Transforming Governance for Future-Ready Organisations - A Case Study of Parkerville Children and Youth Care

In an era where not-for-profits must navigate an increasingly dynamic and complex environment, Parkerville Children and Youth Care (Parkerville) has recognised the imperative to modernise our Governance to remain relevant, effective, and sustainable. This transformation is not simply structural; it is about fostering a culture of innovation and adaptability that permeates every organisational level. Rationalising our governance framework positions Parkerville to better support current initiatives, anticipate future challenges, and honour our history. This proactive approach ensures that we can continue to deliver specialist, targeted, and radically-personalised supports to the more than 13,000 children, young people, and families we serve annually across Western Australia.

The Need for Change

Parkerville has supported children and young people in WA for more than 120 years, and the responsibility to serve as custodians of this legacy is discharged with great care by the Executive and Board leadership. To continue doing so effectively, the driving aim has been to create more effective safeguards for Parkerville’s legacy, equip the organisation to tackle current and future challenges, and nudge systems to produce meaningful, lasting positive impact.

Rationalised Governance to enhance asset protection and diversify financial foundations:

Parkerville’s current single-entity structure - common in the not-for-profit sector - left critical assets, such as the heritage-listed Campus in the Perth Hills (site of the original Parkerville Children’s Home, founded in 1903 as one of Perth’s first orphanages), at legal and financial jeopardy of forced sale or seizure in the event of a single adverse occurrence, with limited capacity to mitigate this risk.

Contemporary Governance to be future ready:

Parkerville’s Rules of Association have limited our ability to effectively leverage assets, skills, and reputation to generate additional revenue streams for long-term financial independence and sustainability. As an association incorporated under WA law, Parkerville has been restricted to operating within the State, relying heavily on short-term government grants to fund operations.

Innovative Governance to overcome structural barriers to service innovation:

We strive to proactively respond to systemic issues like poverty, abuse, and system barriers for the communities that we serve by innovating service models and nudging system changes - deploying internal resources to test new concepts, partnering with philanthropists and systems-change agents, and/or shifting services to prevention/early intervention.

In particular, we have seen the need for a more specialist, trauma-informed educational response to significant community need. Parkerville’s commitment to innovation and early intervention, combined with our place-based philosophy, highlighted the lack of provision in the Perth Hills. With demand consistently outstripping supply, the case for a therapeutic Curriculum and Reengagement in Education (CARE) School became undeniable.

However, the single-entity structure stifled Parkerville’s ability to innovate and integrate new services. Recognising the critical importance of meeting WA Education Department standards while staying true to Parkerville’s mission and values, we sought a means to address compliance whilst better creating the conditions for innovation and expansion.

The Hybrid Governance Model

With these challenges in mind, alongside the drive to preserve Parkerville’s values-driven ethos and respect our positive bias towards innovation and systems change, it was determined that any new structure must:

• Enhance governance and accountability, especially in a complex operating context
• Better protect Parkerville’s assets
• Enable income stream diversification and growth, including prequalification for certain national-level funding opportunities
• Enhance responsiveness to evolving community need
• Meet WA Education Department governance and compliance expectations
• Provide operational flexibility
• Facilitate the development of innovative service offerings
• Respectfully manage Parkerville’s history, while establishing conditions for a more sustainable future.

Restructuring into a hybrid model - combining elements of an incorporated association and a company limited-by-guarantee – facilitates both protection and diversification: better shielding critical assets and legacy through a robust legal framework that minimises the risk of adverse events impacting core assets; and enabling the dedicated space to develop new revenue streams, thereby decreasing dependence on the variability, and not uncommonly, insecurity of government grants.

This better positions Parkerville to challenge service delivery orthodoxy and pursue innovative solutions to seemingly intractable challenges. Our efforts to transform the historic Campus into a CARE School, whilst safeguarding its historical significance and legacy as a home to generations of children, is a powerful example of this drive.

Finally, the new governance structure simplifies operational management, enabling more focused leadership and streamlined decision-making, enhancing Parkerville’s ability to thrive in a dynamic environment.

Key features of the hybrid model include:

1. Four-Tier Governance Model, underpinned by a Carver Model approach: a four-tier model guides the overall operating framework and encompasses both Entities (described below) – delineating responsibilities and accountabilities for each organisational management tier, with level-associated governing documentation. Underpinning and weaving through the Four-Tier structure is the Policy-Based Governance (‘Carver’) Model: four tiers of governing documents that emphasise a Board’s role in setting organisational strategic direction; creating conditions for greater efficiency, accountability, and strategic alignment. Five core ‘Carver’ policies define the organisation’s overarching goals, values, and outcomes; delegate authority to achieve its identified “ends” to the CEO/management team through guidance about resources allocation and use; and clearly delineate between Board governance and CEO management roles respectively.

2. A Two-Entity model:

• Parkerville Children and Youth Care Inc (PC&YC Inc) continues as a not-for-profit incorporated association and an overarching parent organisation and controlling entity. All frontline services remain within PC&YC Inc.
• A not-for-profit company limited-by-guarantee (Parkerville Ltd) is established under the Corporations Act 2001 (Cth) for the sole purpose of supporting and advancing the PC&YC Inc objectives. Critical assets are protected from financial or legal issues but remain available for PC&YC Inc. to use in frontline service delivery. Parkerville Ltd is subject to the simplified Australian Charities and Not-For-Profit Commission’s reporting requirements.
• Both entities share a CEO, maximising operational efficiency and strategic alignment.

Implementation and Outcomes

The Board endorsed the hybrid governance structure in mid-2024, and its implementation has entailed a comprehensive review of Parkerville’s existing structure, and development of detailed transition, communication, and targeted training strategies and plans that centre collaboration, inclusivity, and compliance with all relevant legal and regulatory requirements.

Key Insights

Parkerville’s transformation shows that by thinking differently about governance models, values-driven organisations - particularly those with rich and possibly complex governance and operational legacies to carry and honour - can act with initiative and be informed by best practice to become future-ready and innovate for positive, enduring outcomes. In Parkerville’s case, this meant transforming from a single not-for-profit entity to a hybrid incorporated association/company limited-by-guarantee.

Significant service innovation cannot happen successfully without governance innovation also. Organisations that have high-risk exposure as part of business-as-usual can create stronger protection for critical assets, diversify finances, and strengthen the foundations to enable greater freedom to innovate and respond proactively to community needs.

Conclusion

Strategic innovation in leadership and governance can bridge the past and the future, ensuring organisational resilience and responsiveness to community need. By adopting a hybrid governance model, Parkerville has strategically positioned itself for long-term viability and rapid, targeted responsiveness. As the not-for-profit sector continues to evolve, embracing innovative governance models is not just an option but a necessity for thriving in an ever-changing landscape. Parkerville’s experience illustrates how forward-thinking governance can safeguard legacy, drive innovation, and secure long-term sustainability.

This article was first published in the 2025 Better Boards Conference Magazine.

Further Reading

Transformation Starts at the Top

Achieving Transformative Governance Change

Digital Transformation & Governance - 5 Key Questions for NFP Boards

The Board’s Role in Strategic Transformation

Digital Detours: Unseen Risks on the Road to Transformation

What to Look for During Customer-Centric Transformation