EVOLVING CHAIR:Investing Skills and Experience in a NFP Board

Chris Franks is a company director with over 14 years experience on large Not for Profit and Government advisory boards and is currently the Chair of Habitat for Humanity Australia where one of the key board discussions is ‘disruptive change’. Franks shares her insights in this week’s Evolving Chair.

Chris Franks is currently the Chair of Habitat for Humanity Australia, Director of NSW Kids & Families, member of Kids & Families Audit & Risk Committee, a member of CUFA International Program Committee and the Clinical Excellence Commission – Medications Safety Expert Advisory Committee.

She has worked as a director on many financial, mutual and Not for Profit boards over the past 15 years including CUA, CUA Health, Credicorp Insurance, Oxfam, and Save the Children NSW and she chaired the ACFID Code of Conduct Committee receiving the inaugural ACFID Award for Outstanding Service to the Aid and Development Sector in 2006.

Franks has extensive executive experience in sales, marketing, consumer research and customer service in both commercial and Not for Profit sectors.

What is your organisation and what is the board structure?

Habitat for Humanity Australia is a company limited by guarantee. The governing board is currently comprised of nine directors of which seven are independent and directly recruited and two directors are nominated by state based Affiliated organisations. All work in the best interests of Habitat for Humanity Australia and are recruited for qualifications, skills and experience that will add value and enable the organisation achieve its strategic plan.

There are currently six Board sub-committees:

•          Finance & Audit
•          Governance & Nominations
•          International Program Advisory Committee
•          Australian Program Advisory Committee
•          Global Village Advisory Committee
•          Fundraising & Marketing Committee

What attracts you to a Not for Profit or for-profit board?

My passion for NFP boards comes from my parents who instilled in me a strong sense of social justice by involving me in their volunteer activities from a young age. Governance fascinated me from the time I undertook my Masters studies and it’s a form of volunteering I find stimulating, interesting and it plays to my strengths.  I’ve now been volunteering in NFP’s for 35 years and a director in various organisations for 15 years so I firmly believe I have a responsibility to invest my skills and experience to support communities worldwide to become stronger and more resilient.

Is gender balance an issue for your board? Do you prioritise it?

The HFHA management team is currently 50 per cent female and our board is 30 per cent female, down from 50 per cent a couple of years ago. We have no hard and fast rules on the balance we seek as long as we have a good representation of both genders on the board, which brings the right balance of skills and experience to generate insightful discussion.

Gender balance is something we prioritise through our organisation and its work because we know that when investing in the families we serve in Australia and the Asia Pacific much greater benefit reaches a family and children when women have control of the household income and savings.

Every time we recruit we undertake a search, which specifically identifies women as well as men who are appropriately qualified, skilled and experienced. A skills matrix helps to identify any gaps in board team, which could enable us to achieve our strategic targets.

We first consider the fit of current external committee members, then we use our own website to advertise, and use directors networks to source potential candidates who are male and female. We then undertake a positive search for women by consulting our Habitat Women group, which has many professional members, and we utilise the Women on Boards recruitment service which has provided us with highly qualified and board ready candidates too.

At the end of the day we aim for a balanced short list from which to choose the best person for the role with best fit to the board team.

What is your board’s ultimate goal?

Our vision is a world where everyone has a decent place to live and our goal is to bring individuals and partner organisations together to build, repair or renovate homes and communities.

As part of a world-wide organisation working in 88 countries, Habitat for Humanity Australia is one of the larger partners however in Australian terms we are still a small organisation so our goal is to grow. We plan to be a medium sized agency delivering international aid and development programs efficiently in the Asia Pacific region supported by a strong and sustainable income program.

We will always listen to and work alongside communities to implement development and disaster resilience and recovery programs that suit local environments and cultures. In addition we will increase the number and size of our partnerships both in overseas and in Australia and deliver a strong Australian shelter program through local partners.

What are the key sector issues that are being discussed at board level?

The key issue at present is disruptive change – change itself is changing and creating winners and losers – its scale is larger, its speed faster and it is more surprising in impacts and when these three are combined then disruption is the result. To date its being experienced by the corporate sector – record companies, newspapers, telephone companies, bookstores facing fundamental challenges to their business models and some finding disruptive change so great they have disappeared. For example Kodak which invented the digital camera but did not develop it further or consider its potential impact on film processing which has now almost disappeared.

Humanity is overusing the world’s resources, inequality is increasing and this change is accelerating us towards greater economic and social disruption on a global scale. So rather than getting closer to achieving our humanitarian goals we are seeing greater gaps between what is realistic to achieve and what we hope to achieve.

International agencies like Habitat for Humanity Australia are also seeing our role as intermediators between donors and recipients being threatened by technology, Our ability to influence political change is reducing and political pressure placed on civil society is increasing and interferes with the ability to pursue our missions.

How will we manage these disruptions that threaten our current way of working? We are unsure so the board is listening, learning, collaborating and will be discussing strategies that will enable us to harness the opportunities and position ourselves to exploit the disruption to benefit our mission.

We know that time is short so its part of every discussion on the future focus of funding, program direction, social media, advocacy, climate change response and more.

Does your board believe collaboration between organisations within your area is important? Why?

Absolutely – this is a sector that has been cooperative and collaborative for many years and yet retains its competitiveness too.

International aid and development agencies work together in humanitarian disasters where each agency plays to its strengths and takes responsibility for delivery of one aspect of community support. For example Oxfam’s expertise is in delivery of water and sanitation while Habitat shares delivery of shelter solutions and repairs with several other larger agencies.

Agencies also collaborate in our program delivery, and avoid implementation of similar programs in the same geographical location to avoid duplication of expenditure and waste of resources.

We deliver programs that are multifaceted so HFHA will partner with a health or microfinance skilled agency to deliver a program on our behalf or vice versa. We also utilise other NFP and corporate agencies to deliver training or technical programs which is part of our program commitment and contracting another agency with the strength makes more sense than hiring new staff – and we are not alone, the majority of agencies work cooperatively at a program level while competing at a fundraising level as mentioned.

Collaboration is vital as the range of organisations in the aid and development sector are many and varied in size, mission and area of activity and there is awareness that accidental or deliberate transgressions of one international aid agency if reported in the media have the potential to impact the reputation of all agencies equally.

So collaborating with our peak body the Australian Council for International Development (ACFID) and other agencies to advocate and support sector initiatives is essential. Larger organisations provide support and assist those with smaller staffs and fewer resources to assist in avoiding issues arising from lack of knowledge, or poor systems and processes.

We are strong supporters of the ACFID world class Code of Conduct, an example of collaboration that created a strong compliance framework which leads the world and a secretariat that regularly checks compliance across the sector. (I was an independent Chair of the Code of Conduct for some years prior to joining the Habitat board)

The much-discussed back office collaboration has yet to be taken up, to my knowledge, although this happens to some degree between small domestic charities.

Do you have any advice around recruitment?

When recruiting a CEO, using a specialist recruiter is essential to maximise the number and quality of potential candidates to consider. No matter the skills, experience and expertise of the board in recruitment, a specialist has much better and fresher links into the target market and will identify people who may be thinking of moving or may be tempted to consider moving earlier to the right organisation at the right time.

Finding the right recruiter is of course essential. Find one that specialises in the sector, as their knowledge of and database of potential candidates will be better matched. Some have better or longer experience in the sector and some have larger teams – only interviews, reference checking and research on recent assignments will lead to the one that suits your organisation best.

Cost of recruitment agencies often appears a significant barrier to a small organisation with board frequently questioning whether real value can be delivered by a recruiter. The short answer is it can and if the board wishes to see a top class short list and minimise workload on the board then this is a must. The time invested by the board, lost opportunity and reduced income resulting from a poor appointment can impact an organisation over 2 years – a far higher and more significant cost.

Recruiting directors is different altogether as recruiters may have plenty of suggestions but fail to match candidates to the values and team dynamics in a NFP board. As mentioned above we favour identifying skills and experience upfront using a matrix of current board skills to help identify gaps that need to be filled in new directors. A well functioning Board and Chair will be constantly alert to the identification of potential candidates within their networks and work to engage them on committee projects so a view of their skills and commitment to the cause can be assessed well before a board vacancy occurs.

In a NFP it bears noting that director recruitment is not a job for the CEO who is likely to search for different skills, perhaps people easy to work with or influence with a resulting change to the character of the board and its likelihood of challenging and testing the CEO on key decisions and strategy.

Critical is to confirm motivation and likely commitment of potential candidates – is it your cause that attracts or are they keen to start a board career, take a step up from a smaller organisation, network with directors who may recommend them for roles and if so they are unlikely to be on your board for long. Be aware of attitudes some may feel they can ‘save’ a small organisation that’s already operating well, those who see small budgets as trivial and those who don’t appreciate the complexity of NFP goals and operations compared to a straightforward profit objective.  

Do you have any advice around mergers?

My advice comes from the commercial board I have been involved with and multiple mergers over many years. The first critical point is to identify the imperative driving need to change within both organisations otherwise it is tough to get the discussion started at the board table. Once on the table then next step is for both Chairs and both CEO’s to meet and be in agreement on the broad opportunities and advantages for each organisation and its beneficiaries.

Then the tough discussions must start – which is the likely senior and junior partner? Which Chair will go through? Which CEO will lead the new organisation? How will the new board be created i.e. how many directors from each organisation and what skills are required? If these cannot be agreed then its almost impossible to achieve a merger, so consider whether you will be wasting time on further discussions.

Once the points above have been agreed in principle then the Chairs and CEOs must be willing to start the discussion on a merger with their respective boards and pursue the long and complex due diligence and legal process.

Do you have any advice on board members raising money?

I don’t subscribe to the ‘Give, Get or Get off” philosophy. Board members are recruited to a multi skilled team with a variety of skills and experience to develop the organisation and achieve strategic objectives – fundraising is just one of those.

However that said I do believe that all directors must help grow an organisation within their capabilities and networks. Some can give a lot financially and therefore should give if they believe in the cause and some can give little – few are unable to give $10 a month to a regular giving program which makes a huge difference.

All can add the organisation into their will to leave a future gift, some can take a table at a gala dinner or make a major donation to a specific project and some can volunteer at the coal face. Some can give through expanding networks, introducing the CEO or FR director to key contacts in a position to themselves help the organisation with funds, gifts in kind, sponsorship or volunteering.

The Chair is pivotal in encouraging directors to raise money in a way that is comfortable and within their means. The CEO is pivotal in ensuring that directors know how the organisation’s fundraising works and how systems support their direct giving or introductions.

Do you have any advice around the Board’s relationship with the Chief Executive Officer?

A healthy Board CEO relationship is the best indicator of organisational success and as with any relationship it requires shared trust, mutual respect, clear communication, well-defined expectations, a lot of listening and a little talking and negotiating. As the CEO runs the day-to-day business of the organisation the Chair and the board need to do most of the listening.

Board CEO relationships demand open and respectful communication and collaboration between partners to achieve their shared goals. Its vital that the board is clear on their objectives, agree the organisation’s goals with the CEO and they also agree their respective roles in achieving them. This can only be achieved by spending time to get to know each other both in formal board meetings and at informal get togethers too.

Transparency is essential as it builds trust and is generated by regular, clear CEO reports direct to the Board and via the Chair which detail not only strategic achievements but also the less than ideal outcomes that characterise the normal path of an organisation. This clarity enables the board to be available to offer their advice, guidance and support in challenging times.

The board can provide thoughtful guidance and advice on how to most effectively move strategy from a plan to a practical implementation and to help assess new initiatives and proposals. It’s their role to ask probing and thought-provoking questions that test and challenge ideas and proposals to ensure the organisation will benefit in the long run. To do this effectively the board must be measured and well facilitated in their approach and the CEO must be expecting robust evaluation and feedback and flexible enough to take up that which is of value.  

At the risk of teaching others to suck eggs – this relationship is pivotal and has the potential to make or break an organisation so if the CEO/board relationship has soured then the only option is for one or the other to leave quickly and ideally without damaging the organisation.