WA's Speaker of the House is from Albany so...

So, what does it mean? Quite a bit and not a lot.

Peter Watson MLA is the (Labor) Member for Albany and was first elected to the WA Parliament in 2001. He's had a good run, is well regarded as a representative and a couple of times defeated some real quality opponents in recent state elections.

Its not anti age sentiment that causes me to say this, its just facts. Peter has been in Parliament 16 years & this year he turns 70. It is plain and fair to say, the majority of his political career has passed and it's likely this will be his last term in office.

Labor was swept to power in the big red tsunami and Peter found himself a member of parliament and a member of the government. He was also elected as Speaker of the House.

This saw him, in a jovial way, man handled to the Speaker's chair at the opening of parliament. Its a very old tradition that comes from the House of Commons in the UK. The Speaker of the House was the person who relayed the opinions and views of the House of Commons to the King. There were occasions were the King took exception to the House's views and the Speaker was executed. So the man handling to the seat is a tradition that's continued to this day.

So what does it mean for Albany's residents? Not much in one respect, if you're having trouble with whatever issue that requires you to contact the local MP, that goes on as before. The MP can still going into bat for you on matters as per before. He still represents the electorate.

However there's a list of things the Speaker can & cannot do unlike a normal MP.

1. The Speaker does not have any formal role in the formation of government business. He or she may claim they'll still "stand up and fight for..." their electorate, that the government MPs know they'll be pushing for their electorate long & hard, but they're outside the process. They're not in cabinet, they have no pull and basically have as a member of government as much clout as a brand new back bencher.
2. The Speaker cannot speak for or against any bill in parliament. In fact they're not allowed to speak out publicly on government business, they're an umpire. So they're constrained only to speaking in private to government members.
3. The Speaker cannot put a bill forward in Parliament nor be a part of formulating a bill.
4. The Speaker cannot vote for or against a bill, in fact the only time & place they can vote is if there's a tie. This is unlikely to happen during this next term of Parliament as Labor has such a great majority.
5. The Speaker can't vote therefore cannot cross the floor. In Labor's case they can't cross the floor unless they're granted permission to do so, called a conscience vote. Seems to suggest the rest of the time, a Labor MP cannot follow their conscience, they do as the party instructs them. If the cross the floor against party wishes they will be expelled from the party. How's that representing the electorate first going for you?
6. The Speaker can only speak on matters of compliance & behaviour in Parliament. They're the impartial umpire. It is a position of some prestige, but you are relieved of a great deal of Parliamentary responsibility when you become the umpire.

And that leads us to today's dilemma. We now have a legislative representative for Albany who can't form legislation, can't vote for it, can't vote against it, can't cross the floor in the best interests of the electorate, has no say on the electorate's behalf on the floor of parliament, cannot ask questions, cannot call anyone to account...all they can do is administer a supposedly impartial umpiring set of decisions on the MPs who can be a part of the system.

You phone or power gets cut off accidently and getting it resolved is not gong smoothly, yes your local member may be able to help. But if a raft of legislation needs support or opposition...he is not your man. It is very easy to say "The government is very aware that as a MP & Speaker I'll still talk to and fight hard for my electorate"

It's as common as someone retiring for any reason at all saying "Stepping down to spend more time with the family".

Classic hollowism that can not be adequately verified nor disproved, good go-to-tactical-replies, straight our of Sir Humphrey Applebee's handbook.

Wash up - Albany has a representative, possibly in his last term of office who is speaker of the house with no legislative vote, no legislative voice, no formal place in the formation of government business and cannot publicly speak on matters of government business.

He's an umpire. Will he be good for Albany?
Possibly as good as he's ever been as he isn't burdened with government business, nor a cabinet seat...where he would have been able to be more closely involved with government decision making.

He may or may not fight for Albany with his government colleagues...there is absolutely no way of knowing at all. If he thinks we should believe that he can influence cabinet to make decisions in the best interests of the State AND Albany whilst he's the lower house umpire...well I should offer to sell him a bridge.

This is the game, he is an umpire which puts him well outside forming, supporting, opposing or amending legislation.

Bit like putting your money into footy tipping at work but you can't actually pick any teams.

The Simplified Version of Corporate Governance

Its actually not that difficult in theory when its distilled down, but in practice you may find the difficult part is getting everyone in your organisation, club, NFP or company to realise how basic the fundamentals are and the advantages of sticking to the rules.

 

Good Corporate Governance is... The systems & process you have in place to ensure what's supposed to get done, does get done...by the right people at the right time, in a timely manner.

THAT'S IT - In basic overview, in general terms...that's as difficult as it gets and it equally applies to Wesfarmers board meetings as it does to Borden & Districts Knitting Club (Inc.).

And across the whole gamete of organisations, size & type, these things apply universally. Director's rights, roles & responsibilities. Whether its a lowly 8 member incorporated entity or the #1 listed company on the ASX...the directors have the same deal to keep.

 

As a director you are responsible for the Corporate Governance, the financial compliance, the legal compliance, the risk, the audit...all simply well known stuff. You can of course elect sub committees if your constitution allows to more closely manage items or issues but you cannot vote or delegate away legal liability. Added to that, be aware other non board members can be declared "de facto directors" if their involvement in the decision making processes of the board is of such a level that it ticks those boxes.

 

So who does it all apply to? Well legal entities of a type.
There are only two broad types of legal entities in Australia. An individual person or a company.
That's it, but fleshing it out there's a little more to it.

If you own something in the company of others, its technically a "company". A publicly listed company, a club, a not for profit, a political party, a partnership...they're all companies. As a legal entity, you have rights & responsibilities. As a director or a person in the governing layer of an entity you have the right to be heard, the right to ask questions and the right to access relevant information.

FAILING TO EXERCISE YOUR RIGHTS IS A FAILING TO FULFIL YOUR RESPONSIBILITES.

Yes, rights & responsibilities cannot be separated and its a concept that used to be present in every layer of society but nowadays some only want the rights. (Another whinge for another day)

Thing is its very common for organisations & groups to drift away from their constitution in an effort to be quicker or more efficient. In short...don't. If the process is not working or beginning to fail, change the process and the constitution, don't breach it.

Know your job & stick to it. Are you a director or management? Know the difference and keep them separate. The governance line between the two can vary between different companies, no one size fits all, but set the parameters and do not breach them.

Also remember, if management is not appearing to provide the information you need, there's a breach. If you're a director, you have to instruct management on the information you need otherwise you're both in breach.

Not-For-Profit organisations and clubs are regulated by the legislation (state legislation) of the state its registered in. Its the Incorporation Act. If a NFP operates in several states its generally required to apply to ASIC for registration as a recognised entity and then has to comply with the federal Corporations Act. As directors of any entity, you should comply with the rules of the Corporations Act. Do not dismiss the federal Corporations Act because your entity is a state based NFP. The principle's that it applies under director's rights & responsibilities aren't extinguished because the company is incorporated.

In either case, management do what management does and the governing body or layer (directors/board) has the helicopter view governing, watching compliance and directing strategy.

Boards cover Strategic Thinking
Management takes care of Strategic Planning.

Boards set the direction & management creates the planning to get the organisation there. They report progress to the board who's monitoring then forms the foundation of compliance.

Boards can usually create sub-committees to work out of session and quite often they're not limited to the board's directors. Often they can include people of expertise from outside the board or the company. In these cases, they're advisory type boards who'll compile a list of recommendations and their reasoning to the board for the board to make decisions. If the sub committee tries to influence the board's final choices, or tries to step around the board they can be deemed to be in breach of their governance or to be de facto directors.

 

If sub committees are authorised to make decisions or initiate actions on the board's behalf, the sub committee should be very keen to get exacting instructions from the board to prevent over stepping their boundaries. In all cases, a Sub Committee would be very wise to exercise due diligence at all times. If they commit a course of action on the board's behalf they will require the board's ratification otherwise they will have been deemed to have over stepped the governance line and be 100% liable for their decision. The board ratifying their decision releases a good part of their legal liability by showing they acted in good faith...as a "reasonable person" would.

This reasonable person test is at the core of any management or directors sense of governance.
If you look at your diary & the company's minutes as being the "letters to a judge you haven't met yet" then you'll be keen to keep good governance.

Remember, what ever your entity's structure is under its constitution, know who the board of directors are especially if that term is not used. A management committee might be the directors, in some groups its the office bearers.

All however have to act in the best interests of the organisation and it's "owners/members" and all have to commit to their governance restrictions to prevent over reach.

 

An organisation that has tight fitting rules, that are universally & properly understood isn't restricted, its properly protected. Therein is a layer of protection for all officers & directors as well as all members. Cutting corners in the interests of expediency is a recipe for disaster. Again keep the rules or if they're not working, change them properly in accordance with set procedure.

 

These are broad concepts and governances lines can vary from entity to entity depending on the size of management but in short...know your limits, stick to them and whilst its advisable to help those that need help, remember not to micro-manage an area that's not your domain.

If in doubt, or you're new to whatever role you've just taken on, ask about the Governance Audit your entity should have annually. It keeps everyone on track and compliant. Refer also to whatever training regime the entity should have for new directors, office bearers or management. Thrown into a deep end with no proper training means you could inherit bad governance habits and might contribute to them evolving into something even worse with time.

Remember you as a director have the right to ask questions, the right to be heard and the right to request information. Failing to exercise those rights is a failure in your responsibilities and anyone preventing you from exercising them is breaking the law.

The annual Governance Audit is your friend and protector. It keeps all in check, all involved doing their job properly and protects everyone...every stakeholder & the organisation. If you're unsure, ask. If everyone else is unsure ask for everyone to get independent training & get back on track.

Other smart things to remember.

1. Not making a decision, IS A DECISION, and you are liable for EVERY decision.
2. There's a few safe harbours for directors, but only if there's full governance compliance and they've done enough to satisfy their fiduciary duties and the reasonable person test first.
3. DO NOT leave any area, be it finances or governance up to your reliable go-to-guy or girl. All must understand to be compliant, because all on the board/committee are liable.
4. If you don't understand, seek information because saying you didn't understand it is not a legal defence.
5. If you're a director you're required to test things. Do not blindly accept things from management, the chair or anyone else.
6. Ensure your constitution is valid and relevant to your organisation. They're a living document but they will require a review from time to time, even if nothing changes. All constitutions should have written on them the last review date and the next.
7. Ask for training, expect and welcome assessments because these can show where specific training is needed to turn you into an even better chair, director or member of management. Its natural that people see these as threats but its not accurate. They're the opportunity to improve, grab the opportunity.
8. The most important working relationship for a board is that of the Chair and the CEO. They're the meeting point that allows constant contact between both sides of the governance line. If they work really well together and they understand their rights, roles & responsibilities the board, the management and the entity will have a increased chance of excelling expectations and meeting full compliance.
9. Board assessments are vital, so too assessing the chair's performance, so too assessing meeting procedure and performance as well as the CEO.

These are just some of the things that spill out of the basic fundamentals of good corporate governance. Its important & its required by law.