Governance - Your Questions Answered

Effective governance for Not for Profit organisations has occupied much time on our Forum in recent weeks with the help of the author of The Book of the Board, David Fishel who has answered our readers questions.

If you haven’t had a chance to check out the Forum here are some of the questions being discussed and David’s replies.

Question:
How do I get the Board to approach strategic planning without swamping them? We have a handbook for volunteer treasurers already. Are roles of the other executives (chair, secretary) covered in the book?

David’s reply:
I’d suggest you map out (visually) a proposed planning process, and allow the board to discuss which elements they are most concerned with being directly involved in. They may not want or need to generate all the strategic options or strategies, if there are staff to do that; but the board will almost certainly be involved in confirming the mission and the top-level goals, and with formally adopting the Plan at the end of the process.

They may want to have an early discussion about future directions, and make some choices, but leave it to staff to work through the detail.

The Book of the Board has a chapter on strategic planning and the board’s role in it, suggesting two possible levels of involvement. The Book also has a chapter on the role of the Chair, covers the Secretary role very briefly, and has model duty statements for each of the board office holders.

Question:
How would you suggest tackling getting a Board to deal with reviewing their own performance and accountability? We have recently become incorporated and have no history of reviews in the past. The functioning of the Board as a cohesive and effective unit has been identified in our Risk Register (recently drawn up) but so far no one has suggested that an effective way of ensuring this would be by review.

David’s reply:
First, I would raise the possibility for a review or self-evaluation of the board outside the board meeting, to ensure there are one or two people willing to support such a suggestion. Secondly, there are publications which deal with this specific topic. The Book of the Board has a chapter on monitoring and improving board performance, but there’s also ‘Boardsource’ publications available via NSW-based Management & Governance.

Usually, the recommended process involves board members individually completing a survey form on different aspects of the board’s performance (which could include interaction between board members, how well we work as a team, as well as more ‘formal’ aspects of agenda structure, compliance issues etc.).

Someone (this can be an independent facilitator, or a respected board member) can then summarise these individual assessments as a basis for discussion. With 360o evaluation you might also ask for CEO and staff views of the board’s performance, and key stakeholders’ views too – but this requires a degree of confidence and openness to criticism.

Questions:
What protocols and procedures need to be upheld?
Who works with whom in developing creating and writing Constitution changes?
Are there any guidelines for Constitution structure, content and format?
What needs to be in a Constitution?

David’s reply:
Both for non-profit limited companies and for incorporated associations it’s the members who ‘control’ the constitution, but within the limitations of the appropriate regulatory body.

So, wherever the idea for constitutional change comes from, it would have to be routed through special meetings of the membership of the organisation.

It would not be unusual for discussion of amendment to the constitution to happen predominantly in board meetings – but the results of such debate then has to be taken to the membership – the current constitution may stipulate how this has to be done, i.e. procedures for Extraordinary or Special General Meetings, and the majority required to alter the constitution.

Any suggested or draft changes, however, may need to be cleared with the ATO, ASIC or other authorities.

If you’re an incorporated association you could buy the Incorporated Associations Manual from Caxton Legal Centre 07 3254 1811, which is a thorough guide to the process of establishing an Association. Although it has a Queensland focus I’m not aware of similar publications elsewhere. There’s a list of what has to be in the ‘Rules’ or constitution.

Pro Bono Australia would like to thank David Fishel for his time in taking part in our On-Line Forum.