THRYVE National Podcast S1 Ep1

Ben Schochman from Schochman Consulting discusses the importance of governance in setting up an ACOECEC. He emphasizes that establishing a strong foundation and understanding the constitution is crucial for running the organization efficiently and effectively. The constitution outlines the purpose, governance structure, and responsibilities of the organization. Board members play a vital role in ensuring the proper functioning of the organization and meeting legal obligations. They have a duty of care to make decisions in the organization's best interest and a duty of loyalty to prioritize the organization's goals over personal interests. In addition to legal responsibilities, community-controlled organizations have an added layer of responsibilities. Hi everybody. I'm here this afternoon making our first podcast and the wonderful Ben Schochman is joining us from Schochman Consulting and we're having a yarn about all things that are legally required for governance when setting up an ACOECEC. So hi and welcome Ben. Thanks very much Jo. Very exciting to know that I'm the first person. It might not be exciting for your listeners but it's a pleasure for me to be on your first podcast. Well, you're my first and obvious choice Ben because I think in exploring what it looks like to start an ACOECEC, there are some really basic fundamentals that have to be put in place and as dry as it might sound, talking all things governance, they're really important and foundational activities that one has to get underway when establishing a business or an organisation of any kind, right? Absolutely and I think just in terms of the work that I've had the pleasure and privilege of doing over the years with Snake and more recently of course with Thrive. So many organisations on the ground doing such interesting, important, critical work for communities and it's really critical to get those basic foundations right. It's also hard sometimes as well and it can potentially be a bit boring. We're all busy doing frontline important service delivery work but I think finding the space and the time and prioritising, thinking through these important governance questions and making sure that they're right for your organisation ultimately means that you're going to be running an organisation better, you're going to be doing it more efficiently, more effectively and of course what that means is that you're then delivering the best possible services for your clients and your communities. So that's why I think governance is really critical to prioritise and make sure that everyone right through from the board, from the CEO and even just down to everyone in terms of their day-to-day roles have an understanding of what governance means within their organisation. Absolutely and of course you've already been working with us across the sector and have had a good socialisation I guess into some of those nuances that our services are experiencing through our ACFCs and our Mac services. So I'm really grateful to have you here and participating in the podcast with me today. We might get cracking on the first question Ben and I guess the obvious one for me that stands out is what is a constitution and how would an ACCO go about developing one or perhaps even reviewing their own? Yeah, great question and obviously the constitution can be generally something that people are either familiar with or sometimes not familiar with. So obviously if you're a start-up organisation, any organisation, then one of the first things, in fact the first thing that you need to do is actually develop a constitution or sometimes what's also called a rule book for other services that have already been in existence and potentially for some time. Then hopefully it will absolutely be the case that there already is a constitution or a rule book. So if you're in an organisation or you're coming into an organisation, I think the first and probably most fundamental question is to find out where is the constitution, what is it and even though they can be a bit to get your head into and around, even just to take the time to read the constitution and understand it. So fundamentally a constitution is literally the set of rules under which every organisation has to operate and whether you're an early childhood centre working in remote New South Wales or you're a company like Telstra or other huge corporations like that, there's going to be a constitution that governs the operation of every single organisation and there's I guess a couple of key aspects of every single constitution and every single rule book which exist and they actually exist under law, they're required to be contained in every single constitution and I guess at a general level, just to run through them very quickly, every rule book or constitution has to set out what the objects or the purposes of the organisation is. Obviously when it comes to early childhood education centres, that's going to be pretty clear in terms of what the objects and the purposes of the organisation are going to be. The rule book or the constitution sets out the governance structure, so it talks about who the board members are and how they're elected. It talks about the members of an organisation, so in other words, who are the individuals or sometimes the different organisations that might have different roles and responsibilities which can include to elect the board. And then beyond that really there's a range of general responsibilities that as I said apply to every single organisation or company and they're some of the things just like what the rules are for holding meetings and things like notice periods, quorums, agendas, papers, things like that and how often board meetings need to be held and then there's a range of other obligations like having to keep proper accounts, having to keep proper records of meetings and things like that. So if that's not too long or too boring, that just gives you a very quick flavour of what some of the really core aspects of the rule book are and as you can see, that's why it's really important for both board members but then for senior management, for CEOs or managers of centres that they have to have that understanding of the terms of the rule book so that they can make sure that the organisation is operating properly and by that we also mean that it's operating in accordance with what its legal obligations are. Awesome. Now that's a deadly explanation Ben. It's really about creating those I guess procedures to shaping where records are going to be kept, what sort of artefacts I guess we have to have in place to be able to meet the obligations that sit within that constitution or that rule book. That's really a really good response and I guess what we can potentially provide for our listeners is a checklist of sorts for them to be able to go through and make sure that they are putting all of those bits and pieces that you've mentioned there, the objective and purpose of the org, making sure that you've got a governance structure, who the board is, how they're elected, a checklist of sorts that they can go to and make sure that they're meeting all of those requirements set out in their rule book. Talking about members of a board and how they're elected and so on, can you tease out and explain a little bit more for me what the roles and responsibilities of board members are, particularly in the ACOE, Early Childhood Education and Care space? Yeah, happily. I mean, maybe the first comment that I'd make just when we're starting to think about boards and board members, I think in my view, it's really the most important role in any organisation and particularly in any not-for-profit organisation and especially for community-controlled organisations. So, the board really has the ultimate legal responsibility but in the community context, it also has that community and social responsibility for the proper running of the actual organisation and the service that's being provided. So, in that sense, yeah, I want to both emphasise that it's a critically important role. It's often a role that's not fully understood or appreciated but I just want to say also hats off to all of the great people out in communities who take on the responsibility of being board members. It's both a privilege but also, you know, obviously a lot of responsibility that comes with it really being the custodian of the effective operation of each organisation and those purposes and objects of what it's wanting to do for the community. I think in terms of legal responsibilities, if we want to jump into a little bit of that, it is really important to remember at the end of the day that ultimately, you know, an organisation is a legal structure and therefore, being a board member comes with those legal responsibilities. And I guess to generalise, there's two types of legal responsibilities that we talked about. One is this notion of what we call a duty of care and what we mean by that in a bit more detail really is making sure that decisions that are being made by the organisation are being made in the best interest of the organisation and to further the objects and purposes of that organisation. And I mean, you can get complicated about what it is that we mean by duty of care and all of those types of things but at the end of the day, it can be pretty straightforward. It really just means being diligent, being prepared for board meetings, being engaged, asking questions and then just making sure that you're fully informed as a board member so that when you're making decisions, you're doing so with all of the information that's meant. So that's really what we mean by that sort of duty of care, if you like. The other legal obligation broadly is this idea of a duty of loyalty. So making sure that you're faithfully putting the organisation's best interests ahead of what might be individual interests of board members. And I'm conscious, particularly in community organisations and especially in smaller communities, sometimes this can be a bit of a grey area but it's really just as a board member remembering that you need to act in accordance with what the organisation's vision and purpose and objects are and that that's what your ultimate responsibility is. It's not being there with your own personal interests. So really in terms of legal responsibilities, they're the ones that apply for any organisation. I then think particularly in a community-controlled context and especially in the early childhood and education and care context, there's another sort of layer of responsibility or obligations that exist as well. And I'm sure as you know, Joe, and a lot of your listeners, some of those relate to being a not-for-profit organisation, for example, and additional responsibilities that come with that. And then there's a range of obligations that come with being an early childhood education and care service and those relate to being an approved service provider, having to have key nominated people, responsible people, nominated supervisors. I don't know whether we wanted to go into all this detail now, but there are some excellent resources that are out there that we can point your listeners to that talk about some of those additional obligations that as a board member of an early childhood education care service provider, you need to be familiar with and understand. Awesome. Thanks, Ben. We might be able to make another podcast that's just specific to the childcare sector perhaps, on the back of that yarn. And I like your reference to being a custodian of operations. All of the things that you mentioned there really sound a lot like and aligned to Aboriginal cultural ways of knowing, doing and being, right? Those responsibilities, the social responsibilities for the broader community pieces that aren't sort of intrinsically sort of linked to one's own focus of putting their needs first. So I really like that the alignment is close to the way that we do business as black fellows for our communities. Talking about the paperwork earlier too, Ben, what sort of paperwork does an organisation require from its board members to establish? I would assume that there'd be some sort of legal requirement that they would have to provide to be able to become board members in the shape of some sort of artefacts that fit into the requirement. Can you talk a little bit to me about what they might look like? Yeah, I can happily do that. I mean, we've already talked about the constitution or the rule book. And I think when it comes to sort of legal paperwork, if you like, the rule book really is that fundamental paperwork, and a lot of the standard other kind of aspects of what you need to do as a board member and paperwork that you have to put in place are often outlined or in fact legally are required to be outlined in that constitution or rule book itself. So some of those include even just things like keeping a register of who the board members are, keeping a register of who the members themselves are. They're really important bits of paperwork. There can be then particular things that for directors and directorship that you need to have in place, things like even a director ID and other things like that, that people are going through the process of having to make sure that they have now. So there's some of those really important aspects just of the rule book and what you just need to keep as the sort of the record of who are board members, who are members. Another aspect to think about, obviously, is just when we talked about the financial reporting and accounting standards, I think it's obviously pretty common sense that for any organisation, you're going to have to have all of the accounting and financial records in place. That's another aspect of important paperwork that the board needs to be reviewing and on top of. And then I think we'll get into a conversation about things like strategic plans and other things. I think there's some things that we've got to think through the lens of being absolutely required under the rule book or constitution and under legal obligations. There's been a range of other paperwork like board papers and all sorts of things that aren't maybe the legal requirements or the nuts and bolts of what has to be done, but really go to ideas of good governance as opposed to just governance for legal obligations and happy to get into a bit more conversation about what things like board papers and strategic plans and reporting frameworks and things like look like. But hopefully, that answers some of the thoughts around paperwork and that question, Jo. Yeah, awesome. Thanks, Ben. Trying to keep in mind that we're keeping those yarns to short, sharp, succinct kind of conversations. I think that the strategic plan discussion is one that we could potentially do in another segment, I think, and backing that up with some of those reporting documents and requirements that ACOE CECs would require. And just to finish off, Ben, I think if I could just ask you how long would it take for an organization potentially that was looking at starting out as an ACOE CEC to begin that process? Is there a kind of estimated timeframe that they would be looking at from the inception or the idea to actually get itself organized and established and registered with the right authorities to be able to start the business functioning? Good question. And I think in some ways, it depends. I think if you just wanted to do a very quick, straightforward, purely compliance-driven approach, then something like a constitution, there are template constitutions that you can just download and set up and register with the different authorities. If it's not too annoying, I might answer that question by saying particularly when it comes to community-controlled organizations and for services like early childhood education and care, what's actually really critical is that in developing and thinking about an organization that you go about it in the right way and make sure that the organization is actually responsive to community priorities and aspirations. You want to make sure that your board members are members of the community and represent the community and the community's voices can actually participate and be involved in all the decisions of the organization and what that's going to look like for each different organization potentially is going to be very different. So there might be some organizations, if we take a new organization in this context where there's been discussion about establishing it for years and years and years and some of those things are already commonly understood and known. So the process for establishing might be a bit quicker in those instances because you don't have to do maybe some of the consultations or the engagements and thinking through some of the complexity that we've talked about. In other circumstances where maybe a community might be at the beginning of that journey, then I think necessarily that journey is going to take a lot longer to have all of those important conversations. So again, maybe there's that distinction between what might just be basic or pure governance and what you can do quickly and how long that takes. There's been this idea around what we might call good governance and doing things in the proper way. And I think as we would all know that if we're going to be thinking about good governance, then that's going to take a much longer period of time. And the other thing I might just talk about a little bit, Joe, if it's helpful when we start thinking, if we take the lens back to the idea of a board member, we talked earlier about what their legal responsibilities are. I think it's useful and helpful maybe to think about what the different work of the board might be and what are the key things that we really want board members to have at the front of their mind. And I think through the experience that I've had in the work that I've done, there's probably five key areas that I'd really encourage board members to be thinking about. The first one really is that idea of the board operations. We've kind of touched on this a little bit already, but that's the idea really that board members, their composition, how often they hold meetings, are they doing training for board members? Do they have the skills that they need? That's one broad area that you really need to think through. And again, to your question of how long might it take us to start up, that'll depend on how much experience or expertise board members might already have or that might need to be developed within the board. I think the second area has really the strategic vision and planning question, which happy to talk about at another time, but really doing that thinking, that planning for the future and what are the strategic vision and purposes of the organisation. I think that's a second really critical area that board members have to have at the front of mind of their responsibilities. Third area is this ongoing question for all organisations really around resourcing. So ultimately, financial responsibility sits with the board. So if we're thinking about either a new organisation or an existing organisation, there always has to be that consideration of do we have enough financial resources to deliver the services that we need to do? But also, do we have the human resources? Have we got the staff that we need? Do we have the physical assets in the buildings? So lots of thoughts about resources there. The fourth thing that I'll mention out of the five is really this strategic oversight question. So making sure from a risk perspective, from a financial oversight, from overviewing all of the programmes and services that board members have that general oversight role front of mind. And then the final comment that I might make for board members really is just thinking about almost as we use this language of custodians earlier, Joe, but this idea of almost ambassadors for the organisation that they're a board member of. So it's really critical for board members to be out advocating for the organisation in the community, making sure that everyone talks about and understands the role of the organisation, the impact that they have in meetings with different stakeholders. So that really is the fifth area that I'd be thinking about. The quick recap, if it's helpful for board members, the five areas are thinking about board operations. The second one is the strategic planning aspects. The third is resourcing for the organisation. The fourth is that oversight and governance role. And then finally, thinking about ambassadors for the organisation. So yeah, hopefully that's some useful guidance for board members to think about their work, almost what that involves on a regular basis. And I think all of those things are really key factors to think through at the beginning of an organisation when you're thinking about starting up an organisation and what that means. To be able to ultimately set up and run a really effective, deadly service that serves the community in the best way that it's intended to. Yeah, that's right Ben. Too true. Talking about those responsibilities and building the relationships, the engagement and the consultation process. And I know that a lot of our community mob, they might be yawning about starting something for a really long time. So they might already have informal governance in place so that they can start investigating those artefacts and those templates to establish their constitution and get moving. Whereas other communities might have only just spoken of the idea and so the journey's just begun and taking that time and really making sure that you've got those right stakeholders that can form part of your board. Just cognisant of time gone a little bit over here, but an absolute deadly yarn with Ben Shockman. Thanks Ben so much for your time. We might be able to make sure that we've got some of those templates and links in our Padlet, you mob. So keep an eye out for those and if you need to download them, have a look into our Padlet for any of those documents around governance support and building your business capacity. Again, thanks so much Ben and I look forward to yarns with you into the future to help our ACOECEC providers out there in their boards. Great. Thanks so much, Jo. Thrive is a snake project supporting Aboriginal and Torres Strait Islander community-controlled early years services in New South Wales, Victoria and Western Australia. We're recording today on the lands of the Dharawal people and pay our respects to elders past, present and our emerging future leaders. you you