1.3 Governance in Aboriginal and Torres Strait Islander organisations

1.3.1 What is an organisation and ‘organisational governance’?

Definition: An organisation is a group of individuals who come together to pursue agreed objectives that would otherwise be unattainable, or would only be attainable with significantly reduced efficiency and effectiveness. In order to achieve their objectives, groups take on enduring roles, functions, procedures and structures that give structure and function to organisations. Sometimes this involves becoming legally incorporated, but organisations may also be more informal.

Definition: Organisational governance is the exercise of authority, direction and control to accomplish the functions and responsibilities of an organisation, and secure its strategic objectives. The governance of an organisation rests under the direction of the group of people who are recognised and elected or selected by their nation or community as being the group of people with the right, responsibility and ability to govern on their behalf.

An Aboriginal and Torres Strait Islander organisation may be legally incorporated under Australian legislation; and many of these now operate in communities across Australia.

But importantly, an Indigenous organisation may also be a more informal group of people who unite to get specific things done together, and who deliberately choose not to go down the road of legal incorporation—such as an assembly, alliance or volunteer organisation.

Today, there are a multitude of informal governing organisations operating in every community. These include committees, working groups, reference groups, task forces and advisory groups. The great majority of these are not legally incorporated. But many community residents work, often in a voluntary governance capacity, with these informal organisations.

Some of these informal organisations have been initiated by government departments and agencies to facilitate the local delivery of their policies and programs. But Aboriginal and Torres Strait Islander people have also formed organisations—both informal and incorporated—for their own social, cultural and political purposes.

In informal organisations, people decide for themselves what kind of governing structure, positions and processes they want to have. Legal incorporation requires particular governance conditions be met.

1.3.2 Incorporated Indigenous organisations

Today, there are many Aboriginal and Torres Strait Islander organisations legally incorporated under Australian, state and territory legislation. To outsiders, these Indigenous organisations are often the most visible expression of governance in communities.

At 30 June 2011, 2286 incorporated organisations were registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act). The Office of the Registrar of Indigenous Corporations (ORIC) estimates that there are at least as many registered under other legislation.

In other words, there are about 5,000 incorporated Indigenous organisations in Australia, which roughly works out to one organisation for every 100 Aboriginal and Torres Strait Islander people. (In the 2011 census there were estimated to be about 548,370 Aboriginal and Torres Strait Islander people in Australia.)

Indigenous incorporated organisations have an average of six people on their governing boards, which means that about 30,000 Aboriginal and Torres Strait Islander people are directors or governing board members of Indigenous organisations in Australia.

Most groups incorporated under the CATSI Act are located in remote areas and are publicly funded.

Some organisations generate substantial private income through their own enterprises and resource agreements, such as those linked to mining, compensation and some linked to the arts industry. Many hold significant community assets.

1.3.3 Incorporation laws for organisations

Many government agencies and private sector companies require groups to become incorporated before they can receive money for programs, services or agreement monies.

If you are going to do this then there are different options available to you and some real governance challenges to deal with. Indigenous organisations can be incorporated under different national, state and territory legislation, each with their own legal requirements and conditions.

Nations, communities and the elected or selected members of governing boards should all understand these laws and the rules under which their organisation is incorporated. These laws limit the powers of an organisation in particular ways and require governing members to carry out specific responsibilities for which they are legally responsible.

ORIC has an electronic rule book on its website that organisations can use to help them develop rules, codes and policies that suit them culturally, but also comply with Australian incorporation laws. There are almost as many different kinds of governing arrangements in organisations as there are incorporated organisations. However, there are some fundamentals that can be seen in all.

1.3.4 Indigenous organisations often play a big role

Aboriginal and Torres Strait Islander organisations often have to perform broader community governance roles without the proper funding or staffing to do so.

Many of the constitutions of Indigenous organisations are also based upon standardised incorporation templates that are often not well suited for their particular local, social or cultural circumstances and priorities.

Cost-shifting practices by governments, combined with the history of under-developed infrastructure in communities have placed heavy workloads and increased community expectations on organisations.

Because organisations often service or represent several different ‘communities of identity’ with varying legal rights and interests, their leaders and managers are constantly trying to balance competing sets of demands, obligations and responsibilities.

It can be extremely hard for organisations to keep a focus on their core functions and to put the time and work into developing stronger governance when there are significant daily demands from their members and from governments.

Simply put, most Indigenous organisations are trying to do too much, with too little.

But importantly, those organisations that are working to improve their governance have found they have greater control over their own affairs and can plan their future better.

1.3.5 Control and ownership

“The governance structure [of Yarnteen organisation] was seen as an important strategy to achieve the long-term objectives and economic self-sufficiency of the organisation. Our number one priority was to have a governance structure that was sensitive to and compatible with the culturally diversity and interests of our community, but importantly that offered stability and contributed to good governance rather than undermining it.”

(Leah Armstrong, presentation on ‘Financial management and business systems’, Building Effective Indigenous Governance Conference, 4–7 November 2003, Jabiru)

To gain greater ownership and control over their daily work and long-term directions, many Aboriginal and Torres Strait Islander organisations are looking at what they do and how they are doing it. They are:

• reviewing their membership
• reviewing their community and stakeholder expectations
• reviewing their leadership and decision-making processes
• reviewing their governance structures, policies, rules and procedures
• developing long-term strategies and plans for rebuilding their governance.

When you redesign or rebuild your organisational governance it is important that the ideas and solutions come from the members, leaders and staff of the organisation itself.

You will find more detailed information about these issues in Topic 5.