NFP Directors More Actively Engaged in Culture

Not-for-profit directors in 2018 are more actively engaged in monitoring, measuring and leading culture in their organisations, according to new survey findings.

The Australian Institute of Company Directors’ (AICD) latest NFP Governance and Performance Study revealed NFP leaders were increasingly focused on organisational culture.

AICD surveyed 2,022 NFP directors and executives across Australia, and 75 per cent said they were actively engaged in monitoring, measuring and leading culture in 2018.

This compared favourably to 2017, when only 43 per cent of AICD survey respondents said their culture was monitored well, while just a third said their boards actively oversaw culture in the organisation.

AICD managing director and CEO Angus Armour said the pursuit of improved workplace cultures was seen as a way to address declining trust in NFPs.

“It’s clear that despite the challenges in measuring culture, directors are focused on establishing and maintaining a culture aligned to their mission and stakeholder expectations,” Armour said.

“This year’s findings show that the directors of NFPs are engaged, committed, and have strong foundations in place to meet the governance demands and expectations ahead.”

The survey found there were a number of methods used by NFP boards to measure culture, including staff surveys (45 per cent), staff turnover and dismissal data (41 per cent) and client surveys (40 per cent).

NFP directors were much more involved in formally monitoring #culture in 2018, compared to 2017. Directors reported that it is difficult to effectively measure and monitor than other parts of the business – @Pbutlernfp #NFPAu pic.twitter.com/1kAm7r5iGq

— AICD (@AICDirectors) July 30, 2018

Innovation was another prominent focus of the study. Armour said the survey highlighted that greater clarity was needed about the role boards played in driving innovation to protect NFPs from emerging threats.

“The pressure to innovate is reflected in this study, with 45 per cent of respondents agreeing their NFP did not allocate sufficient resources to innovation and 44 per cent saying their NFP was less innovative than needed,” he said.

“However it’s interesting that directors appear split on the board’s role in innovation, with roughly half seeing it as the role of the CEO, while others see the board as driving innovation via the strategic plan or by generating ideas for management.

“Not all boards may see themselves as innovators, but given the growing awareness of the board’s role in setting culture, the board must play a role in facilitating innovation within a business.”