NFP directors are working harder than ever, but is that a good thing?
31 July 2019 at 4:16 pm
NFP directors are spending more days working on a single charity than ever before, posing a risk of management burn-out, new research shows.
The Australian Institute of Company Directors’ (AICD) 10th annual governance study found 55 per cent of directors surveyed spent one to five days a month on their NFP role, while 23 per cent spent more than five days a month on a single NFP.
Rising governance expectations, community trust challenges for NFPs, the introduction of the National Disability Insurance Scheme, growing financial pressures, and changes in organisation complexity and regulation, were some of the reasons given for the increased workload.
Phil Butler, AICD NFP sector leader, told Pro Bono News the more time directors spent on these areas meant less time spent on strategic planning, possibly to the detriment of the organisation.
“That came out very strongly in the study where directors were saying and recognising that they need to spend more time on strategy,” Butler said.
Despite a bigger workload, the report also found there had been little change in the amount board members and directors of NFPs were paid.
“Some directors believe greater debate is needed on whether NFPs should pay board fees or increase current remuneration rates,” the report said.
While Butler said the current model of NFP governance was sustainable, organisations needed to manage their time more efficiently to make sure it stayed that way.
“How can they make better use of technology? Can they do more in terms of zoom or video conferencing for meetings? Can we use committees better to lessen the workload?” he said.
“They can also do more to tap into younger directors who may be executives in their organisations, and are wanting to be involved on the boards of not for profits.”
The report pointed to the continued challenge of board diversity, with 77 per cent of board members over the age of 50 and only five per cent under the age of 40.
Directors reported that some boards found it hard to recruit younger members, and a lack of stakeholder representatives on boards remained an issue.
Financial struggles and less interest in mergers were also identified as challenges for boards.
But Butler said it wasn’t all bad news. The quality of governance has continued to build year on year thanks to the increased experience and skill of directors.
“We’ve got very experienced directors on the boards of our not for profits who have experience in not only leading NFP organisations, but for-profit organisations too,” he said.
He said directors were more confident focusing on purpose-driven outcomes than they were five years ago, and organisations were rated as being highly effective in their mission.
“We’re very encouraged by the findings and we look forward to working closely with the sector as their governance structures continue to evolve,” he said.