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Board & Governance

Effective impact measurement for NFP boards

By Board & Governance, Business

Impact measurement is increasingly acknowledged as essential for good governance, particularly in the NFP sector where boards are accountable to various stakeholders for achieving their organisation’s mission.

This process assures funders by focusing discussions on the outward outcomes for clients, communities, and systems rather than just internal financial performance.

Boards must balance the risk-return equation, understanding that not taking action poses risks to achieving impact.

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Good NFP risk management – A great ICDA Resource!

By Board & Governance, Business, Operations

Human beings, particularly leaders in the community sector, often exhibit an inherent optimism bias, assuming things will turn out favorably despite potential risks. However, this optimism can hinder effective risk management practices, leading to overconfidence, cutting corners, and unrealistic expectations.

In the not-for-profit and charity sector, where leaders aim to achieve missions with limited resources, optimism can be particularly pronounced.

The Institute of Community Directors Australia (ICDA) emphasize the importance of identifying, evaluating, and mitigating various risks, including physical, professional, environmental, employee, financial, criminal, and regulatory risks.

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Diversity in the Boardroom

By Board & Governance, Business

Achieving genuine diversity in the boardroom involves embracing a broad range of perspectives, overcoming barriers and biases, and formalising a commitment to diversity through policies and strategies.

By doing so, boards can capitalise on the benefits diversity brings and contribute to more effective governance and decision-making.

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Reflecting On Your Governance

By Board & Governance, Business

Sue Woodward AM sheds light on compliance reviews, an often overlooked aspect of charity work, aimed at ensuring transparency and accountability within the sector. These reviews, which focus on charities potentially failing to meet their obligations, allow for collaboration and proactive measures to address emerging issues. Recently published findings highlight concerns regarding charities where founders maintain key roles, emphasizing the risks of power imbalances and the erosion of governance structures. Through these reviews, common governance challenges have been identified, particularly in smaller charities overly reliant on founders for day-to-day operations.

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How to build an inclusive workplace

By Board & Governance, Business, Leadership, People & Culture, Personal

Board dynamics are influenced not only by formal meetings but also by informal interactions among members outside the boardroom. To address potential factions and ensure effective decision-making, the chair and board members should establish clear guidelines for engagement, including codes of conduct and transparency about offline conversations.

Creating a positive and inclusive environment involves maintaining neutrality, patience, and equal access to information. Ultimately, promoting constructive dialogue and understanding both inside and outside meetings is crucial to prevent detrimental coalitions and enhance decision quality.

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How to evaluate a board before joining

By Board & Governance, Business

This article emphasises the critical importance of due diligence for individuals considering joining a board, whether for-profit or nonprofit.

It underscores the necessity for directors to thoroughly investigate potential risks, including personal financial liability and reputational damage, before accepting a position. The AICD director tool is recommended to guide aspiring directors in conducting the necessary inquiries to align their skills and experience with the needs of the board.

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Impact measurement and governance

By Board & Governance, Business

In response to the heightened need for transparency and accountability in the for-purpose sector, impact measurement has become a crucial requirement.

The 2022/23 NFP Governance and Performance Study highlights the ongoing challenge for many organisations in effectively measuring their outcomes. This introductory guide serves as a valuable resource for NFP boards aiming to comprehend and implement impact measurement practices. It provides a foundational understanding for boards seeking to establish frameworks for managing, measuring, and reporting on their organisation’s impact.

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Changes in reporting requirements for NFP organisations​

By Board & Governance, Business, Operations

From 1 July 2023, not-for-profit (NFP) entities with an active Australian business number (ABN) are required to lodge an annual self-review return to access income tax exemption. 

Announced as part of the 2021-22 Federal Budget the new measure is intended to enhance transparency and integrity, by ensuring only eligible NFPs access income tax exemption.

The annual self-review return will need to be lodged between 1 July and 31 October 2024. Further information on the ATO Website. 

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