Corporate governance in aged care: how to evaluate board performance

Purpose of the research: Board members of an aged care organisation were concerned with establishing a process whereby the Board could gauge its own performance in relation to the governance of the organisation. The paper outlines the process adopted by the Board and provides a summary of the outcomes of the process. Methodology: Action research (first cycle) involving the development of a self administered questionnaire. Findings: While adopting sound governance principles, Boards of Management in the Aged Care sector need not converge towards or diverge from private sector corporate governance standards and can design an evaluation process that maintains their cultural identity and yet conforms to sound governance principles. Implications for theory: There remain fundamental differences between for-profit and non-profit organisations requiring them to take a stakeholder as opposed to shareholder approach to key issues of governance. Implications for practice: Not for profit Boards of Management in the Aged Care sector are able, with facilitation, to achieve continual improvement in the governance of the Board by the development of rigorous criteria established by the Board itself as to what the Board considers to constitute responsible governance. Value of the paper: The paper is of significance to academics researching corporate governance in the not for profit sector, to members of Boards of Management and to consultants that practice in the area of governance for Boards.