Best practice features and practices guiding community service organisation governance

The review of the literature and the results gained from this research suggest an important link between the effectiveness of a board, including its corporate governance practices, and organisational effectiveness. This link attests to the importance of a greater focus upon the governance approach used by organisations. There is extensive literature about corporate governance in the business sector and there is emerging research into corporate governance in the Third Sector. However there is very little literature about the community service component on the Third Sector in Australia and none in relation to community service organisations that are incorporated under the Tasmanian Associations Incorporation Act 1964. This thesis aims to discover what is defined as best practice in the area of corporate governance for Tasmanian community service organisations and if selected organisations have adopted that best practice. For this purpose a research problem and three research sub-problems are identified. The research adopts a case study approach as the main research methodology using interviews, document reviews and a short self assessment questionnaire as data collection tools. The researcher approached six incorporated community service organisations funded by the Tasmanian Department of Health and Human Services and they agreed to participate in the research. Following data collection and data analysis the following major findings emerge. Firstly, that case organisations have adopted a range of governance practices. There are significant gaps in some organisations and there is room for improvement in all of the case organisations. Secondly, that some case organisation boards are approaching corporate governance by managing compliance to a minimum standard although others are offering strategic leadership with a commitment to quality and best practice. Thirdly, the research identifies a number of factors that impact upon corporate governance in case organisations. Those factors include the role of the Chief Executive Officer; the quest for competitive advantage; implementation of governance maintenance strategies and the impact of religion for religious-based organisations. Finally, the research also identifies three factors that were not determinative upon case organisations. They are the size of the organisation, the governance model being used, and the influence of the regulator (the Business Affairs Office) and the funding provider (the Department of Health and Human Services). Consequently it is concluded that the principle based approach to corporate governance can be extended to Tasmania. Furthermore the implication of this research for community sector organisations is that they need to implement governance maintenance practices including board training, board performance review and governance review. There is also a call to both the Business Affairs Office and the Department of Health and Human Services to be more proactive in requiring community service organisations to adopt additional corporate governance practices. Hence, based on the literature review and the analysis of the research data, a list of “Best practice features and practices guiding community service organisation governance” has been developed. This list can be used by organisations to provide direction for their approach to corporate governance. Finally, the conclusions provide a solid foundation for further study. This will be useful in order to obtain a broader understanding of the issues involved.