Attachment D: Principles for governance and performance

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Clear principles are needed to guide and provide adequate assurances for those who need to sign up, or sign over, to the new entity. An assessment can then be made against designing principles for good governance and high levels of performance.

Throughout the consultations, participants were asked about relevant criteria for assessing the options. They were asked 'What are the key success criteria?' defined in terms of what they thought would work and has a high probability of success.

Constituted to represent the full spectrum of industry interests

Peak bodies should have a clear mandate, charter and constitution. Any peak body for organics must be constituted to represent the full supply chain spectrum of organic industry interests from consultants and input suppliers, growers, processors, exporters, wholesalers, retailers and certifiers.

The organic industries pose a set of challenges for constituting a peak body, in that Australia’s organic industries are diverse, spanning multiple bioregions and industry types, with many kinds of products and production systems. These span the entire length of the value chain and range through all kinds of production systems, from intensive horticulture to rangeland beef production, and from cosmetics to ciders, wines and spirits. This diversity poses several major issues, including how to organise and coordinate, and how to settle priorities and policies.

Open, transparent and democratic decision making

For a peak body to win trust and confidence, and to be trusted as representing the majority of the industry, there must be open, transparent and democratic decision‑making processes. These processes need to be fair and seen to be fair. Confidence and trust will be eroded if there is a sense that an inner group is making the important policy decision behind closed doors.

Successful organisations work out how to have sound, democratic and open processes for key policy, strategy and financial decisions while also managing delegations in respect of these functions to their professional staff, board and executive.

Capable of inclusive policy development and effective advocacy

The way in which national policy is developed and agreed should be open and subject to both scrutiny and participation by all members before being advocated openly.

Generally, peak bodies have a clear processes and protocols on who can speak on behalf of the organisations. They usually have a governing board, sometimes a wider industry council, and established policy positions and ways of reaching broad industry positions.

Through the AOIWG, the Commonwealth is explicitly seeking the development of formal channels for dialogue. Therefore, the organic industry needs an organised framework to discuss, agree and present its views to Governments.

Robust debate on policy platforms within the industry is healthy, but debate or conflicting messages outside the industry is unhealthy and potentially calamitous in respect of both the key policy issue and the industry’s credibility with external stakeholders.

There is a cacophony of voices struggling to be heard directly in the halls of power or via the media. The industry’s message must be clear and unequivocal for the industry to have any relevance in broader forums.

Designed for good governance

Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined.

Poor governance can be fatal for organisations and its leaders. Good governance matters in terms of legality, credibility, probity and respectability of an organisation’s actions. A peak body would need to be designed, from the outset, in ways which require and enable good governance.

Good governance practices are critical for resolving conflicts, mitigating risks, and acting strategically.

There are detailed and extensive guides to good governance with many accepted principles and practices—see for example:

https://www.governanceinstitute.com.au/knowledge-resources/guidance-tools/good-governance-guides/

http://www.companydirectors.com.au/director-resource-centre/corporate-governance-framework/framework

http://www.goodgovernance.org.au

Operates legally and with efficient bureaucracy

Any new body would need to meet all national and state legal requirements. Organisations must have a minimum set of bureaucratic processes in place to meet legal requirements and good corporate governance standards. But, while bureaucracy can assist an organisation avoid poor performance, too much bureaucracy can impede strong performance—there is a need to strike the right balance for any organisation’s unique operating environment.

Over time, there is a tendency for organisations to become more administratively complex or bureaucratic. Tailoring a peak body's ambitions to its financial and professional resources is important.

Generates value and is financially sustainable

A new peak body must have strong and widespread support, a compelling business case and engender confidence in its ability to generate value. Clearly articulating how the peak body will generate value to the industry, to its members, funders and supporters is critical to engendering confidence.

Throughout the consultations there was general support for the proposed functions (advocacy, policy, strategy, influence, coordination, communication), but concern that activities and priorities would need to reflect available funds.

Questions of value creation and hence sustainable funding were central to the consultations. To survive and succeed, a peak body must have in place a compelling business case that demonstrates to members and potential members that the benefits of membership clearly outweigh the membership fees.

Engenders trust and goodwill and is widely supported

A peak body must have sufficient support from its members and stakeholders. To be successful, the organisation should be able to bring protagonists together, through inclusive processes, rather than alienating key actors.

In the case of organics in Australia, consigning past differences and animosities to history will be needed. Nonetheless, if there is a surplus of unacceptable reputational baggage that is beyond repair, it could impair the prospects of new start and of forming a functioning body. Furthermore, if significant actors are alienated, they are likely to undermine success or form splinter groups. This is perhaps the criteria most requiring deft diplomacy skills, noting that it will be difficult to satisfy the starting positions of all existing industry actors.

Enables regeneration of leadership

Throughout the consultations, there was a commonly expressed refrain about the need for a new generation of industry leaders to drive the industry and its organisations into the future. It would be timely for a new or revitalised peak body to enable a new generation of industry leaders to make a fresh start. Ensuring a balanced transition from experienced hands to new one is a tactical concern of those directly involved.

Operates legally and with efficient bureaucracy

Any new body would need to meet all national and state legal requirements. Organisations must have a minimum set of bureaucratic processes in place to meet legal requirements and good corporate governance standards. But, while bureaucracy can assist an organisation avoid poor performance, too much bureaucracy can impede strong performance—there is a need to strike the right balance for any organisation’s unique operating environment.

Over time, there is a tendency for organisations to become more administratively complex or bureaucratic. Tailoring a peak body's ambitions to its financial and professional resources is important.

Generates value and is financially sustainable

A new peak body must have strong and widespread support, a compelling business case and engender confidence in its ability to generate value. Clearly articulating how the peak body will generate value to the industry, to its members, funders and supporters is critical to engendering confidence.

Throughout the consultations there was general support for the proposed functions (advocacy, policy, strategy, influence, coordination, communication), but concern that activities and priorities would need to reflect available funds.

Questions of value creation and hence sustainable funding were central to the consultations. To survive and succeed, a peak body must have in place a compelling business case that demonstrates to members and potential members that the benefits of membership clearly outweigh the membership fees.

Engenders trust and goodwill and is widely supported

A peak body must have sufficient support from its members and stakeholders. To be successful, the organisation should be able to bring protagonists together, through inclusive processes, rather than alienating key actors.

In the case of organics in Australia, consigning past differences and animosities to history will be needed. Nonetheless, if there is a surplus of unacceptable reputational baggage that is beyond repair, it could impair the prospects of new start and of forming a functioning body. Furthermore, if significant actors are alienated, they are likely to undermine success or form splinter groups. This is perhaps the criteria most requiring deft diplomacy skills, noting that it will be difficult to satisfy the starting positions of all existing industry actors.

Enables regeneration of leadership

Throughout the consultations, there was a commonly expressed refrain about the need for a new generation of industry leaders to drive the industry and its organisations into the future. It would be timely for a new or revitalised peak body to enable a new generation of industry leaders to make a fresh start. Ensuring a balanced transition from experienced hands to new one is a tactical concern of those directly involved.

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