Directors and trustees are responsible for the stewardship of assets and the owners of those assets hold the board accountable.
The main elements of being accountable are:
- The annual general meeting
- The annual report
- Regular reports to funders
- Other open meetings or consultations
Board members must account to funders (whether they be shareholders, owners, or Government) that the money provided was used as agreed and that expenditure was appropriate and monitored. If companies are listed on the stock exchange, the rules and regulations for continuous disclosure of information must be followed very carefully. It is a difficult balance to provide sufficient detail to keep owners/funders informed without revealing business information to competitors or giving details on projects before all options have been considered. This requires careful judgement from directors and trustees.
All stakeholders including owners, Government regulators, iwi, your local community etc need a clear and accurate view of where your organisation is going, how it is performing and the reassurance that directors and trustees are operating in the best interest of the organisation and that they are meeting their legal and ethical obligations.
The Constitution, regulations and funding agreements may set specific requirements for directors and trustees to communicate with owners and other stakeholders. With increasing demands from owners, shareholders and strategic partners, these requirements are recognised as a minimum for communicating information to the wider stakeholder group.
Directors and trustees should make sure that owners and other stakeholders are given a good understanding of what the organisation is aiming to achieve, and its progress towards its goals. At the Annual General Meeting, as a minimum, time must be allowed to give owners and other interested parties the opportunity to ask questions. Boards might choose to develop communication plans [doc, 87kb] to ensure ongoing communication with owners, shareholders and other stakeholders.