7.0 Duties and Responsibilities of Board Members

Over and above the duties and obligations placed upon their private sector counterparts, members of Government Boards assume a public trust and confidence by virtue of their role in the public administration. Under the common law (as opposed to statute law) they have a fiduciary relationship or duty to the company/authority which has been developed by the courts. A fiduciary relationship is a relationship between a person in a position of special power and responsibility (the fiduciary) and the person for whose benefit the fiduciary acts.

The 'person' in the position of special power and responsibility in this instance will be the Board authority which has been developed by the courts. A fiduciary relationship is a relationship between a person in a position of special power and responsibility (the fiduciary) and the person for whose benefit the fiduciary acts. The 'person' in the position of special power and responsibility in this instance will be the Board.

Board members must act ethically so as to support the continuance of public trust in the Government and to observe the highest standards of behaviour and accountability. Fiduciary responsibilities are onerous, particularly because in many cases members are responsible for the expenditure of taxpayers' money and the custody and control of public assets.

Aside from more general issues such as the public trust and confidence placed in Board members as trustees of public monies, there are numerous other sources of responsibility placed upon Board members. These include common law obligations such as the duty to take reasonable care, specific legislation such as the Corporations Act 2001 and a broad range of policy statements (such as guidelines and directives produced by the Australian Stock Exchange) whether specifically applying to the body, or more generally applicable. (Government Owned Corporations are dealt with specifically in section 11of this Guide.)

Therefore, sources of legal responsibility for Board members include:

• the enabling Act constituting the Government Board;
• the common law, especially as regards the fiduciary nature of the relationship between the director and the Government Board; and
• any relevant specific statutory enactments (general legislation).

An outline of the nature and extent of some of these obligations is set out below.

• 7.1 Enabling legislation
• 7.2 Common law
• 7.3 General legislation
• 7.4 Judicial Review
• 7.5 Freedom of Information
• 7.6 Privacy
• 7.7 The Ombudsman
• 7.8 Corporations Act 2001 (Cth)
• 7.9 Integrity Commissioner
• 7.10 Code of conduct
• 7.11 Restrictive trade practices
• 7.12 Approval requirements
• 7.13 Delegations
• 7.14 Accountability arrangements for subsidiary companies
• 7.15 Overseas travel for official purposes
• 7.16 Credit cards

Last reviewed: 17 July, 2009

Last updated: 22 July, 2009

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