Councillors are elected to govern the Council for the benefit of the local community. A Council puts in place systems and processes to control and monitor — or govern — the Council. Governance is not the same as management. Councillors do not manage the Council; the CEO does this. Management ensures the day-to-day operations of the Council are carried out within the framework of policies and strategic guidelines the councillors have established.
Councillors provide leadership even though they cannot, under the legislation, direct Council staff. They do this by modelling appropriate behaviours and setting appropriate strategic priorities.
Councillors are responsible for two broad areas of performance and compliance. This requires that Councillors perform the following essential functions:
- Strategic direction — participate with management in setting policies, goals, strategies and performance targets for the organisation to meet both legislative and community expectations.
- Resources — make available to management the resources to achieve the strategic plan — the money, management, manpower and materials, the CEO’s appointment and a succession plan.
- Performance — monitor the organisation’s performance against its strategies and targets.
- Compliance — ensure management has adequate processes in place to comply with legal and accounting requirements.
- Risk — ensure management has identified risks to which the organisation is exposed and suitable processes are in place to manage those risks.
- Accountability to stakeholders — report progress to stakeholders, especially the electorate as their appointed representatives, and align the collective interests of community, Council, management and employees.
Councillors have duties under the Local Government Act and duties arising from the organisation’s activities. Duties are not owed to any particular group of community members, but to the community as a whole.
To discharge this duty a government is required to act in good faith on behalf of the community and not to benefit from its elected role. Conflicts of interest are the most likely triggers of a claim under fiduciary duty law. This is closely followed by negligence.
These duties are similar to those applied to directors of commercial corporations but may have harsher penalties if a breach is proven. The duties include:
- duty to act honestly
- duty to act with due diligence
- duty to safeguard information
- duty not to misuse position.