Articles

To Pay or Not To Pay? Board Remuneration

Board remuneration is a tricky conundrum for many not-for-profit organisations. Michael Goldsworthy shares a framework that all directors considering this option, need to consider. To pay or not to pay? This is a defining question that increasing numbers of directors of community businesses – or not-for-profits – are thinking about and discussing as boards, as the intensity of risk and responsibility is balanced against the rewards (see the ‘Triple R’ model below).

Liabilities For Board Members Under The Fair Work Act

One of the legacies of the WorkChoices era is a well resourced and bureaucratically motivated workplace “cop on the beat” – the Fair Work Ombudsman. The combination of a regulator with a brief to maintain a tough public profile, the financial resources to back that up and supportive legislation has had the practical result of creating a new range of personal liabilities for directors and board members. Traditionally, an employer was liable for the conduct of its board or senior managers towards its employees, whether the employer was a private company, not for profit association or a government agency.

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.

Political Lobbying and Your Charitable Status

Almost a year to the day after the Word Investments case, the ATO has suffered another loss in the High Court of Australia. This time, in the case of Aid/Watch Incorporated v Commissioner of Taxation, the High Court found that Aid/Watch is a charitable institution despite the fact that its activities are mainly directed at influencing government decisions i.e., lobbying. The High Court’s decision is welcome news to the many not for profit organisations that lobby government as a means of achieving their charitable objectives.

NFP Crisis Management – Well Whadya Know

I was called in recently by a small not for profit CEO to help out with what we lawyers call some ‘crisis management’. The organization was being pursued by Fair Work Australia for some breaches of the new workplace laws. It was apparent to me that the problem arose not because they were trying to rip off their staff but its genesis lay in a simple malaise, ignorance – the CEO simply didn’t know about the particular law that they had breached.

Application of Federal Workplace Laws To Nonprofits

As a result of the referral of power by most States to the Commonwealth over industrial matters as of 1 January 2010, most not for profit organisations are now covered by Federal workplace laws. Until this referral took place, the assumption of many not for profit organisations is likely to have been that they were not covered by the Federal workplace laws because they were not “trading” or “constitutional” corporations.

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.