Aged care Boards need to ‘lift’ governance standards
Aged care Boards need to ‘lift’ their governance standards to be more in line with the corporate sector of listed companies.
Board members must be appointed on merit and what skills they bring to the board room says Klaus Zimmermann
The statement comes from Klaus Zimmermann, former president of Aged Care Services Australia (ACSA) president and long-time chief executive in the aged care industry.
Many aged care providers now have revenue turnovers in the many hundreds of millions of dollars and strong balance sheets to match. Others are much smaller but that only intensifies the need for best practice governance at the board room level.
While the majority of the industry has good and reasonable governance standards and meets all accreditation standards, the industry continues to see sanctions and negative press across the country on a regular basis.
Mr Zimmermann claims this can be detrimental to the wellbeing of residents and families, staff, the organisation itself and the image of the whole industry, stating that “these issues need to need owned by the board itself”.
A recent pilot program in South Australia, The Innovation Hub, has, as part of its criteria, requires a higher level of corporate governance.
“I quote from the Department of Social Services web page: “The Boards of these aged care providers have committed to high levels of consumer engagement and a better practice approach to governance,” Mr Zimmermann says.
“Clearly the federal government sees corporate governance as needing improvement in the industry,” he adds.
According to Mr Zimmermann, board members must clearly understand their roles and responsibilities and the organisation they are directors of and, indeed how the industry functions.
“What are the risks, how does the funding model work and clearly define the organisation’s strategic direction are some of the issues requiring consideration,” he says.
“A good understanding of the finances and balance sheet is required. In the faith based organisations there is often a conflict between mission and margin. Both can be achieved but not at the expense of good governance or management.”
He adds that Boards should have a clear charter about expectations, conflicts, behaviours, meeting attendance, ongoing mandatory professional development , gender mix, appointment processes, skill sets, tenure, self and peer evaluation and to deliver on the organisation’s mission through the strategic process.
“Over many years I have seen cases where board members are poorly appointed, don’t have the required skills, don’t understand the organisation and industry and how it works.
“Indeed, in some cases boards act more like a board of management than a board of directors. Board rooms are not a training ground for prospective board members.
“Board members must be appointed on merit and what skills they bring to the board room. The clients, residents, staff, industry and the taxpayer expect no less and board members must take their roles seriously as most do.”
Klaus Zimmermann has been an experienced Board director across a range of industries and associations over the past decade.
Mr Zimmermann and David Baker chief executive of leading aged care publisher, DPS Publishing, will host the Aged Care Leaders Symposium in Melbourne on 23 and 24 July 2015. Find out more information on the Aged Care Leaders Symposium.
