If you have Structure & Process right you are off to a good start. Most NFPs (Not For Profit Organisations) are lacking in Structure, Process and knowledge of their respective rights & responsibilities.
Good Structure leads (hopefully) to good knowledge of Process.
That then leads to good compliance and lessened legal exposure.
Straight behind that is the directors, Management, Committees and their members knowing the limitations of their roles and what to do (properly) if they see an issue outside their Governance confines.
Soon after that, efficiencies start arriving, generally people get to spend more time (because they have more time) doing what it is they personally are required to do.
Once the efficiencies arrive then the natural progression if all the planets align as they are very much supposed to, is vision and strategy. That probably should be the first reason for being but at this point, its a review thing...are we all here for these reasons, what additional reasons are their now?
When all these boxes are ticked, we have purpose, structure, process, strategy all neatly sorted and widely well known and accepted then without noticing one thing quietly sneaks in and makes itself at home and will remain as long as everyone remains cognisant of structure & process and new entries are orientated properly... Culture.
When your NFP hits this point you probably need to know you will not turn rivers into wine but you will see a vast improvement in what the organisation can do with what limited resources it has.
The greatest benefit is, people stop wrongly treading on other peoples toes.
For example, got a problem with a committee outcome, a committee you're on?
What's your first port of call.
The Chair of the Committee. Not staff, not other committee members, you don't rally an army.
Got a staff related issue or staff member related issue?
What's your first port of call?
Not the staff member, not other directors.
First port of call is always the Chairman of the Board who will tale to the CEO.
The most important relationship in an organisation is between the Chairman of the Board and the CEO.
Managing staff is the job of the CEO - Do not interfere or you have crossed the governance line.
Chairman listens to your concerns, addresses it with the CEO.
They, via the Chairman get back to you with the answers. If you're still not happy you advise the Chairman you wish to bring it up at a Board meeting & have all directors briefed out of session prior to the meeting (by the Chairman or by the Chairman/CEO)
Directors DO NOT GET INVOLVED WITH STAFF.
That's micro managing and is not a Directors role
Have problem with a committee or sub-committee's work or pathway?
Who's your first port of call?
Ideally the Chairman of the board if you're a Director.
If you're a lay member, the Chairman.
The Chairman addresses the concerns not with one of the committee members but with the Chair of the committee in question.
If a Committee makes a decision involving staff, he directive goes to CEO either via the board's CEO or via the Committee's Chair & the Board's Chairman. No committee member should be approaching staff.
That's micro managing, a breach of good corporate governance and is definitely wrongful interference.
If you have a board you need a board charter. What you can and can't do, what your role is.
You also need a Code of Conduct. I point to the AICD's Code of Conduct for it's members as a perfect template.
Committees, should have a Committee Charter set by whichever part of the organisation it reports to.
It maybe a committee reporting to the board, it maybe a Sub Committee reporting to a Committee & the board. End of the day, the board must approve of the Code of Conduct and the Board MUST approve of all Board and committee charters. The board is where the buck stops and a committee cannot & must not decide for itself what it does, when & how for itself. If that happens, you have an autonomous "shadow board" whether that is the intention or not.
Sounds complex, but once these simple boxes are ticked, compliance is raised and running by the new rules & understandings becomes easier.
Be aware though, you need to check with people within the structure to confirm if they do know what the structure is, what the respective roles are and what their rules of engagement & limitations are. If more than one person has a differing view of who's supposed to do what & how you have an unpinned grenade.
Get everyone and I mean everyone on the same page.
This sits in within the aims of Fiduciary Duty and the Reasonable Person's Test.
If some are devoutly resisting the change to proper structure, process and compliance chances are they'll get with the programme or eventually leave. The board has many roles, but ensuring compliance is just one. They will eventually have to deal with opponents of good corporate governance and decent compliance.
Once bedded, things run easier and smoother and factions or power groups don't get a look in.
Everyone including (if not especially) your members/shareholders.
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Further Reading (Perhaps for many, Must Read)
https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/public-sector/ca-en-public-sector-effective-npo-board.pdf
This is an online portal specifically to offer resources for NFP Boards & Committees. Here are some good, simple to understand Online Training resources
https://www.communitydoor.org.au/boards-and-management-committees/governance-online-training
Another excellent resource for the NFP Boards & Committees. Its also very affordable and more NFP centred than some training. "OurCommunity" also has a good deal of very useful free resources.
https://www.ourcommunity.com.au/
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