demographics: The demographic of the school is an area
where it is imperative that the board has a deep understanding
in order to protect against future funding uncertainties
and increasing competition. The ongoing requirement for
enrolments and uncertain funding expectations are risks that
can be mitigated with market research that identifies who
potential students might be, where they might reside and how
they can be accessed.
Reputation and culture: The reputation of the school is a risk
that is affected by the management of other risk areas, such
as social media, school governance and student safety, all of
which have the potential, in the face of adverse publicity, to
negatively affect the brand, financial viability and culture of
a school. School boards need to be proactive in protecting
the reputation of the school while being responsive to and
transparent about sensitive issues.
Other areas of risk that reside within the board itself are
issues of conflicts of interests and related party transactions.
Most states require schools to have a conflicts of interests
policy and a related party transaction register. A conflicts of
interests policy might include an annual declaration of interest
to be signed by each board member, and also an agenda
item that requires the members to declare that they have no
change in interest before each board meeting. Because many
school board members serve in a voluntary capacity, there
is the potential for conflicts of interests to arise between
the members’ personal and business affairs and those of
the school. Parent directors need to remain aware of the
challenge attached to fulfilling their role as a director given
their natural loyalty to their child. It is therefore important that
all board members are aware what constitutes a conflict of
interest and a related party transaction. It is wise for all school
board members to undertake induction training and have
frequent discussions at board level so that each member is
aware of the duties and expectations involved.
It is vital for the board to ensure that an effective risk
management policy is in place. A risk management policy
essentially formalises and communicates the school’s
approach to the management of risk. At a board level, this
policy should set the risk appetite and tolerance for the
school, approve the risk management framework and monitor
its effectiveness. The board committee needs to include in
the policy:
• a process for identifying and recording risk
• a process for monitoring and reporting risk

• a process for compliance
• provision for the steps that are required to mitigate risk
• the specific roles and responsibilities of the board, board
members, the chair, the principal, senior executive and
other management staff in order to clarify and formalise
accountabilities
• specific tools including models/matrix/reports
• a business continuity plan which examines what functions
might be disrupted if a critical incident occurs – these might
include environmental impacts, accidents or cyber issues.
Critical incident management should include procedures
to address issues quickly and effectively in light of the
potential damage to reputation, financial impacts and
regulatory breaches.
In practice, risk and compliance will usually be under the
auspices of a board committee as either a stand-alone board
committee or joint board committee, such as a finance or
audit committee. The board committee is usually made
up of board members, executive (key staff members) and
occasionally experts from within the school community. It is
expected that risk updates are reported and presented to the
board once or twice a year, unless there is a critical incident
issue which requires urgent board attention. The board will
then sign off on the relevant risk policies, which vary from
school to school.
Matters reserved for management
The school board has a monitoring role in relation to operational
matters which encompass risk issues. Therefore, the board
needs to ensure that it asks the right questions of management,
including asking open-ended questions in order to be clearly
informed of all issues. The top risks for schools have not
changed over many years — they are reputation, funding and
student safety. However, it is vital for the board and executive
to remain vigilant and transparent in the monitoring of any new
or emerging risks that might affect the school. New challenges
for schools and emerging risks include:
• failure to perform and academic outcomes risk
• privacy-related risks
• the increase in the risks associated with the prevalence of
social media, and
• the overall increase in the expectations of all stakeholders
generally.
The executive team must show the board evidence of how
it is dealing with the management of risk issues, including
the provision of exception reports with integrated and
assessed updates. It is a board responsibility to ensure that
management is conversant with compliance issues and
updates the board on all existing and emerging risk areas.
The school’s staff and the ability to attract and retain good
teachers are an asset and a potential risk. It is therefore
incumbent upon a school’s board, as well as upon the
principal and senior executive team, to monitor common
measurable data with respect to staff management,
considering the information on:
• turnover and retention rates
• internal grievances
• remuneration against industry benchmarks
• training and professional development
• completion of performance appraisals
• engagement and satisfaction levels.
Similarly, the impartial handling of complaints is a key
governance matter and, if managed effectively, will highlight
key risks that are present within a school community
and enhance the decision-making capacity of the board.
A proper complaints-handling system should be able to
receive complaints from key stakeholders, including parents,
members of the wider school community and members of the
local community and contemplate escalation to the chair in
some circumstances.
The policies the board should sign off on will vary
from school to school but will usually include the
following risk management areas:
• critical incident management
• registration
• risk management
• insurance cover
• student safety and security
• workplace health and safety
• school reputation and culture

Casestudy
A highly gifted student who was about to sit the final school
examination posted a photo of a fellow female year-12
student on a shared social media website. The image had
been photoshopped by placing the girl’s head on the body
of a woman that had been posted on an adult website. The
offence was an expellable offence. The victim’s parents
were understandably upset and wanted the perpetrator
to be expelled immediately, prior to sitting the exam. The
parents of the perpetrator revealed that their son was
struggling with high expectations to obtain a mark that
would ensure a place in medicine at a top university and
that it was entirely out of character.
The school resolved the matter with the principal making
urgent enquires of surrounding schools, so that although
the student was expelled, the school prepared the
paperwork which allowed him to sit the exam at
another location.
The message from this study is that school boards should
ensure that a risk management framework is in place which
reveals potential cyber risks. The framework should also
allow for flexibility within the framework in order for the
potential to address issues in ways that protect both the
student’s and the school’s reputation.

Governance Institute provides a
number of training options for you and
your school including professional
development workshops, customised
training and short courses delivered
face-to-face and online. Our knowledge
resources provide a wealth of guidance
on how to think through and manage
particular governance issues. For further
information please contact your local
Governance Institute of Australia
state office.
New South Wales ACT
T (02) 9223 5744
F (02) 9232 7174
E nsw@governanceinstitute.com.au
Queensland
T (07) 3229 6879
F (07) 3229 8444
E qld@governanceinstitute.com.au
South Australia Northern Territory
T (08) 8132 0266
F (08) 8132 0822
E sa@governanceinstitute.com.au
Victoria Tasmania
T (03) 9620 2488
F (03) 9620 2499
E vic@governanceinstitute.com.au
Western Australia
T (08) 9321 8777
F (08) 9321 8555
E wa@governanceinstitute.com.au
governanceinstitute.com.au

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