Six Fundamentals of NFP Governance

Learn from not-for-profit (NFP) leaders about the fundamentals of governance. Watch the full Six Fundamentals of NFP Governance series on demand.

AICD NFP sector lead Phil Butler GAICD hosted the Six Fundamentals of NFP Governance series. Episode 1 featured Lucas Patchett, co-founder and CEO of OrangeSky, Verity Hawkins GAICD, CEO of Cancer Council ACT, and Brett Herkt, co-founder and CEO of BoardPro. The episode highlighted key elements of board composition that all NFPs should be aware of.

Hawkins noted the historic emphasis on finding people who ticked off the traditional skills matrix — finance, legal and commercial acumen — but suggested that the modern board should also look to incorporate the lived experience and “softer skills” of its board members.

“Having that beneficiary voice in amongst the governance — and certainly that diversity in terms of ways we tackle problems and work through issues or process information — is really key,” said Hawkins, stressing the benefits to board efficiency and independence.

Not all NFP boards are alike. Patchett shared his own experience with the starting up of OrangeSky — and the consequences of recruiting family and friends to join the board. Eventually, OrangeSky’s scale required a more rigorous governance structure, which culminated in a formal review of their board composition. The board now seeks “fit-for-purpose governance”, stressing what the company needs and letting the board evolve naturally with it over time.

Hawkins agreed with this sentiment, noting that she had experienced “boards with almost far too many people — because [they] were trying to involve everyone”.

Comparing the tech startup experience, Herkt noted the importance of not allowing investors to dilute an organisation’s purpose in its early days. “People love startups, they want to get onto the board and stay there,” he said, advising early-stage leaders to vigilantly monitor the risks of vocal external stakeholders.

The panel shared their thoughts on promoting performance evaluation within boards, noting that a common pitfall of NFP boards was viewing their duties as lesser or easier than those of a commercial organisation.

Hawkins and Patchett discussed striking the balance between a formalised and a more naturalistic approach to establishing accountability — how to give the task the weight it deserves without simultaneously making it feel like a “tick the boxes” process.

Stream the Six Fundamentals of NFP Governance series at https://hubs.ly/Q01yRLV80