As Not-for-Profit Board members, are we helping or hindering the Organisation realise it’s goals?

I am a proud Graduate of the Australian Institute of Company Directors, a Non-Executive Director, have sat on not-for-profit boards for 10 years, and firmly believe in the principles of good corporate governance.

But, I do have cause to question how well some not-for-profit Boards are serving their Organisations.

Many not-for-profits are to be commended on their standard of corporate governance, with a highly engaged Board that bring their skills, experience and passion to the table to support the Executive at a strategic level. A Board, chaired effectively, recruited to a skills matrix with annual Board agenda, strategically aligned with the Organisation’s mission and objectives. Those that do this in a way that serves all stakeholders well have something valuable to share.

To me, serving all stakeholders well means:

• The needs of the “Customer” be that Individuals, Communities, Members always come first;
• Fulfilling the Mission through realising the Strategic Objectives of the Organisation;
• Empowering and enabling the Executive and their staff to focus on these Objectives;
• Executive and staff feel supported by the Board, and not servants of the Board; and
• A healthy relationship with Funders.

What we ideally would like to avoid is:

• The Executive and staff spending inordinate amounts of time preparing unnecessary Board papers, or otherwise attending to the demands of the Board. Time that could otherwise be spent on addressing one of the many significant challenges to meet the Organisation’s strategic objectives.
• The Board wading through volumes of papers that are not assisting the decision making process, but distracting from it.
• Decision making being hindered by inappropriate delegations of authority.
• Well-meaning Non-Executive Directors interfering with operational matters and in doing so, dis-empowering Executive staff.
• Small resource constrained organisations complying with the burden of bureaucracy.

 “Management and the board must work together as a team to achieve the organisation’s purpose. For this relationship to be effective, each must understand and respect the role of the other. Directors must be prepared to seek and accept management’s advice, but to do so in a way that is constructively critical and challenging without undermining trust or being unduly interfering” –ÁICD Not-for- Profit Governance Principles January 2019

I would encourage all of us who have volunteered as Non-Executive Directors for Not-For-Profit organisations for the purpose of contributing to our community, to ask ourselves 2 key questions:

1.      How much value are we adding; versus

2.      How much extra work are we creating for the Executive and staff?

Consider:

1. Is the frequency of Board and Committee meetings, and number of Sub-Committees appropriate for the Organisation?
2. Are the Delegations of Authority still appropriate? When were they last reviewed?
3. When was the last time the Board & Executive discussed the relevance of the format and content of the Board papers?
4. Do we really need that extra bit of information, or that information presented differently, or is it just nice to have?  Will it improve Board decision making?
5. What is the cost of obtaining that information? In a resource constrained Organisation, consider, how many hours overtime will it involve. What other Customer focussed more important work will be pushed aside in the meantime?
6. Are you aware of the accrued leave liabilities and time off in lieu owed to staff?
7. Are there other ways the Board could familiarise themselves with the issues, mitigating the requirements for staff to write multi page briefing reports?
8. And remind yourself and each other often “nose in, fingers out”

“Management and the board must work together as a team to achieve the organisation’s purpose. For this relationship to be effective, each must understand and respect the role of the other.”

Not-for-Profit Governance Principles