Articles

Financial Metrics: A Guide for NFP Boards

It’s easy to count how much money you’ve made. It’s not so easy to demonstrate that you really are helping children to reach their full potential, or how effectively you’ve raised awareness of a rare disease. Yet not-for-profit (NFP) organisations are increasingly expected to quantify their achievements – and the directors must ensure they’re measuring the right things. “The board sets the strategic direction and will want to track the organisation’s progress and achievement of these objectives,” says Andrea Petersen, Managing Director, Not for Profit Accounting Specialists.

The Role of Newbies in the Boardroom

Not-for-profit organisations are increasingly looking for a younger presence in the boardroom for the digital skill sets and perspective they can bring to emerging areas of board oversight, including strategy, digital marketing and online fundraising. Changing a board’s demographics and traditions comes with risks as less experienced directors often require more training and resources early in their tenure to better understand and fill their roles. Often boards pair new members with experienced directors who serve as coaches during the transition.

Fulfilling Your Obligations as a Not-for-profit Director

When Mark Edmonds joined his first not-for-profit (NFP) board he was surprised by what he found. “I’d attended board meetings as a senior executive and, because the role interested me, I’d also completed a company directors course,” says Edmonds, who is currently chairman of Barwon Community Legal Centre, deputy chair of the Geelong Chamber of Commerce and a director of the Geelong Cemeteries Trust. “I was very happy to be offered a place on a local statutory committee but, from my first meeting, I could see that these people either had limited ideas about their duties and responsibilities or were paying them scant attention.

Cybersecurity – Is This a New Directors’ Duty?

When not-for-profit organisations hear about cybersecurity issues and big data breaches in large international companies such as Facebook and Target, they often make the mistake of assuming that issues surrounding cybersecurity will not apply to them. The reality is that not-for-profits are very popular targets for cybersecurity attacks. This is because they often hold a ‘goldmine’ of sensitive information, while also being less equipped to protect themselves from these threats.

Customer-Centricity and Creating Better Social Outcomes

How important do you think customers are for your not-for-profit (NFP) organisation to achieve its objectives? Can you see the relationship between customer-centricity and your organisation’s goals to create better social outcomes? In this article, I invite you to explore the concept of customer-centricity in NFP organisations, understand its values, as well as present some case studies to demonstrate how this approach can help your organisation to create better social outcomes.

Could Your Board Be Asking Better Questions?

In accordance with Section 180 of the Corporations Act (2001), ‘A director or other officer of a corporation must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise’. Section 180 also includes the Business Judgment Rule, whereby to demonstrate that a director has exercised due care and diligence, a director should be able to demonstrate that they acted in good faith, made the judgment in good faith for a proper purpose, did not have a material personal interest in the judgment, informed themselves about the subject matter of the judgment to the extent they reasonably believed to be appropriate, and rationally believed the judgment to be in the best interests of the corporation.

Diversity in the Boardroom

In the boardroom, diversity can enhance decision-making and drive more wide-ranging and probing discussions. It can also help remove the blind spots that can keep important matters out of sight. “Research shows time and time again that diversity improves outcomes in a number of ways, including financial performance, the quality of decision making, reputation and the ability to innovate,” says Alicia Curtis, co-author of Difference Makers: A Leader’s Guide to Championing Diversity on Boards.

Customer-Centric Governance… Customer is King, Cashflow is Queen

In a challenging, competitive customer-driven environment Customer-Centric Governance is critical for boards to adopt to ensure their organisation keeps on winning in the future. The need to balance and integrate ‘heads and hearts’ with ‘business and service’ is becoming increasingly more challenging, yet more compelling for directors, chief executive officers and executives (leadership teams) of community businesses (NFPs). Integrating and balancing an organisation’s business objectives and outcomes in the new customer-driven, competitive marketplace with existing or future service objectives and outcomes is a tough call, particularly given that many leadership teams remain oriented to the government-funded welfare mentality and approach.

Why External Coaching for Your Executives is Critical

There are very few safe harbours in the world these days and for the isolated CEO or executive carrying all the pressure, providing them with one will make a significant difference to their performance and longevity, and through them, the organisation. It doesn’t matter how smart, insightful or even self-aware you are, getting a quality, external perspective helps. Someone to help sort the important from the urgent, who doesn’t have a vested interest in anything other than your success.

Talking the Talk and Walking the Walk (But with Heart)

Introduction: Fiduciary Duty (Have a Heart) Board members have fiduciary duties that include acting in good faith in the best interests of their organisation, avoiding conflicts with their own personal interests, acting with reasonable care, skill and diligence and not using their positions to misuse information, gain profits or obtain benefits for themselves or for anyone else.1 Put another way, board members need to have a heart to create a culture in which the organisation’s strategy arises out of its inherent values.