Review of the Registered Clubs Industry in NSW - Clubs NSW

9 Improving corporate governance
The following sections explain what is meant by corporate governance, outline the
existing framework for corporate governance within the registered clubs industry,
and discuss IPART’s recommendations for improving corporate governance in detail.
9.1 What is corporate governance?
In general, ‘corporate governance’ refers to the system through which an
organisation is directed and controlled. 127 It includes the mechanisms through which
the people who control the organisation are held to account 128 and encouraged to use
the organisation’s resources efficiently. 129 Corporate governance also includes the
systems in place to manage an organisation’s risk, and thus reduce the possibility of
loss (or other adverse effects) to an acceptable level. 130
It is difficult to define what constitutes ‘effective corporate governance’ in practical
terms because there is no single model that is appropriate for all organisations. 131 For
example, effective corporate governance can include an organisation:
specifying the respective roles and responsibilities of its board and management
having a board of an effective composition, size and commitment to adequately
discharge its responsibilities and duties
establishing a sound system of risk oversight and internal control. 132
127 Standards Australia, Australian Standard Good Governance Principles (AS 8000-2003), June 2003, p 8.
128 Australian Securities Exchange, Corporate Governance: Principles and Recommendations (2 nd Edition),
August 2007, p 3.
129 A Cadbury, Corporate Governance and Development, Washington: Global Corporate Governance Forum,
2004.
130 Standards Australia, Risk Management (AS/NZ 4360-2004), August 2004, p 4 and Standards Australia,
Risk Management Guideline s Companion to AS/NZ 4360-2004), December 2005, p 7.
131 Organisation for Economic Co-operation and Development, OECD Principles of Corporate Governance:
(2 nd Edition), 2004, p 13.
132 ASX, Corporate Governance: Principles and Recommendations (2 nd Edition), August 2007, pp 10-11.
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