Strategy – is it really that difficult?
Partner, Mills Oakley
Vera heads up the Sydney Not-For-Profit, Human Rights & Social Impact team at Mills Oakley. Acting for numerous charities, religious and not-for-profit organisations, Vera has 30 years' experience in the legal profession. In her work, Vera is well recognised for her expertise in assisting clients with governance and fundraising issues, restructuring and mergers and regularly advises on constitutions and ACNC/ATO endorsements. Vera has written several academic works, including a chapter within ‘Charity Law’ (2012, 2016 and 2018) published by Thompson Reuters.
Vera sits on numerous charity boards, associations and committees including the ACNC Professional User Group; the Community and Consumer Consultative Group, Cemeteries and Crematoria NSW; Everyday Justice; and Catholic Care, Diocese of Parramatta.
It is a given that strategic vision is vital to good governance and is directly correlated with growing budgets for not-for-profits (NFPs). Nevertheless, despite widespread sector discussion on the importance of strategy, boards are still having difficulty prioritising the long-term strategic needs of an organisation in the face of its short-term operational needs. There has been no shortage of distractions from long-term strategic planning in recent history. But with one in 100-year events seemingly happening multiple times a year, organisations should not delay prioritising long-term strategic planning. Only 24% of survey respondents in the Australian Institute of Company Directors, 2021 NFP Governance and Performance Study rated “clarifying strategic direction” in their top priorities. Meanwhile, “responding to changes in operating environments” was a top priority for 38% of survey respondents. This demonstrates that boards are reactionary and reluctant to drive strategy.
Many directors understand that formulating a strategy is important from a governance perspective but do not appreciate the legal mandate to do so. Others do prioritise to some extent the need to create a strategic plan but then struggle with remaining conscious of it when participating in board meetings.
This presentation will explore the legal obligation to prioritise strategy with reference to directors’ duties. It will then outline practical solutions that can be used to weave strategic thinking into all boardroom decision making, such as:
- (a) incorporating strategy as an objective and mandate in governance documents, such as in the constitution and by-laws;
- (b) influencing the board’s strategic culture through a strategy focused board induction package and board charter;
- (c) permeating a strategic culture down to board committees and senior management through policies and procedures; and
- (d) requiring board papers and minutes of meeting to explain why a decision should be made or was made with reference to the organisation’s strategic goals.
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