Governance

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.

Not for Profit, Not for Fraud

We trust our staff. We are a values based organisation. We don’t have any fraud here. Let’s clear this up once and for all. It is likely that you do have some form of fraud or corruption happening in your organisation; you just don’t know about it yet. More often than not some of your staff will be either involved, or at the very least, aware of its existence. Any questions?

Practical Steps to Good Governance and Risk Management

For us tragic Essendon Football Club supporters, good governance is something that cannot be ignored. Governance and risk management go hand-in-hand, and provide a framework to ensure that an organisation meets its legal obligations, manages its risks and ensures appropriate accountability throughout the organisation. Some practical steps which a Board might consider as part of this framework include: Board Charter A Charter can set out the duties, responsibilities and expectations of the Board, the Chief Executive and the executive staff of an organisation.

Enabling Better Decisions at the Board Table

High performing boards make decisions At the recent Better Boards Conference, Nonie Wales and Morri Young of Matrix on Board gave a presentation on ‘Board Business: Sharing the load’. They defined a high performing board as one that: is well lead makes decisions has good information all members participate in board business Whilst other defining characteristics of a high performing board could be added to this list, few would disagree with what they outlined.

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.