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Lives at every stage are touched by human services. Childcare, aged care, community and disability organisations all rely on strong governance to protect those in their care.
The Oakden Aged Care Facility scandal in South Australia was cited by the 2021 Royal Commission into Aged Care Quality and Safety as an important catalyst for recognising the depth of problems in Australia’s aged care sector. Critical governance breakdowns included inadequate complaint mechanisms, failure to investigate reported concerns, lack of clinical oversight and absence of effective leadership despite multiple warning signs.
But what’s changed since then? Australia’s aged care and childcare sectors are undergoing their most significant regulatory transformation in decades, driven by catastrophic failures that have resulted in lives lost and children systematically abused. Directors acknowledge there are good organisations doing great work, but challenges remain.
The Aged Care Act 2024, which started in November 2025, now explicitly requires directors to prioritise care recipient interests over shareholder returns – a watershed moment that signals parallel reforms heading toward the childcare sector and human services more broadly.
Directors now face civil penalties and potential banning orders. Details of the failings and the discussions about solutions provide plenty of lessons for all directors, not just those in the care sector. The regulatory shift represents a fundamental recalibration of director duties.
“Care governance increasingly requires directors who can understand and manage a particular tension; that is, in order to deliver high-quality care, our organisations must be adaptable and responsive,” says Virginia Bourke FAICD, chair of Mercy Health, a national not-for-profit provider of health and aged care services.
“We must be open to trying new things, adapting to technology quickly and committed to continuously improving delivery of care in ways that improve quality of life for the people we serve.”
At the same time there is a significant regulatory layer that requires rigour and focus to ensure compliance. “Directors taking on roles in human services organisations need to respond to this tension with a careful weighing of risk and clarity about the outcomes the organisation is seeking to achieve,” says Bourke.
Professor Luis Prado GAICD is chief academic officer at health leadership development and advisory organisation the Australian Institute of Health Executives. He says it is critical health and care board directors understand their roles and responsibilities in terms of clinical governance.
“The failure of a board and individual directors to ensure that an appropriate clinical governance framework is in place is a major risk for the organisation, for the board and also for directors individually, professionally and personally. The consequences are increasingly significant, impacting on professional standing and reputation, which can impact an individual’s potential for director roles.”
Inadequacies in clinical governance often have serious consequences for patients and clients, and directors are more and more concerned that legislation and regulation relating to directors’ responsibilities could see additional personal risk for directors.
“The failure to be trained in and understand clinical governance as a board director could be seen as a critical failure in undertaking the duties of the position,” says Prado.
Collective will to do better
The AICD’s Care Governance Assembly in Sydney in February brought together more than 30 leaders to workshop how governance capability can be strengthened across the sector. Participants agreed that understanding how care is delivered, what quality care looks like and where harm can occur is not something that can be delegated to management. It belongs in the boardroom.Metrics need to be designed with the understanding that it can never be “all nice”. Remaining curious, said participants, is key to maintaining the social licence that prevents governance from collapsing into box-ticking compliance.
Rather than measuring what has gone wrong, good care governance means “designing for vulnerability”, building systems that make it structurally difficult for harm to occur in the first place.
Care literacy is as fundamental as financial literacy
One of the roles of the board chair is to ensure you have the collective skills around the board table, says Rosina Hislop FAICD, chair of South Australian retirement living and in-home care services provider ECH.
“Care literacy is as fundamental as financial literacy in the boardroom. The whole board has to have a level of care literacy. You cannot rely on a single care expert to carry out that responsibility. I’d ask that boards strive to have a true understanding of the daily experience of people in their care. The better boards are asking not just are we compliant, but are our clients thriving under our watch?”
Delayed identification of emerging issues and an over-reliance on retrospective or lag indicators create risk, says Bourke.
“There is a real danger in normalising behaviours or complaints, or the level of complaints. Governance of the care and human services sectors can be difficult, challenging and there are many constraints. Directors should guard against complacency or relying on a collective sense that we’re doing our best. That might be the case, but the real question for the board is whether our best is good enough for the people we serve.”
Dr Martin Laverty, CEO of NDIS disability services provider Aruma, notes because caregivers are human, not everything goes exactly to plan. “My bias says every board needs both a lawyer and an accountant,” he says. “Care provider boards need both a service consumer representative and a nurse. No-one understands clinical governance better than experienced senior nurses.”
Laverty’s doctoral thesis replicated a seminal US study that found directors who contribute most to a firm’s profits had prior management experience in the type of enterprise they were governing.
“This evidence indicates those who succeed in management teams of care providers are suited to transition to boards of care providers,” he says. “In other words, care service boards should appoint directors who’ve managed care services before elsewhere.”
Culture and training
Sangeeta Venkatesan GAICD, chair at RSL LifeCare, says psychological safety, speaking up, dignity of residents, ethical courage, and respect for both residents and staff are fundamental governance issues. If a decision cannot be defended – not just clinically, but culturally or ethically – then it’s not a good decision, even if RSL LifeCare is compliant from a governance standpoint, she says.
“The board must foster a culture where staff feel psychologically safe to speak up and report issues. We’re dealing with people’s lives, so a strong culture is absolutely critical. That starts from the top, having the right management team, ensuring people feel free to speak up, have a collaborative approach to shared risks, and we learn and get better over time.”
Trust and relationships
The board-CEO relationship increasingly needs a strong sense of partnership, says Bourke. “High transparency, a sense of shared accountability, real clarity and agreement about our quality and experience measures and a genuine shared commitment to improvement. It’s important the board is not simply discussing a problem, but actually seeks to hold management to account for taking action in relation to whatever the issue is.”
As NSW Commissioner for Children and Young People from 1999–2009, Gillian Calvert AO established the commission as one of Australia’s leading children’s policy and research centres.
“Regulators and commissioners can provide industry benchmarking,” says Calvert. “Board members are not full-time, whereas the regulator, funders and commissioners have far greater resources to examine your organisation. The question is whether the regulation is fit for purpose. The Productivity Commission’s report in December 2025, says that actually, they’re not. They’re placing a burden on agencies that could be better redirected to service delivery. So that needs addressing.”
Calvert points out the obvious challenge – the person providing the care is actually a long way from the board. How can that distance be managed effectively?
“I’ve noticed a tendency for boards to set up a care governance subcommittee or committee, and they play a really important role bringing external expertise into that process. However, what I’m also seeing is that they then sideline the care issues to that care governance committee, so it becomes the role of the committee, not the role of the board. It’s essential the board is across care governance issues. The board has to be responsible.”
NFP director remuneration
The question of paying board members is an ongoing topic of debate. Some organisations have the capacity to consider it, but many don’t. However, Calvert says remuneration respects and acknowledges the critical role the board plays in delivering quality care outcomes and in seeing care work as requiring high levels of skill, knowledge and capability.
“Care governance is important work, not an add-on in order to make a resume look good and demonstrate NFP experience,” she says, adding that remuneration also strengthens accountability.
“A volunteer board will not have the same expectations of each other as a paid board. When you’re dealing with people’s lives, which we’re doing in the care sector, then we should have high expectations.”
What emerges is the sector’s collective resolve to lift standards and restore trust. There is firm agreement that care governance sits at board level; that composition matters; that lived experience strengthens oversight; and that designing for vulnerability not compliance is essential. And embedding a speak-up culture and preparing for crises are central to improving outcomes.
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Bringing lived experience onto the board: Disability Trust case study
In 2024, The Disability Trust (TDT), a major NFP provider of disability, mental health and employment services, appointed a person with an intellectual disability to its board.
The TDT board has directors whose professional, academic and advocacy expertise combines with their lived experience.
Deputy chair Carol Heijo MAICD is legally blind; Associate Professor Shane Clifton GAICD is a C5 incomplete quadriplegic; and chair Dr Peter Langkamp OAM FAICD is the primary carer for his eldest son, who has a disability.
Langkamp says intellectual disability representation on TDT’s board was a significant gap and facilitated a change to its constitution to enable an appointment.
“It is imperative to make changes so lived experience is embedded into all aspects of our governance and decision making,” he says.
“For strong governance foundations, lived experience representation must be backed up by accessible structures and processes.”
Andrew Radford, an autistic man with an intellectual disability, met all the requirements and his tenure on the TDT board began in February 2025. An advocate for people with disability, he has been a participant with TDT for more than 20 years.
“I am standing up for myself and having my voice heard,” he says. “I grew up with everyone making decisions for me and telling me what I couldn’t do. Now it’s like, yes, I can, we can. We have the same rights as everyone else.”
The TDT board has developed an inclusive governance policy, co-designed by people with lived and living experience.
Resources include information in plain English, Easy Read materials, independent support and accessible meeting practices.
“Nothing about us without us – it’s our time to shine,” says Radford.
Scenario planning and being prepared - Liesel Wett OAM, chair Barnardos Australia
As a director and chair, some of the things I’ve been involved in have been around natural disasters. Scenario planning, whether it might be a fire, flood, what do we do? How are we getting our residents out? Who do we have a co-relationship with so we might be able to move our residents into their facility?
When the swine flu was starting in Asia and we were putting a plan of action in place, it was the first time in my life I thought if I didn’t do my job properly, somebody would die. So we prepared.
Roll forward to the most recent COVID pandemic. I was chair at Goodwin Aged Care. We had plans in place, but had never really road-tested them. As we learned more about the pandemic, the way in which it spread and the risk areas, we changed tack – and changed many times.
That’s a big lesson I learned – you need to be agile and to back your clinicians, or put another way, your deep-content people. We’re probably one of very few organisations that had no deaths from COVID. That was because we’d invested before the pandemic – in our systems, our clinical infrastructure, our training of clinicians. That put us in good stead for when the pandemic finally hit. It was about preparation for that black swan event.
Childcare conundrum
In the opinion of Early Childhood Australia CEO Sam Page GAICD, the free-market approach hasn’t worked for early childhood education and care.
“It perhaps doesn’t work for human services more generally,” she says. “Despite significant federal government spending (the Child Care Subsidy alone cost $14.5b in 2024–25), the sector has been heavily reliant on private investment, particularly with long daycare infrastructure.”
This has seen a diversity of providers. Of the 7220 approved providers that operate 18,000-plus services, 78 per cent are small operators with just one service (delivering 31 per cent of all services). One to two per cent are large operators with over 25 services (delivering 36 per cent of all services).
Many are for-profit small businesses or corporations. NFP and public providers (public schools and local government) have a smaller footprint, but perform significantly better on quality ratings and assessments.
“Competition in the context of oversupply does not drive better quality. It erodes quality by putting too much pressure on the workforce and reducing the capacity of providers to invest in their education teams. The extent to which operators are attracted to the sector for quick wins and high returns is at odds with the ethos of early childhood education and care that puts children at the centre of every decision and prioritises their wellbeing and rights.
“Having people on the boards with expertise and lived experience in early childhood education and care is important. There is precedent here in health delivery, where the need for clinical governance is more established.”
This article first appeared under the title 'Horse Power' in the April/May 2026 Issue of Company Director Magazine.
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