A Guide To Governing In The Water Sector - GOVERNANCE GUIDANCE FOR DIRECTORS AND THE EXECUTIVES REPORTING TO THEM - DELWP

 
A Guide To Governing In The Water Sector - GOVERNANCE GUIDANCE FOR DIRECTORS AND THE EXECUTIVES REPORTING TO THEM - DELWP
A Guide To Governing In The Water Sector
  GOVERNANCE GUIDANCE FOR DIRECTORS AND THE EXECUTIVES REPORTING TO THEM
A Guide To Governing In The Water Sector - GOVERNANCE GUIDANCE FOR DIRECTORS AND THE EXECUTIVES REPORTING TO THEM - DELWP
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
A Guide To Governing In The Water Sector - GOVERNANCE GUIDANCE FOR DIRECTORS AND THE EXECUTIVES REPORTING TO THEM - DELWP
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
A Guide To Governing In The Water Sector - GOVERNANCE GUIDANCE FOR DIRECTORS AND THE EXECUTIVES REPORTING TO THEM - DELWP
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
A Guide To Governing In The Water Sector - GOVERNANCE GUIDANCE FOR DIRECTORS AND THE EXECUTIVES REPORTING TO THEM - DELWP
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
A Guide To Governing In The Water Sector - GOVERNANCE GUIDANCE FOR DIRECTORS AND THE EXECUTIVES REPORTING TO THEM - DELWP
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
A Guide To Governing In The Water Sector - GOVERNANCE GUIDANCE FOR DIRECTORS AND THE EXECUTIVES REPORTING TO THEM - DELWP
photo credit   South Gippsland Water   photo credit   Lower Murray Water

Part 1
Where director’s standards
of behaviour and conduct are set
                                                                           7
A Guide To Governing In The Water Sector - GOVERNANCE GUIDANCE FOR DIRECTORS AND THE EXECUTIVES REPORTING TO THEM - DELWP
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
A Guide To Governing In The Water Sector - GOVERNANCE GUIDANCE FOR DIRECTORS AND THE EXECUTIVES REPORTING TO THEM - DELWP
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
A Guide To Governing In The Water Sector - GOVERNANCE GUIDANCE FOR DIRECTORS AND THE EXECUTIVES REPORTING TO THEM - DELWP
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

                                                                                                                                           10
Accountability 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

                                                                                                                                           11
Director’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

                                                                                                                                             12
The 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

                                                                                                                                           13
Managing 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

                                                                                                                                           14
Role 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

                                                                                                                                             15
Performance 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

                                                                                                                                                                         16
Regulation 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

                                                                                                                                             17
photo 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
                                                                                                                                                        18
Water 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

                                                                                                                                       19
The 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

                                                                                                                                             20
Catchment 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

                                                                                                                                               21
Victorian 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

                                                                                                                                        22
Victorian 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

                                                                                                                                         23
Water 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

                                                                                                                                         24
Responsibilities 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

                                                                                                                                               25
Rights 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

                                                                                                                                       26
A 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

                                                                                          27
photo credit   South Gippsland Water   photo credit   South Gippsland Water

Part 3
Understanding the roles and responsibilities
of the entities you are directing
                                                                              28
Distinction 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

                                                                                                                                               29
The 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

                                                                                                                                            30
Functions 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

                                                                                                                                            31
Statements 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

                                                                                                                                           32
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