Introduction to governance

Governance refers to the framework of rules,relationships, systems andprocesses by which authorityis exercised and controlled inorganisations.i

In the NSW government sector, governance refersspecifically to the complex relationships betweenagencies, the Government and Parliament: whereagencies are given particular powers, functions,responsibilities and resources to act – and thoseagencies are also required to give an account toMinisters, the Government and the Parliament on howthose responsibilities and resources are used.

Governance also refers to the arrangements withinagencies: where public responsibilities and funding aredelegated from the Department Secretary or other headof an agency to other government sector employees– and those employees are also required to give anaccount to the agency head (and ultimately, to theParliament) on how they exercised those powers andused that funding.

The requirements of governance apply to every NSWgovernment sector employee: we are paid governmentmonies to deliver government services; we are seen bythe public to be representatives of the State; and ourwork may be contributing to how our agency taxes,regulates and enforces State laws over individuals,businesses and communities. As users of governmentpower and recipients of government funding, weare obliged also to be accountable, to report, explainand answer to the government (and the public, moregenerally) about how we are using government powersand finances.

The objective, values and principles of the EthicalFramework provide criteria to establish, administerand evaluate the governance systems and practicesof agencies. These criteria include: act in the publicinterest, uphold the law, communicate intentionsclearly, provide services with a focus on customer needs,provide transparency to enable public scrutiny, andfocus on efficient, effective and prudent use of resources.

i) ASX Corporate Governance Council (