A Guide To Governing In The Water Sector - GOVERNANCE GUIDANCE FOR DIRECTORS AND THE EXECUTIVES REPORTING TO THEM - DELWP
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A Guide To Governing In The Water Sector GOVERNANCE GUIDANCE FOR DIRECTORS AND THE EXECUTIVES REPORTING TO THEM
A Guide To Governing
Aboriginal acknowledgement In The Water Sector
We acknowledge and respect Victorian Traditional
Contents
Owners as the original custodians of Victoria’s land
and waters, their unique ability to care for Country Abbreviations
and deep spiritual connection to it. We honour Purpose
Elders past and present whose knowledge and
Part 1 7
wisdom has ensured the continuation of culture
Where director’s standards
and traditional practices. of behaviour and conduct are set
We are committed to genuinely partner, and
Part 2 18
meaningfully engage, with Victoria’s Traditional
Director’s responsibilities
Owners and Aboriginal communities to support the as a member of the board
protection of Country, the maintenance of spiritual
and cultural practices and their broader aspirations Part 3 28
Understanding the roles
in the 21st century and beyond.
and responsibilities of the
entities you are directing
© The State of Victoria Department of Environment, Disclaimer Part 4 64
Land, Water and Planning 2020 Understanding the role of
This publication may be of assistance to you but the the board and the role of
Published February 2020 State of Victoria and its employees do not guarantee ministers and government
that the publication is without flaw of any kind or is
wholly appropriate for your particular purposes and Part 5 67
therefore disclaims all liability for any error, loss or other Useful context of the legal
This work is licensed under a Creative Commons and policy framework in which
consequence which may arise from you relying on any
Attribution 4.0 International licence. You are free water entities operate
information in this publication.
to re‑use the work under that licence, on the
condition that you credit the State of Victoria as
author. The licence does not apply to any images, Accessibility
photographs or branding, including the Victorian
If you would like to receive this publication in
Coat of Arms, the Victorian Government logo and
the Department of Environment, Land, Water and an alternative format, please telephone the
Planning (DELWP) logo. To view a copy of this licence, DELWP Customer Service Centre on 136 186,
visit creativecommons.org/licenses/by/4.0/
or email customer.service@delwp.vic.gov.au,
ISBN 978-1-76077-934-4 or via the National Relay Service on 133 677,
www.relayservice.gov.au. This document
is also available on the internet at
www.delwp.vic.gov.au.
2
Secretary’s foreword
Victoria’s 19 water corporations, 10 catchment change, population growth and in the
management authorities (CMAs), the Victorian case of water corporations, demand
Environmental Water Holder (VEWH) and the management and affordability.
Victorian Catchment Management Council In addition, Water for Victoria, the Victorian
John Bradley
(VCMC) (i.e. Victoria’s “water entities”) support Secretary,
Government’s plan for managing Victoria’s Department of Environment,
a strong economy, sustainable agricultural water resources and catchments, gives Land, Water and Planning
sector and a healthy environment. priority to gender equity in the water sector,
As a water entity director, you play a critical increasing participation of Aboriginal
role in ensuring entities deliver on these Victorians in water and catchment The water sector can only deliver the
objectives and support the liveability of management, and embedding community service Victorians expect if the sector works
Victoria’s towns and cities. engagement in the way we work. collaboratively. To that end, my department
is committed to providing opportunities for
It’s a significant task. To meet these challenges, the Minister
directors to access up-to-date information
In 2020, Victoria’s water corporations for Water, the Hon Lisa Neville MP, has
through a number of director development
will provide services to over 2.8 million appointed you to support our boards with
forums that will help you network and
customers (including households, businesses the skills they require, and to represent and
collaborate with your peers.
and farms), employ approximately 6,000 connect with our diverse communities.
staff, generate $6.4 billion in revenue, and Congratulations on your appointment. Together, we can build and
invest $1.9 billion on capital works. CMAs will In your role as director, you have strengthen our leadership in
deliver a range of waterway and catchment significant administrative and governance water and catchment management
health programs and the VEWH will manage responsibilities and this Guide to Governing
over a million megalitres of water to achieve to deliver service excellence
in the Water Sector (the Guide) has
environmental outcomes. In addition, the been prepared to help you navigate to Victorian communities.
VCMC will provide advice to the Minister for those responsibilities.
the Environment and the Minister for Water
This includes putting the standards of
on land and water management issues.
conduct expected by directors, as set out
Victoria’s water entities – on behalf of the in the Code of Conduct for Directors of
Victorian Government – must address Victorian Public Entities, at the centre of
important challenges, including climate everything you do.
3
Contents
Secretary’s foreword 3 Catchment Management Authority 21 The Administrative Responsibilities 49 Part 5 67
Boards of Water Entities Useful context of the legal
Abbreviations 5
Obligations under the Catchment and
Land Protection 1994
21 Summary table of reporting requirements 49
and policy framework in which
Purpose of this guide 6 Corporate plans 50
water entities operate
Appointment of a CEO 21 Annual reports 51
Part 1 7 Victorian Catchment Management 22 Continuous disclosure 52 Key Ministerial Portfolios 68
Where director’s standards Council Emergency management 53 and Legislation
of behaviour and conduct are set Victorian Environmental Water Holder 23
Critical Infrastructure Resilience 54 Ministers with portfolio responsibilities 69
and Business Cases relevant to water entities
Director’s Standards of Behaviour: Responsibilities of all 25 The Victorian Policy Framework 55 Summary of whole-of-government 70
The Public Administration Act 2004 8 Water Entity Boards Water for Victoria 55 legislative responsibilities
Duties for directors of public sector entities 8 Risk Reporting 25 Catchment management framework 56
Public sector values 9 The Victorian Public Sector 73
Climate Change Risk Management 25 The National Policy Framework 57
Duty of the chairperson of a public entity 10 Attest to the Actions of the Board or Entity 25 Intergovernmental Agreements 57 Key Departments and Agencies 74
Duties of the board 10
Rights of Directors 26 The National Water Initiative 57 Victorian Public Sector Commission 75
Accountability to the Minister 11
Remuneration and Terms for Directors 26 The Murray-Darling Basin and Commonwealth 58 Department of Environment, Land, Water 77
Director’s Conduct: Codes of Conduct 12 Water Act 2007 and Planning
Director Development 26
The Code of Conduct for Directors of 12 The National Landcare Program 59 Department of Treasury and Finance 79
Victorian Public Entities
Part 3 28 The Water Allocation Framework 60 Department of Health and Human Services 80
The importance of a director acting with integrity 13
Understanding the roles Bulk Entitlements 60 Victorian Independent Remuneration Tribunal 81
Director’s use of information 13 Essential Services Commission 82
and responsibilities of the Environmental entitlements 61
Managing pecuniary interests and conflicts of Environment Protection Authority 83
interest 14 entities you are directing Water Shares 61
Commissioner for Environmental Sustainability 84
Section 51 licences 61
Role of the Department 15
Department of Jobs, Precincts and Regions 84
Distinction between the Board’s Role 29 Section 67 licences 62
Performance of Directors and Boards 16 Department of Justice and Community Safety 84
and the Entity’s Role: Leadership vs
Regulation of Director’s Conduct 17 Delivery Part 4 64 Emergency Management Victoria 85
Oversight by the Victorian Ombudsman 17 Understanding the role of Inspector General for Emergency Management 85
The Functions of Victoria’s 30
Investigations by the Independent Broad-based 17 the board and the role of Associations 86
Water Entities
Anti-Corruption Commission ministers and government VicWater 86
The Principal Body of Law Relating to Water 30
Vic Catchments 86
in Victoria – Water Act 1989
Part 2 18 The role of ministers 65 Australian Water Association 86
Functions of Water Corporations 31
Director’s responsibilities Water Services Association of Australia 87
Functions of Catchment Management Authorities 43 The role of government 66
as a member of the board Functions of the Victorian Catchment 48
Institute of Water Administration 87
Management Council Australian National Committee 88
Water Corporation Boards 19 Functions of the Victorian Environmental 48
on Large Dams Incorporated
Strategic planning 19 Water Holder
Appointing a Managing Director 19
4
Abbreviations A Guide To Governing
In The Water Sector
Contents
Abbreviations
Australian Competition EMV Emergency Management MDBA Murray-Darling Basin
ACCC Victoria Authority Purpose
and Consumer Commission
EMMV Emergency Management Part 1 7
ANCOLD Australian National Manual Victoria NWI National Water Initiative
Committee on Large Dams Where director’s standards
Incorporated SEPPs State Environment of behaviour and conduct are set
EWOV Energy and Water
Ombudsman Victoria Protection Policies
AWA Australian Water Part 2 18
Association SoO Statement of Obligations Director’s responsibilities
EPA Environment Protection
Authority as a member of the board
BEs Bulk entitlements TRP Total remuneration
Environment Protection package Part 3 28
Bureau of Meteorology EPBC
BoM and Biodiversity Understanding the roles
Act Conservation Act 1999 VAGO Victorian Auditor-General’s and responsibilities of the
CaLP Act Catchment and Land Office entities you are directing
Protection Act 1994 Essential Services
ESC
Commission VCMC Victorian Catchment Part 4 64
CMAs Catchment management Management Council Understanding the role of
authorities Independent Broad-
IBAC the board and the role of
based Anti‑Corruption VCAT Victorian Civil and
Cth Commonwealth Administrative Tribunal ministers and government
Commission
CEWH Commonwealth VEWH Victorian Environmental Part 5 67
IGEM Inspector General for
Environmental Water Water Holder Useful context of the legal
Emergency Management
Holder and policy framework in which
IWA Institute of Water VIRT Victorian Independent water entities operate
COAG Council of Australian Administration Remuneration Tribunal
Governments
ICOLD International Commission VPDSF Victorian Protective Data
DELWP Department of on Large Dams Security Framework
Environment, Land, Water
and Planning LoE Letter of Expectations VPSC Victorian Public Sector
Commission
DHHS Department of Health and Protective Data Security
PDSP Water Industry Regulatory
Human Services Plan WIRO
Order
DJPR Department of Jobs, Public Administration Act
PAA Waste Management
Precincts and Regions 2004 WMPs
Policies
DTF Department of Treasury PEER Public Entity Executive
and Finance Remuneration WSAA Water Services Association
of Australia
MDB Murray-Darling Basin
5
Purpose of this guide A Guide To Governing
In The Water Sector
Contents
Abbreviations
This Guide has been prepared to provide an overview at a point in time (February 2020) of the
Purpose
administration and governance framework for water corporations, the Victorian Environmental Water
Holder (VEWH), the Victorian Catchment Management Council (VCMC) and catchment management Part 1 7
Where director’s standards
authorities (CMAs); herein referred to as water entities.
of behaviour and conduct are set
The intent of this Guide is to provide you, a director of a Victorian water entity, an introduction to the Part 2 18
Director’s responsibilities
legislation, ministers, government departments and agencies that play a role in the oversight and as a member of the board
management of water entities and their boards. This document gives you guidance on the responsibility
Part 3 28
and accountability you hold as director for the strategic direction of your organisation. Understanding the roles
and responsibilities of the
This Guide is not designed as a replacement for any existing publications, nor is it to be used as a entities you are directing
replacement for formal legal advice. Please remain mindful of the potential for legislation and policy to
Part 4 64
change following the publication of this Guide. Unless stated otherwise, the legislation referred to in this Understanding the role of
Guide is Victorian as at February 2020. the board and the role of
ministers and government
Links throughout this publication enable the reader to access and explore further information.
Part 5 67
This Guide is one of several available that provides guidance on the legislative and regulatory Useful context of the legal
and policy framework in which
frameworks and policy environments in which water entities operate. water entities operate
The Department of Environment, Land, Water and Planning’s (DELWP) website On Board provides
contemporary information and resources on key governance topics. On Board’s support modules (e.g.
conflict of interest, probity) include model policies and templates, guidance notes, governance guides,
and other governance information and tools tailored specifically for DELWP agencies.1
On Board has links for downloading this Guide and other governance guides, such as the DELWP Guide
to Good Governance – Board Members, which is a more general introduction to good governance for
board members that aims to assist them to understand and perform their duties. 2 It is based on the
Victorian Public Sector Commission’s (VPSC) informative resource Welcome to the Board, which can also
be accessed via On Board.
1 Boards should have established policies that are consistent with DELWP’s model policies. This will assist the board in meeting its governance obligations
2 At the time of printing, the Guide to Good Governance – Board Members is being updated. While this is occurring, the principles in the DSE version of the guide still apply
6
photo credit South Gippsland Water photo credit Lower Murray Water
Part 1
Where director’s standards
of behaviour and conduct are set
7
Director’s Standards of Behaviour: A Guide To Governing
In The Water Sector
The Public Administration Act 2004
Contents
Abbreviations
As a director of a public entity, you are in a leadership position and your actions, decisions and Purpose
behaviour set the tone, culture and direction for your entity’s employees, contractors and customers.
Part 1 7
Whilst you have some autonomy in setting the culture for your entity, you are subject to policies that set Where director’s standards
the expected conduct for all public sector directors, including: the Public Administration Act 2004 (PAA) of behaviour and conduct are set
and the Victorian Public Sector Commission’s Code of Conduct for Directors of Public Entities. These are Director’s Standards of 8
explained in more detail below. Behaviour: The Public
Administration Act 2004
Duties for directors of public sector entities Director’s Conduct: 12
Codes of Conduct
Under the PAA (Section 79) the director of a public entity board – in the exercise of the functions of their Performance of 16
Directors and Boards
office – must always act:
Regulation of 17
• honestly Director’s Conduct
• in good faith in the best interests of the public entity
Part 2 18
• with integrity Director’s responsibilities
as a member of the board
• in a financially responsible manner
Part 3 28
• with a reasonable degree of care, diligence and skill, and Understanding the roles
and responsibilities of the
• in compliance with the Act or subordinate instrument or other document under which entities you are directing
the public entity is established. Part 4 64
Understanding the role of
A director must not improperly use their position or any information acquired by them the board and the role of
by reason of their position to: ministers and government
• gain an advantage for them self or another person, or Part 5 67
Useful context of the legal
• cause detriment to the public entity. and policy framework in which
water entities operate
8
Public sector values A Guide To Governing
In The Water Sector
The PAA (Section 7) sets out the expected standards of behaviour across the public sector. They apply to
directors of water entities. These are: Contents
Abbreviations
Table 1 Public sector values
Purpose
Responsiveness Respect Impartiality
Part 1 7
Integrity Leadership Accountability Where director’s standards
of behaviour and conduct are set
Human rights
Director’s Standards of 8
Behaviour: The Public
In applying these values, a director of an entity must: Administration Act 2004
• model the values and ensure staff are informed of them, and Director’s Conduct: 12
Codes of Conduct
• ensure any values of your entity are consistent with these public sector values.
Performance of 16
Directors and Boards
photo credit North Central CMA, cultural heritage mapping Barapa Water for Country project
Regulation of 17
Director’s Conduct
Part 2 18
Director’s responsibilities
as a member of the board
Part 3 28
Understanding the roles
and responsibilities of the
entities you are directing
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
9
Duty of the chairperson of a public entity A Guide To Governing
In The Water Sector
The chairperson of a public entity must ensure that all policies adopted by, or relevant to, the public
entity or the board of the public entity are provided, or made readily accessible, to all directors of the Contents
entity (Section 80, PAA). Abbreviations
Purpose
Duties of the board
Part 1 7
The PAA (Section 81) sets out what the board of a public entity must do, summarised as follows: Where director’s standards
of behaviour and conduct are set
• act consistently with the functions and • ensure there is a procedure in place to deal Director’s Standards of 8
objectives of the entity with conflicts of interest Behaviour: The Public
Administration Act 2004
• keep the Minister and the Department • ensure there is an adequate gifts policy for
Director’s Conduct: 12
abreast of risk management procedures and directors in place Codes of Conduct
risks to the effective operation of the entity • ensure there are procedures in place for Performance of 16
Directors and Boards
• respond to requests for information from the proper conduct of board meetings
Regulation of 17
Minister and the Department • maintain appropriate financial records that Director’s Conduct
• ensure there are procedures in place to assess are audited by the Auditor-General, and
Part 2 18
director and board performance • ensure there are adequate controls to prevent Director’s responsibilities
as a member of the board
• ensure there is a code of conduct in place fraudulent behaviour.
for directors Part 3 28
Understanding the roles
and responsibilities of the
entities you are directing
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
10Accountability to the Minister A Guide To Governing
In The Water Sector
The PAA (Section 85) states that the board of a public entity is accountable to the responsible Minister
for conducting its functions. The Minister is then responsible to the Victorian Parliament for the public Contents
entity fulfilling its function. Abbreviations
To strengthen how a public entity conducts itself, the Minister can: Purpose
• appoint and remove directors Part 1 7
Where director’s standards
• give directions or request information from directors of behaviour and conduct are set
• control or affect the public entity’s operation, and Director’s Standards of 8
Behaviour: The Public
• initiate a review of the entity’s management system, structures or processes. Administration Act 2004
See more information about the role of ministers. Director’s Conduct: 12
Codes of Conduct
Performance of 16
photo credit Lower Murray Water Directors and Boards
Regulation of 17
Director’s Conduct
Part 2 18
Director’s responsibilities
as a member of the board
Part 3 28
Understanding the roles
and responsibilities of the
entities you are directing
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
11Director’s Conduct: Codes of Conduct A Guide To Governing
In The Water Sector
Contents
The Code of Conduct for Directors of Victorian Public Entities Abbreviations
The VPSC’s Code of Conduct For Directors of Victorian Public Entities is binding to all public sector Purpose
directors (Section 4, PAA). It was last updated in March 2016. It is your duty as a director to be familiar
Part 1 7
with the most current version of this code. Where director’s standards
of behaviour and conduct are set
Based on the Victorian public sector values, the Code of Conduct for Directors helps directors
and statutory office holders to act appropriately and with the trust of the public from the date Director’s Standards of 8
Behaviour: The Public
of appointment. Administration Act 2004
The code should be reflected in how you perform your duties as well as in the relationship you have with Director’s Conduct: 12
Codes of Conduct
your portfolio minister, departmental and public entity staff, and the community. The VPSC considers a
Performance of 16
breach of the code to be misconduct and in the most serious cases it may lead to suspension or removal
Directors and Boards
from office.
Regulation of 17
Director’s Conduct
The code covers such areas as:
• leadership and stewardship Part 2 18
Director’s responsibilities
• board authority and delegation as a member of the board
• best interests of the public entity Part 3 28
Understanding the roles
• honesty and integrity, and and responsibilities of the
entities you are directing
• conflicts of interest and duty.
Part 4 64
You can find further information about director’s integrity standards at On Board and while you’re there, Understanding the role of
see the support modules (e.g. Code of conduct, Conflict of interest, Gifts, benefits and hospitality). On the board and the role of
ministers and government
Board also contains direct links to guidance materials on the VPSC and other useful websites.
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
12The importance of a director acting with integrity A Guide To Governing
In The Water Sector
Integrity is a principle of good governance and good governance maintains the Victorian community’s
trust in public institutions. Contents
Abbreviations
Integrity is one of the Public Sector Values under Section 7 of the PAA, which is demonstrated by being
honest and transparent, using powers responsibly, avoiding conflicts of interest and sustaining public Purpose
trust. Without trust, public institutions lose their social licence to operate, which creates challenges
Part 1 7
for adaptive responses to emerging issues. You are required to exhibit integrity as a leader in your Where director’s standards
organisation, as determined by the following: of behaviour and conduct are set
Director’s Standards of 8
The Code of Conduct for Directors of Victorian Public Entities requires that:
Behaviour: The Public
• Directors act with honesty and integrity. They comply with laws, policies and generally accepted Administration Act 2004
standards of behaviour. They are open and transparent in their dealings. Director’s Conduct: 12
Codes of Conduct
• Directors give proper consideration to matters before the Board. They express their views genuinely,
Performance of 16
clearly and without ambiguity. They disclose the information or considerations they relied upon Directors and Boards
in coming to their view. They speak up when a decision or advice is being considered that may be Regulation of 17
detrimental to the public interest and vote to record their view. Director’s Conduct
Part 2 18
Director’s use of information Director’s responsibilities
as a member of the board
As a director of a water entity, you must not make improper use of information acquired by virtue of your
Part 3 28
position to create pecuniary advantage or with intent to cause detriment to the water entity (Section 108 Understanding the roles
of the Water Act 1989 and Section 18F of the Catchment and Land Protection Act 1994 (CaLP Act)). Take and responsibilities of the
entities you are directing
particular care to ensure that information you receive as a board member is kept confidential, both
during the term of your appointment and beyond. It is important that you ensure that any documents Part 4 64
Understanding the role of
you receive electronically are not accessible by others. the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
13Managing pecuniary interests and conflicts of interest A Guide To Governing
In The Water Sector
As a director of a water entity, if you have a pecuniary interest in any matter directly or indirectly
concerning the entity, you should ensure those matters are appropriately disclosed and managed in Contents
accordance with the relevant legislation and guidelines. Abbreviations
The Water Act 1989 (Sections 109-114 for water corporations and Sections 33DJ for the VEWH) and the Purpose
CaLP Act (Sections 18G-18L for CMAs) impose requirements relating to disclosure, as well as attendance
Part 1 7
at a meeting and voting where a director has a pecuniary interest in any matter in which the water Where director’s standards
entity is concerned. of behaviour and conduct are set
Director’s Standards of 8
The Department of Premier and Cabinet’s (DPC) Appointment and Remuneration Guidelines (Clauses 6.7
Behaviour: The Public
to 6.10) require all public sector directors to complete a Declaration of Private Interests before initial Administration Act 2004
appointment and if reappointed, annually during your term of appointment, or if there is a material Director’s Conduct: 12
change in your interests. Following appointment, DELWP provides a specific form for this purpose for Codes of Conduct
use by directors of public entities in the DELWP portfolio. This form is available on the On Board website Performance of 16
Directors and Boards
under ‘Conflict of Interests’, then ‘Declaration of Private Interests’.
Regulation of 17
Water entity boards may require a declaration from any other employee engaged in a role where there Director’s Conduct
is the potential for a conflict of interest to arise. For example, where the employee is involved in the
Part 2 18
selection of a tenderer for a major project. These declarations should also be made upon appointment, Director’s responsibilities
annually and whenever circumstances change. as a member of the board
Part 3 28
Understanding the roles
and responsibilities of the
entities you are directing
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
14Role of the Department A Guide To Governing
In The Water Sector
Under the PAA (Section 13A), the Secretary of the relevant department is responsible for:
Contents
a advising the public service body Minister or Ministers on matters relating to a relevant public entity,
Abbreviations
including the discharge by the public entity of its responsibilities, including those under this or any
other Act, and Purpose
b working with, and providing guidance to, each relevant public entity to assist the entity on matters Part 1 7
Where director’s standards
relating to public administration and governance.
of behaviour and conduct are set
To facilitate this responsibility the Secretary has nominated a relationship manager for each DELWP Director’s Standards of 8
entity. For water entities, the relationship manager is the Executive Director of Partnerships and Sector Behaviour: The Public
Administration Act 2004
Performance, Water and Catchments Group. Relationship managers are available to provide guidance
and assist you on matters relating to public administration and governance. Director’s Conduct: 12
Codes of Conduct
Performance of 16
photo credit Yarra Valley Water, Craigieburn Hub Directors and Boards
Regulation of 17
Director’s Conduct
Part 2 18
Director’s responsibilities
as a member of the board
Part 3 28
Understanding the roles
and responsibilities of the
entities you are directing
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
15Performance of A Guide To Governing
In The Water Sector
Directors and Boards
Contents
Abbreviations
Boards are required to assess their own performance Purpose
and the performance of individual directors, deal
with poor performance by directors, and resolve Part 1 7
Where director’s standards
disputes between directors (Section 81 of PAA). of behaviour and conduct are set
Guidance on board performance assessment is
Director’s Standards of 8
provided by the VPSC with specific requirements set Behaviour: The Public
by the Minister. Administration Act 2004
Director’s Conduct: 12
The Minister for Water has written to each water Codes of Conduct
sector entity setting out those requirements.
Performance of 16
Requirements for board performance reporting are Directors and Boards
also set in the SoO for both the water corporations Regulation of 17
and CMAs. Director’s Conduct
Part 2 18
Director’s responsibilities
as a member of the board
Part 3 28
Understanding the roles
and responsibilities of the
entities you are directing
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
photo credit Corangamite CMA, Peterborough Summer by the Sea - Estuary Explorers
16Regulation of Director’s Conduct A Guide To Governing
In The Water Sector
Contents
Oversight by the Victorian Ombudsman Abbreviations
The Ombudsman investigates complaints raised by any member of the public about state government Purpose
departments, most statutory authorities, and local government. This includes water entities and their
Part 1 7
boards. Investigations may be about the lawfulness of an agency’s actions or decisions, or about the Where director’s standards
reasonableness and fairness of those actions. The Ombudsman will not usually intervene unless the of behaviour and conduct are set
aggrieved person has first raised their concerns with the responsible government authority and the Director’s Standards of 8
matter has not been resolved. The Victorian Ombudsman is an independent officer of the Victorian Behaviour: The Public
Administration Act 2004
Parliament established under the Ombudsman Act 1973.
Director’s Conduct: 12
Codes of Conduct
Investigations by the Independent Broad-based Anti-Corruption Commission
Performance of 16
Directors and Boards
Under the Independent Broad-based Anti-Corruption Commission Act 2011, the Independent Broad-
based Anti-Corruption Commission (IBAC) can investigate corrupt conduct or misconduct in public Regulation of 17
Director’s Conduct
office of a public sector employee in Victoria. Corrupt conduct can include taking bribes, the dishonest
performance of functions, the misuse of information, or fraud. Misconduct in public office focuses on Part 2 18
Director’s responsibilities
the ‘breach of public trust’ element and may involve a failure to take appropriate action or the failure to
as a member of the board
disclose and properly manage a conflict of interest or other integrity concerns. This applies to boards
Part 3 28
and directors. Understanding the roles
and responsibilities of the
entities you are directing
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
17photo credit North Central CMA, River Detectives photo credit Goulburn Broken CMA, Planting with National Fisheries Association at Hughes Creek
Part 2
Director’s responsibilities
as a member of the board
18Water Corporation Boards A Guide To Governing
In The Water Sector
In addition to the obligations provided to directors of public entities by the PAA (see Part 1), Contents
water corporation boards also have obligations under the Water Act 1989. Abbreviations
Purpose
See Part 3 for a summary of the key functions of water corporations over which the board presides.
Part 1 7
Where director’s standards
Strategic planning of behaviour and conduct are set
Under Section 95(4) of the Water Act, the board of a water corporation is responsible for:
Part 2 18
• the strategic planning of the corporation, and Director’s responsibilities
as a member of the board
• the management and affairs of the corporation.
Water Corporation Boards 19
In so doing, the board must have regard for the sustainable management principles set out in the Catchment Management 21
Water Act (Section 93) and the entity’s business objective (see Sections 94 and 95(5)). Authority Boards
Victorian Catchment 22
The business objective requires water corporations to act as efficiently as possible, consistent with Management Council
commercial practice. The sustainable management principles include internationally recognised Victorian Environmental 23
environmental concepts to ensure that water resources are conserved and properly managed for Water Holder
sustainable use and for the benefit of present and future generations (see Section 93(a)). Responsibilities of all 25
Water Entity Boards
Balancing the obligations of the sustainable management principles and the business objectives of a
Rights of Directors 26
water corporation is a key task for each water corporation and its board.
Part 3 28
Water corporations must also take into consideration the obligations set out in the SoO and LoE Understanding the roles
(see Part 3). and responsibilities of the
entities you are directing
Appointing a Managing Director Part 4 64
Understanding the role of
The board of a water corporation may appoint a managing director of the water corporation, who is also the board and the role of
ministers and government
a member of the board of directors (Section 99, Water Act 1989). The managing director is responsible
for the day-to-day management of the water corporation. Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
19The managing director is the only executive director of the board and is the primary link between the A Guide To Governing
board and the water corporation’s staff. The managing director is responsible for communicating board In The Water Sector
priorities and policies to staff, and presenting reports, submissions and budgets to the board.
Contents
Abbreviations
Some differences between a managing director and a chief executive officer
Purpose
A water corporation managing director (MD) is a board member who is employed by the board
with responsibility for the day-to-day management of the organisation. The MD is subject to Part 1 7
Where director’s standards
director’s duties, employment contract duties, the Code of Conduct for Directors of Victorian of behaviour and conduct are set
Public Entities (as a board-member) as well as the Code of Conduct for Public Sector Employees
(as an employee of the entity). Part 2 18
Director’s responsibilities
A CMA chief executive officer (CEO) is not a formal board member but is responsible for the as a member of the board
day-to-day management of the organisation. Like MDs, CEOs have duties in their employment
Water Corporation Boards 19
contract and must comply with the Code of Conduct for Public Sector Employees.
Catchment Management 21
Authority Boards
A water corporation must also have internal policies (e.g. gifts, benefits and hospitality policy) that form
Victorian Catchment 22
part of its governance framework to ensure it complies with Victorian laws and government policies. Management Council
Directors ensure the organisation acts consistently with these policies. Victorian Environmental 23
Water Holder
Responsibilities of all 25
Water Entity Boards
photo credit Yarra Valley Water
Rights of Directors 26
Part 3 28
Understanding the roles
and responsibilities of the
entities you are directing
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
20Catchment Management Authority Boards A Guide To Governing
In The Water Sector
In addition to the obligations provided to directors of public entities by the PAA (see Part 1 of this Guide), Contents
CMA boards also have obligations under the CALP Act and the Water Act 1989. Abbreviations
Purpose
For a summary of the key functions of CMAs, over which the board presides, see Part 3.
Part 1 7
Where director’s standards
Obligations under the Catchment and Land Protection 1994 of behaviour and conduct are set
The board of a CMA (Section 16 of the CaLP Act) is responsible for:
Part 2 18
• the strategic planning of the CMA Director’s responsibilities
as a member of the board
• deciding the policies of the CMA, and
Water Corporation Boards 19
• the management and affairs of the CMA. Catchment Management 21
Authority Boards
Appointment of a CEO Victorian Catchment 22
Management Council
A CMA board may appoint a person as the CEO of the CMA according to Section 19G of the CaLP Act.
Victorian Environmental 23
Water Holder
Responsibilities of all 25
Water Entity Boards
Rights of Directors 26
Goulburn Broken CMA, revegation on the Acheron River
photo credit
Part 3 28
Understanding the roles
and responsibilities of the
entities you are directing
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
21Victorian Catchment Management Council A Guide To Governing
In The Water Sector
The VCMC is established under the CaLP Act and its members are appointed by the Governor in Council Contents
on the recommendation of the Minister. Abbreviations
Purpose
The VCMC is Victoria’s key advisory body on catchment management. Its major statutory roles are to:
Part 1 7
• advise the Minister, and any other Minister as requested, on matters relating to, and priorities for, Where director’s standards
catchment management and on the condition of the land and water resources of the state of behaviour and conduct are set
• encourage the cooperation of organisations involved in catchment management, and Part 2 18
Director’s responsibilities
• report every five years in its annual report on the condition and management of Victoria’s land and as a member of the board
water resources; its last five-yearly report was the VCMC Catchment Condition and Management
Water Corporation Boards 19
Report 2017.
Catchment Management 21
Authority Boards
Victorian Catchment 22
More information Management Council
Victorian Environmental 23
Visit the VCMC website Water Holder
Responsibilities of all 25
Water Entity Boards
Rights of Directors 26
Part 3 28
Understanding the roles
and responsibilities of the
entities you are directing
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
22Victorian Environmental Water Holder A Guide To Governing
In The Water Sector
The Victorian Environmental Water Holder is an independent statutory body established under the Contents
Water Act 1989 and is responsible for holding and managing Victoria’s water for the environment. Abbreviations
Purpose
The VEWH is responsible for preparing annual seasonal watering plans for the whole or different parts
of the state. Each seasonal watering plan scopes the ‘when’, ‘where’, ‘how’ as well as the rationale for Part 1 7
Where director’s standards
applying water for the environment across Victoria’s rivers, wetlands and catchments. It is prepared of behaviour and conduct are set
in consultation with CMAs, the community, Traditional Owners, water corporations and other relevant
agencies. It must consider any seasonal watering proposal developed by a waterway manager, Part 2 18
Director’s responsibilities
i.e. Melbourne Water or a CMA with water management responsibilities. as a member of the board
Water Corporation Boards 19
Catchment Management 21
Authority Boards
Victorian Catchment 22
photo credit DELWP, Hattah Lakes 2018 Management Council
Victorian Environmental 23
Water Holder
Responsibilities of all 25
Water Entity Boards
Rights of Directors 26
Part 3 28
Understanding the roles
and responsibilities of the
entities you are directing
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
23Water for the environment (referred to in the Act as the “Water Holdings”) includes environmental A Guide To Governing
entitlements, water shares and Section 51 licences held by the VEWH. It also includes water held by the In The Water Sector
Commonwealth Environmental Water Holder (CEWH) to be managed by the VEWH by agreement. This
Contents
ensures that all water set aside for environmental purposes can be consistently managed to achieve the
best environmental outcomes. Abbreviations
Purpose
The functions of the VEWH also include acquiring additional rights and entitlement to water and
entering into agreements for the provision of works to enable the efficient and effective application of Part 1 7
Where director’s standards
water for the environment. This may include agreements with water corporations. of behaviour and conduct are set
Where environmental water is stored, water corporations work closely with the VEWH and waterway
Part 2 18
managers, regarding the release and delivery of the water. Director’s responsibilities
as a member of the board
Waterway managers are also typically responsible for the operational aspects of applying water for the
Water Corporation Boards 19
environment. This is done in accordance with a seasonal watering statement issued by the VEWH.
Catchment Management 21
Authority Boards
Victorian Catchment 22
photo credit North Central CMA, Gunbower Forest Management Council
Victorian Environmental 23
Water Holder
Responsibilities of all 25
Water Entity Boards
Rights of Directors 26
Part 3 28
Understanding the roles
and responsibilities of the
entities you are directing
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
24Responsibilities of all Water Entity Boards A Guide To Governing
In The Water Sector
Contents
Risk Reporting Abbreviations
The board of a water entity must inform the responsible Minister and the DELWP Secretary of “known Purpose
major risks” to the effective operation of the entity and of the risk management systems that it has in Part 1 7
place to address those risks (Section 81, PAA). Where director’s standards
of behaviour and conduct are set
Climate Change Risk Management Part 2 18
Director’s responsibilities
All boards have responsibilities in relation to climate change. A guidance note on managing climate as a member of the board
change risk has been prepared for board members and executives of Victoria’s water entities discharge
Water Corporation Boards 19
this responsibility. It sets out their duty of care in relation to climate change and describes the process to
Catchment Management 21
discharge that duty with due diligence. This guidance note actions one element of a package of actions Authority Boards
under the Minister for Water’s Pilot Water Sector Climate Change Adaptation Action Plan. Victorian Catchment 22
Management Council
Attest to the Actions of the Board or Entity Victorian Environmental 23
Water Holder
Chairs or accountable officers are periodically required to attest to the delivery of functions or
Responsibilities of all 25
standards of performance. Examples of these include: Water Entity Boards
• Annual report attestations required by Directions 5.1.4, 5.2.2 and 5.2.3 of the Minister for Finance’s Rights of Directors 26
Standing Directions under the Financial Management Act 1994
Part 3 28
• Protective Data Security Plan (PDSP) attestation required by the Victorian Protective Data Security Understanding the roles
and responsibilities of the
Framework (VPDSF) which is established under Part Four of the Privacy and Data Protection Act 2014, entities you are directing
and
Part 4 64
• Risk Management Plan attestation required by Emergency Management Act 2013 (Section 74N). Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
25Rights of Directors A Guide To Governing
In The Water Sector
Contents
Remuneration and Terms for Directors Abbreviations
The board of water entities may be entitled to remuneration for undertaking its role, as board members Purpose
and as members of the board’s committees. Whilst remuneration is set by the relevant Minister, the Part 1 7
Minister must follow the DPC’s Appointment and Remuneration Guidelines which include remuneration Where director’s standards
of behaviour and conduct are set
bands to help guide the Minister when setting the remuneration for board members.
Terms of appointment can be: up to five years for commissioners of the VEWH, up to four years for Part 2 18
Director’s responsibilities
directors on water corporation boards and members on CMA boards, and up to three years for members as a member of the board
of the VCMC.
Water Corporation Boards 19
Director Development Catchment Management 21
Authority Boards
Water entities and DELWP provide ongoing support to all non-executive directors, which includes Victorian Catchment 22
Management Council
attendance at industry events and participation in development programs. Chairs work with individual
Victorian Environmental 23
directors to support continuous improvement and development of skills and knowledge.
Water Holder
DELWP facilitates a director development program covering key governance issues for directors of water Responsibilities of all 25
entities. The program provides an opportunity to: Water Entity Boards
Rights of Directors 26
• gain a deeper understanding of public sector values and expected behaviours
• gain a good understanding of the water sector’s legislative and governance framework Part 3 28
Understanding the roles
• gain a deeper understanding of director’s duties and responsibilities of the
entities you are directing
• understand the complex stakeholder relationships across government, and
Part 4 64
• network with other directors, DELWP officers and other government departments and agencies. Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
26A Guide To Governing
In The Water Sector
Contents
North Central CMA, Loddon River Serpentine
photo credit
Abbreviations
Purpose
Part 1 7
Where director’s standards
of behaviour and conduct are set
Part 2 18
Director’s responsibilities
as a member of the board
Water Corporation Boards 19
Catchment Management 21
Authority Boards
Victorian Catchment 22
Management Council
Victorian Environmental 23
Water Holder
Responsibilities of all 25
Water Entity Boards
Rights of Directors 26
Part 3 28
Understanding the roles
and responsibilities of the
entities you are directing
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
27photo credit South Gippsland Water photo credit South Gippsland Water
Part 3
Understanding the roles and responsibilities
of the entities you are directing
28Distinction between the Board’s Role A Guide To Governing
In The Water Sector
and the Entity’s Role: Leadership vs Delivery
Contents
Abbreviations
Boards set the organisation’s objectives and performance targets and ensure alignment with relevant Purpose
government policy and compliance with relevant legislation.
Part 1 7
Corporate plans, business plans and entity policies are key mechanisms through which boards execute Where director’s standards
of behaviour and conduct are set
their responsibilities for strategic planning, influencing culture and championing good governance within
your organisation. Part 2 18
Director’s responsibilities
The role of the board and its directors, and the role of the entity as managed by the managing as a member of the board
director or chief executive officer, are distinct. As a director, you are responsible for the strategic
Part 3 28
planning of your entity, and you are not responsible for its day-to-day operations; that is the role of the Understanding the roles
managing director. and responsibilities of the
entities you are directing
Distinction between the Board’s 29
Role of Board Members Role and the Entity’s Role:
The board is accountable for what happens to the agency and for the actions that the agency Leadership vs Delivery
takes. As part of its monitoring role, the board must take reasonable steps to ensure that it is The Functions of Victoria’s 30
Water Entities
being properly informed by the managing director and other senior staff (e.g. chief financial
officer). This is particularly important in relation to major risks for the effective operation of the The Administrative 49
Responsibilities of Water Entities
organisation. The board cannot avoid its accountabilities simply by claiming that ‘it was not told
of the true situation’. The board has a duty to take appropriate measures to ensure that it is The Victorian Policy Framework 55
properly informed. The National Policy Framework 57
The Water Allocation Framework 60
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
29The Functions of Victoria’s Water Entities A Guide To Governing
In The Water Sector
Contents
The Principal Body of Law Relating to Water in Victoria – Water Act 1989 Abbreviations
The Water Act 1989 creates the principal body of Victorian law relating to water. The functions of the Purpose
boards and entities created under this Act must be read in the context of the purpose of the Act itself. Part 1 7
The purpose of the Water Act 1989 includes: Where director’s standards
of behaviour and conduct are set
• providing for the integrated management of all elements of the terrestrial phase of the water cycle
Part 2 18
• promoting the orderly, equitable and efficient use of water resources Director’s responsibilities
as a member of the board
• making sure that water resources are conserved and properly managed for sustainable use for the
benefit of all Victorians, and Part 3 28
Understanding the roles
• maximising community involvement in making and implementing arrangements relating to the use, and responsibilities of the
conservation or management of water resources. entities you are directing
Distinction between the Board’s 29
Amongst other things, the Water Act 1989: Role and the Entity’s Role:
Leadership vs Delivery
• establishes the framework for the allocation and management of the state’s water resources
The Functions of Victoria’s 30
• sets out the functions, powers and obligations of water entities with responsibilities for water supply Water Entities
irrigation and salinity mitigation, wastewater management, waterway management, regional The Administrative 49
drainage and floodplain management, and Responsibilities of Water Entities
• establishes governance arrangements for water corporations and the VEWH. The Victorian Policy Framework 55
The National Policy Framework 57
photo credit North Central CMA, fencing at Tylden The Water Allocation Framework 60
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
30Functions of Water Corporations A Guide To Governing
In The Water Sector
The core functions of water corporations are set out in the Water Act 1989. These functions vary across
the 19 water corporations depending on whether the corporation is an urban water corporation, a rural Contents
water corporation, an urban and water corporation, a metropolitan water corporation or Melbourne Abbreviations
Water. Collectively, across all water corporations, these functions may include, but are not limited to: Purpose
• water supply services • salinity mitigation services Part 1 7
Where director’s standards
• wastewater services • recreational area management of behaviour and conduct are set
• waterway management • asset management Part 2 18
Director’s responsibilities
• drainage (regional) • dam safety management as a member of the board
• floodplain management • water storage management
Part 3 28
• trade waste and related services • water metering Understanding the roles
and responsibilities of the
• irrigation • emergency management entities you are directing
• licensing Distinction between the Board’s 29
Role and the Entity’s Role:
photo credit South Gippsland Water Leadership vs Delivery
The Functions of Victoria’s 30
Water Entities
The Administrative 49
Responsibilities of Water Entities
The Victorian Policy Framework 55
The National Policy Framework 57
The Water Allocation Framework 60
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
31Statements of Obligations A Guide To Governing
In The Water Sector
Under the Water Industry Act 1994, which provides the framework for the economic regulation of
the water sector, the Minister for Water has the power, after consultation with the Treasurer and the Contents
Essential Services Commission, to issue a SoO to one or a number of water corporations (Section 4I). Abbreviations
The purpose of the SoO is to specify the obligations of a water corporation in relation to the Purpose
performance of its functions and the exercise of its powers. SoOs provide a means for a government Part 1 7
to give force to government policy in a transparent way and to ensure that actions taken by the water Where director’s standards
of behaviour and conduct are set
corporation are included in the price review process. Traditionally, a SoO is updated or issued when a
new government commences or there is a significant change in government policy. Currently there are Part 2 18
Director’s responsibilities
three SoOs issued by the Minister. as a member of the board
• Statement of Obligations (General) applies to all water corporations and sets obligations relating to
Part 3 28
such matters as pricing submissions, board performance, customer and community engagement,
Understanding the roles
planning, water services, and compliance. and responsibilities of the
entities you are directing
• Statement of Obligations (Systems Management) applies only to the metropolitan water corporations
and provides operating rules for the augmented Melbourne water supply system. Distinction between the Board’s 29
Role and the Entity’s Role:
• Statement of Obligations (Emissions Reduction) applies to all water corporations and relates to the Leadership vs Delivery
reduction of greenhouse gas emissions. The Functions of Victoria’s 30
Water Entities
The Administrative 49
photo credit Gippsland Water, Soil and Organics Recycling Facility Responsibilities of Water Entities
The Victorian Policy Framework 55
The National Policy Framework 57
The Water Allocation Framework 60
Part 4 64
Understanding the role of
the board and the role of
ministers and government
Part 5 67
Useful context of the legal
and policy framework in which
water entities operate
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