Getting the Right Board… - PowerPoint Presentation

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Getting the Right Board… - PPT Presentation

and Getting the Board Right Necessities amp Unnecessary Distractions of NFP Governance QAILS Conference 26 May 2015 John Peacock General Manager Associations Forum Disclaimer This is practical advice based on ID: 526664

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Slide1

Getting the Right Board…and Getting the Board Right“Necessities & Unnecessary Distractions of NFP Governance”

QAILS Conference26 May 2015John Peacock, General Manager, Associations ForumDisclaimer: This is practical advice based on our work with associations and charities. The contents of this presentation do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. You should seek specialist advice in relation to any particular matters you or your organisation may have.

About Associations ForumCommercial entity assisting associations in Australasia & Asia500 member organisations: professions, industries, charities

AF National Conference largest association event in Southern Hemisphere Services similar to an associationGovernance and constitution reviewsPolicy and advocacyFree member meetings and eventsNetworking and international connectionsMember advice helpline Journal, Enews, resources Benchmarking surveys

e.g.

salaries, Boards, finances

Consulting and advice on boards, governance and planning

QAILS works towards the following objectivesTo promote the development of community legal centres (GOOD BOARDS NEEDED)

To enhance communication and cooperation between community legal centres (LEARN ABOUT OTHER BOARDS & CONSTITUTIONS)To secure and develop funding for community legal centresTo represent the interests and opinions of members.© Associations Forum 2015 Slide4

Facilitator’s Career as a CEO and Volunteer Director20’s – Commerce degree, large corporates; Board of professional association30’s – Association manager and CEO of small association; Board of professional association and Chair of local community association

40’s – Established Associations Forum: providing education and advice to associations50’s – Consolidation of Associations Forum and training of associations in Australasia and Asia© Associations Forum 2015 Slide5

TerminologyGoverning Document

Constitution, Rules, Memorandum and Articles of AssociationGoverning BodyBoard, Trustees, Council, Committee, Management CommitteeIndividuals on Governing Body

Directors

, Trustees, Councillors,

Committee MemberSenior Staff Person

Chief Executive Officer (CEO)

Executive Officer (EO)

Executive Director

(ED)

CLC Issues Community Legal Centres are NFP associations but not ones that exist to serve membersMembers may be a random group, presumably interested in access to justiceIs it good or bad Boards of Directors may be less emotionally connected to the cause of CLC’s than (EG) charity parents of a child living with an illness

Directors should play a role in raising fundsYour Board should not be a distraction for your CLC© Associations Forum 2015 Slide7

What is corporate governance?“Corporate governance is the system by which companies are directed and controlledBoards of Directors are responsible for the governance of their companies(Members) role in governance is to appoint the Directors and the Auditors and to satisfy themselves that an appropriate governance structure is in place.” - Cadbury Report (UK) 1991

Association’s key documentsLegislation – plus explanation of what it means to your association and peopleConstitution – voted upon and changed by Members at General MeetingBy-Laws/Regulations (optional) – can be changed by the Board

Governance Charter – can be changed by the BoardStatements of Purpose – Mission cascades into Goals then ActivitiesPlan – stating what/who/when and presented in grid formatBudget – linked to Plan; drafted by CEO; approved by BoardList of Directors and Office Bearers – how long on Board and “day job”Staff org chart – changed by CEO; will staff structure achieve Plan?Minutes

– Board meetings, committee meetings and General Meetings

Annual

Report – records achievements, challenges; acknowledges effortsAudited financial report – plus 5 years to 10 years financial history Slide10

Typical annual Board cycle© Associations Forum 2015 Slide11

Associations Forum Board Survey © Associations Forum 2015

20082009201020112012

2013

2014

Number

Meetings

Face to face

7.0

6.4

6.3

5.9

5.6

Number

Meetings

Total

9.4

7.4

Average

Board Size

11.2

11.6

9.6

10.0

11.2

10.1

9.5

Ideal

Board Size

N/A

8.4

8.0

8.6

8.5

8.4

8.1Slide12

Ways to attract new directorsEfficient structures that maximise the use of a director’s time Clear expectations of level of commitment expectedClear organisation Plan and Board practicesGood communication and reports that impress the candidateDirectors publicly acknowledged and thanked© Associations Forum 2015 Slide13

The role of the BoardResponsible to the members who are the stakeholders (less so for CLCs)Determines Mission and Purposes (Objects)Develops strategic plan Financial oversight and consider riskLegal accountability Assigns responsibilities e.g. committees© Associations Forum 2015 Slide14

Getting the Right CLC BoardAs members should appoint the Board and hence the Board is accountable to the members – get wise & aware membersGetting the right Board includes processes for recruitment, induction and effectivenessHave 6 Directors = 3 people/year x 2 year termHave a rule that the President can only stay for (say) 4 yearsHave a culture that the Directors can only stay for up to 10 years – and if not contributing, sooner© Associations Forum 2015 Slide15

Getting the CLC Board RightA culture of mutual respect and openness that encourages constructive debateActive debate from a Board with a range of experience, expertise, age and gender Delegates management to staff Experienced and effective chair who encourages debate and helps resolve differencesEfficient Board structure and processes including committees, Board papers and information flow

Board/staff relationship RESPONSIBILITY BOARDSTAFF

GovernanceDecides “what” Decides “how”Personnel Evaluates CEOHires and manages staffPolicy

Sets policies

Implements policiesLegal and financeEnsures compliance and oversight, approves budget

Develops budget

, manages and reports

Strategy

Plans and monitors

Plans

, implements and reports

Programmes

Approves

Develops, proposes

and implements

Representation

Represents to other organisations

Represents

as delegated by Board

Things Boards must doHave good long-term Plans

Have clear, informative agendas for Board meetingsBe clear on decisions, especially if internal disagreementHave Minutes that explain and record decisions – but are not verbatimWork to improve Board performance and how it operatesKeep all Directors involved in significant decisions – not have an “inner Board” and an “outer Board”Be well chaired by person with skills and respectHave governance training every year

Unnecessary DistractionsFew members or disinterested membersOverly interested members!

Disorganised governance processesNot enough quality Board candidatesBoard with the wrong motivations that interferesPoor chairDISTRACTIONS BEYOND GOVERNANCELack of moneySubstandard management© Associations Forum 2015 Slide19

Moving from “management” to “governance” When sufficient and regular income, staff should be employedPaying for administration is the first, easier step which needs to be managed by the BoardHiring an association professional e.g. CEO who will manage is a harder step

When management level staff are employed, the Board culture has to change from management to governance Directors need avoid overwork and burnout – their role is oversight and not to do everythingAssociations must have association and governance training © Associations Forum 2015 Slide20

How governance differs from managementMEMBERS

BOARD OF DIRECTORSCEO/MANAGEMENTNumberBetween 2 and 1,000,0008 members (including Chair)1 CEO and various staffWhy be involvedMost members only join to receive services = inactiveActively volunteer up to 1 day per month (more if Chair)Paid employee to implement Plan and achieve BudgetRoleClients & stakeholders

Governance

Management

Money flowMembers pay annual feesDirectors usually not paidCEO and staff are paidAccount-able?No. Members

can join if they wish.

Yes. Members vote on

who will be on the Board

Yes. Board employs

CEO and can dismiss CEO

Boards must ensure PlansBoards should focus on the Mission and strategic objectivesWhen an association employs management, Boards should allow management to achieve the PlanWhen you know your Plan and Balance Sheet, a Budget can be developed

Association plans can be strategic plus operationalStrategy is balancing what is desirable and possibleRefer to plans at every Board meeting – Board monitorsPlans need ownership by Board and CEO - other volunteers and staff must see where they fit in to the Plan and Budget© Associations Forum 2015 Slide22

Once Mission and Goals are decided,move to details in grid formatGOAL

ACTIVITYRESPONSIBLETIMINGNOTEPRIORITY1 Educate1.1 ConferenceEvent MgrMay ‘16MeasB11.2 On line learning ExternalJul ‘16

2 Inform

2.1 NewsletterComms MgrQtrlyMeas

2.2 Website

Comms Mgr

Ongoing

Meas

Advocate

3.1 Develop

policies

Board

Dec

‘16

3.2 Meet Minister

President

Jan ‘16

4 Expansion

4.1 Trade mission

CEO

Aug

‘16

Meas

4.2 Economic

analysis

External

Nov ‘16

5 Governance

5.1 New database

CEO

Jul

‘16

5.2 Review Constit’n

Sub C’tee

May ‘16

5.3 Govern training

CEO

Jan ‘16

Board mattersBoard agendaBoard decisionsBoard minutesOffice BearersChairing meetingsCommitteesFinances and budgets

Improving Board performanceBoards should be committed to a process of Board and meeting effectiveness evaluationThe process should be established before a problem occursThis process, often externally facilitated, occurs outside regular Board business

Director assessment is challenging in a voluntary environment, but can be tackled indirectly © Associations Forum 2015 Slide25

ConclusionCLCs are associations that are not there to help members, so consider who should be membersMembers change the Constitution and vote for Board/Committee, so have Processes that get suitable candidates into the election

CLC constitutions could be improvedOnce a Board in place with staff, plan and budget, Board should not micromanage and be vigilantBest practice processes for Plans, agenda, minutes and so forth need to be followedThen CLCs will give quality legal advice to the needy © Associations Forum 2015 Slide26

Levels of AF MembershipJournal and eNewsFree events and member event discounts

Benchmarking surveysPolicy and advocacyMember advice helplineLocal and international networks Board and staff training (Silver and Gold)Governance and constitution review (Silver and Gold)Financial benchmarking (Gold)Strategic planning discount (Gold)

Our conference & magazineSlide28

Thank you!John Peacock, General Manager, Associations Forum Pty Ltd

jpeacock@nfp.net.au 02 9904 8200 Associations Forum National Conference 14 - 15 July 2015 Adelaide Convention Centre, © Associations Forum 2015