Governance and Nonprofit Boards

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Governance and Nonprofit Boards

• Australian Meals on Wheels National Conference
  2005

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In Australia there are approximately.

• 700,000 nonprofit organisations
• 140,000 incorporated nonprofits
• 120,000 incorporated associations
• 9000 companies limited by guarantee
• 3000 cooperatives
• 8000 others

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The Nonprofit Board

• has the highest level of accountability because
  of its unique ownership and stakeholder position.
• The Board has formal, legal ownership of the
  organisation and the moral responsibility to act
  as a steward of the organisations mission,
  policies and resources

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GOVERNANCE the work of the Board

• MANAGEMENT
• the work of the Executive Officer and staff

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GOVERNANCE..

• is how a board goes about exercising its
  authority over an organisation
• authorised by the State and the organisations
  supporters

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The Board governs the life of the organisation
by..

• sustaining the mission direction
• ensuring the necessary resources
• developing guiding principles
• retaining ultimate authority
• being accountable to the public trust, the
  organisations members and supporters

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The Executive Officer is authorised by the Board
to manage the organisation by

• supporting the Board with strategic information,
  ideas and reports
• planning, coordinating, implementing the programs
  and policies established by the Board
• retaining day-to-day authority

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A board is managing more when...

• Board agendas ask boards to make decisions about
  
• short-term administration of programs and
  services,
• physical resources
• finances and
• personnel

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A board is governing more when ...

• The board deliberates on broader issues that may
  impact on the organisations mission and takes
  action on setting explicit policies to guide the
  organisation into the future

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• Management more that governance creates an
  immediate sense of accomplishment and
  gratification, in part because managerial issues
  are frequently more amenable to decisions and
  actions.
• Matters of strategy and policy, by comparison
  often require extended discussions, in-depth
  analyses and a considerable knowledge of the
  organisations context - conditions not easily
  fulfilled by a board that meets intermittently
  and relatively briefly
• Richard Chait et al. Improving the
  Performance of Governing Boards

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Responsibilities of a Nonprofit Board

• Determine the organisations mission purposes
• Ensure that the board operates efficiently
• Ensure legal ethical integrity maintain
  accountability
• Select, support assess the Executive Officer
• Ensure effective planning
• Ensure adequate resources

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Responsibilities of a Nonprofit Board (cont)

• Have effective oversight of financial resources
• Determine, strengthen and monitor services
• Enhance the organisations public image
• Recruit orient new board members and assess the
  Boards performance
• Ensure the adoption of a sound risk management
  program

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The Role of the Board Chair

• Facilitate good board meetings
• Establish a good working relationship with the
  CEO
• Co-ordinate the evaluation of the board and the
  CEO
• Facilitate communication among board members and
  with the CEO
• Ensure effective recruitment, orientation and
  development of board members
• Recognise the contributions of board members and
  the CEO

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The role of the CEO

• Be the link between the board and staff
• Keep board members informed of shifts in the
  environment and potential opportunities
• Establish an effective working relationship with
  the board chair
• Oversee design, marketing and delivery of
  products and services
• Effectively manage all HR, financial, tax and
  risk management aspects of the organisation

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The CEO and Board Chair relationship

• Must be based on mutual trust and respect
• Should be a productive relationship that does not
  leave out the rest of the board
• Needs regular, informal and effective lines of
  communication
• Works best when role definition is explicit and
  each is clear about the others role