Governance

Structure

St John of God Health Care Inc. is an incorporated association, the members of which are the directors of St John of God Australia Ltd, a civil and canon law entity established in 2004 to sponsor the ministry that was previously sponsored by the Sisters of St John of God. The Sisters are members of St John of God Australia Ltd and share sponsorship of the ministry with eight of the dioceses in which the group operates as well as the Hospitaller Order of St John of God. This collaboration ensures sound and continued governance and stewardship.

St John of God Health Care has a two-tiered governance structure comprising Trustees and a Board.

Trustees

The Trustees (p92) are appointed by the members of St John of God Australia Ltd and have canonical responsibility for St John of God Health Care. They bring a wealth of skills and experience and exercise a range of authorities, including the appointment and evaluation of Board members and ensuring that our ministry remains faithful to its role within the Catholic Church. The Trustees meet 11 times a year.

The Trustees’ Annual General Meeting was held on 6 October 2016. At the meeting, the Trustees received St John of God Health Care’s 2015-16 Annual Report and its financial accounts for the year ended 30 June 2016. The Chair of the Board and the Group Chief Executive Officer provided an overview of the year and discussed plans for the 2016-17 year.

Board

The Board (p95) is appointed by the Trustees, with members accountable to the Trustees for the organisation’s ongoing stewardship and strategic development. Board members are selected for their varied and complementary skills and are drawn from a wide range of backgrounds.

In addition to attending six Board meetings each year, Board members this year attended a Risk and Strategy Workshop in November 2016, a Board retreat in November 2016 and formation workshops in July 2016 and March 2017.

Group Management Committee

The Group Chief Executive Officer is appointed by the Board and, as the most senior operational appointment, is accountable to it for the organisation’s day-to-day management across Australia, New Zealand and the Asia-Pacific region.

The Group Chief Executive Officer convenes and chairs a Group Management Committee (p96) comprising senior executives who provide assistance and advice on operational matters. The committee meets six times a year in person for two days at a time, and participates in various other workshops as required.

Governance

Governance is the system by which St John of God Health Care is directed and managed. It is the framework within which the healthcare group works to realise its Vision and fulfil its Mission. Governance influences how objectives are set and achieved, how risk is assessed and monitored and how performance is optimised.

St John of God Health Care governance structures are modelled on best practice and assist in ensuring innovation, development, prudent stewardship, accountability and control commensurate with the risks involved.

Good principles of governance

St John of God Health Care applies principles of good corporate governance and associated good practice recommendations based on those promulgated by, among others, the Corporate Governance Council of the Australian Stock Exchange. The application of these principles is as follows:

Laying solid foundations for management and oversight

The roles and responsibilities of the Trustees, Board and management are set out in the St John of God Health Care Inc. constitution. In addition, the Governance Authority Matrix addresses matters reserved for the Trustees, the Board and the Group Chief Executive Officer, while a Management Authority Matrix identifies matters for which the Group Chief Executive Officer, senior executives and the St John of God Hauora Trust Board (New Zealand) have delegated authority.

Appropriate mechanisms to monitor the performance and development of senior executives are in place with all senior executives assessed annually. In addition, senior executives participate in a 360-degree feedback process once every three years that assesses behaviour against a leadership profile, with feedback forming part of annual performance review and development conversations.

Structuring the Board to add value

With the exception of the Group Chief Executive Officer, members of the Board, including its Chair, are non-executive directors. The Trustees, the senior level of the two-tier governance structure, regularly consider future nominations to the Board to ensure it is comprised of individuals with an appropriate skill mix.

Through a formal evaluation process, the Board considers its performance as a whole as well as that of its sub-committees and individual directors. In addition, the Trustees consider Board performance through the Board Development Committee. The Trustees also evaluate their own performance.

The Board has adopted an annual Board timetable that schedules regular presentations from senior managers, focused on key operational, strategic or Mission-related issues.

Promoting ethical and responsible decision making

Our Vision 2015-2019 is the cornerstone document that guides us and includes the Vision, Mission and Values of the organisation, the key result areas for work to be undertaken and the guiding principles and defined outcomes to be achieved in each key result area. The Our Vision 2015-2019 document has been widely promulgated among caregivers and utilised in the development of a new five-year strategic plan.

Safeguarding integrity in financial reporting

The Audit and Risk Committee has a key role in safeguarding the integrity of financial reporting. As with all Board committees, it has written terms of reference. Its membership comprises three non-executive Board members. Dr Julie Caldecott chaired the committee throughout the year.

In addition to external audit, well-resourced and effective compliance, risk management and internal audit functions operate and report to the Audit and Risk Committee. Their focus is on the key risks faced by the organisation.

Recognising and managing risk

A dedicated governance team has accountability for embedding and maturing the group’s approach to enterprise risk management and compliance, as well as the internal audit function. The Group Director Governance reports quarterly to the Audit and Risk Committee on risk, compliance and audit matters and annually to the Board on the group’s risk profile.

Ongoing assessment of the adequacy and effectiveness of risk management systems is also undertaken by the Board through its committees and various internal, external and regulatory agency reviews including the internal audit program.

The internal audit program operates in accordance with an internal audit charter and an annual internal audit plan. Areas of assurance are mapped against key risk areas as part of the annual internal audit planning process, ensuring targeted and effective reviews. Management responses to risk issues, and action plans to rectify identified or potential risks, are monitored to ensure effectiveness and appropriate implementation.

In addition, internal audits are undertaken in relation to specific areas of risk, both at a divisional and organisation-wide level.

Management also signs an annual representation letter providing the Board with assurance that its operations, including financial reports, are based on a sound system of risk management and internal control.

Remunerating fairly and responsibly

The Board’s Remuneration Committee has written terms of reference to ensure remuneration for senior managers is appropriate and that its relationship to performance is clear.

Remuneration for non-executive directors is set by the Trustees and is therefore clearly distinguished from the process for setting remuneration for the Group Chief Executive Officer (the only executive director on the Board) and senior executives, which is set by the Board on advice from the Remuneration Committee.

Board meetings and committees

Board meetings

Chaired by Tony Howarth, the Board comprises 10 members including the Group Chief Executive Officer. The Board is accountable to the Trustees for the ongoing stewardship and development of the organisation, including all aspects of its Mission, service delivery and financial performance.

Audit and Risk Committee

Chaired by Dr Julie Caldecott, the Audit and Risk Committee comprises three non-executive board members and assists the Board to fulfil its fiduciary and corporate governance responsibilities by: overseeing the integrity and quality of financial information presented to the Board; overseeing the scope and quality of internal and external audit functions; monitoring the identification and management of risks; and monitoring compliance with statutory responsibilities. Ernst and Young continued to act as the external auditor and the internal audit function is performed by internal resources with support from PwC.

Finance and Investment Committee

Chaired by Peter Prendiville, the Finance and Investment Committee comprises five Board members (four non-executive directors and the Group Chief Executive Officer), an independent investment expert and the Group Director Finance. The committee reviews financial performance, administers and manages surplus funds and also considers and makes recommendations on financial and investment matters.

Mission Integration Committee

Chaired by Jack de Groot, the Mission Integration Committee comprises four Board members (three non-executive directors and the Group Chief Executive Officer) and the Group Director Mission Integration, an external mission integration expert and the Group Manager Formation. The committee gives form and shape to Board members’ understandings of St John of God Health Care as a ministry of the Catholic Church and also works to raise awareness of the lived expression of the Vision in the delivery of services.

Clinical Performance Committee

Chaired by Dr Rosanna Capolingua, the Clinical Performance Committee comprises four Board members, the Group Chief Executive Officer, the Group Director Medical Services, the Group Director Nursing, a clinical nurse, a medical doctor and a consumer representative. The primary purpose of the committee is to assist the Board in fulfilling its governance responsibilities in relation to the organisation’s clinical performance, particularly with regard to patient safety and quality.

Remuneration Committee

Chaired by Tony Howarth, the Remuneration Committee comprises three non-executive Board members. It aims to ensure fair and responsible remuneration and takes advice from an independent remuneration consultant. It reviews the Group Chief Executive Officer’s performance and makes recommendations to the Board on remuneration for this position and that of the senior executive group.