Non-Profit Board Induction

prepared by Linda Carroli2007

Board role

A board has two key roles: • Legal compliance• Adding value to the organisation

“The board is responsible for creating the future, not minding the shop.”

John Carver

Board role

Source: http://www.managementhelp.org/Boards/brdrspon.htm

1. Provide continuity for the organisation

2. Select and appoint a Chief Executive

3. Govern the organisation by broad policies and objectives

4. Acquire sufficient resources for the organisation’s operations

5. Account to the public for the products and services of the organisation and expenditures

Corporate Governance

A Board needs …Source: Cameron Ralph Pty Ltd

• People – Business acumen, courage, integrity, diligence, independence of thought, wise use of social skills

• Group Dynamics – Relationships between Board and between Board and management

• Information – The right amount, about the right things• Decision Process – Agenda setting, problem scoping,

decision criteria, alternatives, risk analysis• Monitoring – Overseeing implementation, assessment

of Board and senior management

Board memberrole description

Source: The Book of the Board

Refer also to the Rules of Association

Function• Provide governance to the organisation• Represent the organisation to the community • Accept the ultimate legal authority for the organisation

Qualifications/Skills• Knowledge and skills in one or more areas of Board

governance eg policy, finance, programs or personnel Term (as per organisational rules)• As prescribed in the rules or legislation

Requirements• Commitment to the work of the organisation• Willingness to serve on at least one committee and

actively participate• Attendance at Board meetings• A time commitment of five hours per month (include

Board preparation, meeting and committee meeting time)

• Attendance at Annual General Meeting where possible• Be informed of the services and programs provided by

organisation and publicly support them• Prepare for an participate in the discussions and the

deliberations of the Board

• Be aware and abstain from any conflict of interest Major Duties• Govern the organisation by the broad policies

developed by the Board• Establish overall long and short term goals, objectives

and priorities for the organisation• Recommend policy to the Board• Promote the organisation membership through

community networking and other agreed methods

• Be accountable to the funders for programs and services provided and funds expended

• Monitor and evaluate the effective of the organisation through a regular review of programs and services

• Provide candid and constructive criticism, advice and comments

• Approve major actions of the organisation, such as capital expenditure and major program and service changes

• Annually review the performance of the Board and take steps to improve its performance

• Seek nominations for election to the Board when appropriate

• Prepare for and participate in the discussions and the deliberations of the Board

• Prepare for and participate in the discussions and the deliberations of the Board

• Foster a positive working relationship with other Board members and staff

• Be aware of and abstain from any conflict of interest• Be assured that management succession is properly

being provided

• Appoint independent auditors subject to approval by members

• Review compliance with relevant material laws affecting the organisation

• Undertake Board development and training as opportunities arise

Board & Operations Board responsibilitiesSource: Adapted from Pathways Australia, Australian Business Arts Foundation

• Meets, develops coherent decision-making processes and gets results

• Sets long term goals and ensures effective planning – strikes a balance between short term and longer term health of the organisation

• Having the final say when determining yearly objectives• Confirms policy and ensures the mission of the

organisation is adhered to – is highly mission focused

• Finalising budgets and allocating funds • Maintains it health - Appointing new Board members,

evaluating the Board’s performance and providing appropriate induction

• Taking ultimate responsibility for all legal matters• Taking ultimate responsibility for compliance with

regulatory requirements (eg annual general meeting etc)

• Appointing auditors and approving the audit of the financial records (via AGM)

• Managing committees

• Maintaining and building the organisation’s public profile and enhancing organisation’s public profile

• Managing risks• Approving any changes of additions outside the budget• Taking responsibility for the company’s financial records• Confirms and monitors organisation’s programs and

services• Evaluating Board members and their performance• Employing the organisation’s CEO, supports them,

setting their remuneration and evaluating their performance against agreed targets and plans.

• Employing the organisation’s CEO, supports them, setting their remuneration and evaluating their performance against agreed targets and plans.

• Adapts to the environment in which the organisation operates

• Serve as Court of Appeal• Ensures adequate resources and that those resources

are effectively managed

Operational responsibilitiesSource: Pathways Australia

• Providing information to the Board, including recommendations for action

• Supporting the Board’s planning function• Determining community needs – clients, members etc• Operating programs and reporting on their successes

and shortcomings• Evaluating performance• Organising the organisation’s events, fundraising

activities etc once approved by the Board• Managing volunteers and staff (other than the CEO)• Implementing Board decisions

• Conducting day-to-day financial operations• Monitoring and managing daily operations• Discussing ideas and forming long-term goals• Planning organisational strategies• Designing programs to achieve the group’s mission• Proposing fundraising ideas• Ensuring risk management programs are implemented• Ensuring that achievements are recognised and

documented• Promoting the organisation

Joint Responsibilities• Discussing ideas and forming long-term goals • Planning organisational strategies • Designing programs to achieve the group's mission –

mostly CEO’s role• Proposing fundraising ideas • Ensuring risk management programs are implemented • Ensuring that achievements are recognised and

documented • Promoting the organisation

Micromanagement

In understanding the difference between Board and Operations, we understand more fully our roles, are equipped to fulfil our duties and roles, and diminish the risk of micromanagement.

Micromanagement is a management style where a manager [Board] closely observes or controls the work of their employees [CEO], generally used as a pejorative term. In contrast to giving general instructions on smaller tasks while supervising larger concerns, the micromanager monitors and assesses every step. (Source: Wikipedia)

Micromanagement

• If boards micromanage because they don't know what else to do, then the obvious solution is to show them a different role.

• If boards micromanage because they are concerned and/or scared, then the obvious solution is to allay those fears.

• And finally, if board members micromanage because we've asked them to act as staff, then the obvious solution is not to ask them to perform staff functions.

Creating the future

• “The board is responsible for creating the future, not minding the shop.” – John Carver

• “Creating the future” means making a real impact and focusing on the reasons our organisation’s exist.