Governance

Board Buddies

One of the biggest complaints made against non-profit organisations by members is that they are not consulted and not informed about what is happening. As the non-profit sector continues to develop, there has been a move away from boards made up of representative directors towards boards comprising independent, skills-based directors. While most would applaud this development, there have been a number of unintended consequences. The first has been a degree of separation anxiety.

Governance and Legal Risk Management

The terms governance, clinical governance and legal risk are much bandied about but hold different meanings for different people. Some of the possible interpretations include:- Minimising Liability – particularly steps to reduce liability and exposure. Accountability – improving accountability and transparency within organisations, particularly decision making. Risk management – dealing with legal risk, financial risk and business risk within an enterprise. Compliance – meeting statutory, regulatory and other requirements. In the usual context legal risk management relates to how boards can be satisfied that risks and liabilities within an enterprise are being addressed.

Committee vs Board – What is Your Role?

The governance structures of not-for-profit organisations in Australia have never been more under the microscope than at present. At the Commonwealth level, major reform is underway concerning the regulation of the NFP sector, initiated by the Productivity Commission Report 2010. Initially, the newly established national regulator, the Australian Charities and Not-for-profits Commission (ACNC), will concentrate on our Charities, with a remit to remove complex regulations and onerous reporting burdens, to clarify the legal definition of charity and to provide greater transparency for funders and the public.

Board Culture: Is Your Board a Learning Space?

The Victorian Government is currently looking at changing its laws around the composition of the governing bodies of universities, removing designated positions for staff and students, and ensuring that such representatives can only be appointed if they have ‘the necessary skills’. Many not-for-profit organisations have designated positions on their boards for members, volunteers or consumer representatives. Faced with increasing pressures to have highly skilled and professional boards, organisations may be tempted to follow the Victorian Government’s lead and abandon commitments to representation and inclusion.

Importance of Good Governance for CEOs

Chief Executive Officers (CEOs) and Boards enjoy a unique relationship, one that is built on key elements such as trust, professional integrity and honesty. The very survival of a CEO often comes down to their relationship with the Board. In this case study I will be emphasising five governance issues, governance learnings and possible governance tools and resources available to assist Boards and CEOs. In September 2008 the Board of an aged care organisation in far North Queensland, employing over 200 staff and one of the major employers in the town, determined that the relationship with the then CEO had deteriorated to the point where in their view termination was the only option.

The Multiplier Effect of Better Governance

Whether your organisation is a not-for-profit, SME or a large public company, it will benefit from the multiplier effect of better governance. Getting governance right makes for a healthy, effective and responsible Board. It ensures that a clear message is delivered to all stakeholders, and that employees are engaged, which leads to higher productivity and lower employee turnover. This article will outline the attributes of good governance and how they can lead to benefits for an organisation, as well as explain how you can test your governance system.

What Does Good Governance Look Like?

The definition of Good Governance is akin to the definition of hard-core pornography offered by Justice Potter Stewart1 - we cannot define it, but we ‘know it when we see it’. The high levels of governance and accountability required of both the private and public sectors in Australia are now being demanded in the not-for-profit (NFP) sector. While there does exist a view that governance standards in the NFP sector are not at the same standard as required in the commercial sector, this is far from the truth.

What Makes An Effective Board Member?

The job of an effective board (with the CEO) is to set strategic direction and determine goals for the organisation. Their job is also to ensure that the organisation is run according to its constitution, complies with relevant law and is managed in a financially prudent way. Big Picture Thinking Think about your reason for becoming a board member. Many board members of not for profit organisations get onto the board because there is something about the work of the organisation that they want to influence.

Governance Training for Non-Profit Boards

Governance is a leadership process, and to function effectively, individual board members and boards as a whole, should have a clear understanding not only of their governance roles and responsibilities but also how to practically and correctly apply them within a leadership framework or context. Thus regular governance training is essential for non-profit boards. Taking on a role as a board or committee member can sound relatively straight forward, but it could be interesting to note how many members of your board can clearly and concisely describe their actual governance roles and responsibilities.

Management vs Governance – It’s Not That Easy

During our education on governance and directorship we are taught that “directors govern and managers manage”. The analogy of steering versus rowing is often used to describe the delineation of roles between directors and managers. Most directors are well aware of this. It seems that many boards are challenged with the task of getting the ‘right’ balance between governance and management. Why is this so? Experienced directors are aware that every board is different in terms of the way they implement their governance role.