Articles

The Art of Financial Management

Mr. Micawber’s famous, and oft-quoted recipe for happiness highlights the importance of strong financial management: Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery — Charles Dickens, David Copperfield It is important for boards of non-profit and community sector organisations to focus on strong financial management. These organisations typically have external stakeholders on whom they rely for funding.

Property Portfolio Dilemmas Faced by CEOs

Of the many challenges faced by a CEO, including resourcing, staff, clients, regulations, technology and finance, the property portfolio of a non-profit organisation is typically viewed as something that is static and therefore seldom proactively managed until a major issue develops. CEOs from the non-profit sector find that most issues arise from having a disparate property base accumulated through circumstance or allocation, rather than planned development. Hence, many problems stem from legacy or historic reasons that have simply not been adequately addressed in the past.

Financial Reporting to the Board

Boards are often inundated with information for their meetings. Reassessing reporting methods can enhance board performance, efficiency and help boards to meet corporate law responsibilities. This article concentrates on some ideas for financial reporting, a particularly challenging area of reporting for many boards. Two key principles are: less is more and top down. Less is more when financial reporting is well formatted and presents clear, concise and relevant information. This will usually be a mixture of numbers, text, graphical representation and detail reported by exception.

Improving Your Board’s Productivity and Performance with Neuroscience

Productive meetings are central to board effectiveness and Director satisfaction. Productivity in a board context is not just about efficiency. It should also be demonstrated through the value add the board delivers. High-performing boards know that unproductive meetings waste time and money and can adversely impact decision-making. In the non-profit sector, unproductive meetings can drain already limited resources. Common actions boards apply to improve productivity in the boardroom include: streamlining agendas, delegating to committees, prioritising issues and modifying board packs (to name a few).

Risky Business: Risk Management and the Not-for-Profit

Changes made by the Australian Charities and Not-for-profits Commission (ACNC) to increase the accountability and transparency of the NFP sector mean charities and other NFPs will now be expected to have greater ownership over their financial investments and risk management strategies. These changes are not a bad thing, in fact quite the contrary. They’ve been established to ensure that the foundations for increasing the scale and scope of Impact Investing in Australia are in place.

Reviewing Your Constitution – Food for Thought

Your constitution (or sometimes referred to as your governing rules or charter) is the document that governs how your Not-for-Profit (NFP) organisation operates. It is a legal document — a contract — and its terms must be complied with at all times. Importance of your constitution Your constitution must comply with the laws that are relevant to your NFP organisation which may be the Corporations Act 2001 (Cth), or the Associations Incorporation Act of your State or Territory.

New Directions in Directing

Nothing destroys the spirit of an organization faster than focusing on people’s weaknesses rather than on their strengths, building on disabilities rather than abilities. The focus must be on strength…the greatest mistake is to try to build on weakness. — Peter Drucker Today’s boardrooms are increasingly governed for weakness. Many directors no longer direct their organisation into strength but monitor and cross-examine their management out of fear and an unchallenged acceptance of a failing model of corporate governance.

Disaster and Crisis: Dilemmas and Challenges for Boards

The world in which our organisations have to operate is growing increasingly complex and turbulent. Organisations in the not-for-profit sector are being buffeted by an ever-increasing range of impacts on their operation and demand for their services. There is an almost endless list of disasters and crises that might occur, but the one thing they have in common is that they force VERY rapid change on organisations. A little preparation can be incredibly valuable for an organisation trying to cope during a disaster or crisis.

What is Your Director Personality?

There is a growing understanding that board behavioural dynamics are a central driver in producing strong organisational outcomes. Every board will demonstrate different behavioural dynamics. These differences are both between boards and within the one board over time. However, boardroom dynamics is often a difficult area for boards to address when they go awry. Four important drivers impact board behavioural dynamics: The specific issues facing the board at the moment; The impact of both the organisational and board cultures; The individual personalities of the chair and the CEO and how their personalities interact; The personalities of the directors and, to a lesser extent, the roles and personalities of the company secretary and members of the senior management team such as the chief financial officer.

Recruiting Board Members – Working with a Nominating Committee

For too long, not-for-profit boards have remained a coy social group, not always adding value to the strategic development and operations of the organisations on whose boards they sit – yet CEOs cannot get their strategies off the ground unless they have a capable board to endorse and support them. It’s all about cause and effect. The problem often results from the way in which directors were recruited in the first place.