About Us  |  Shop  | 

Community Resources - for Community GroupsInstitute of Community Directors AustraliaGive Now - for IndividualsJoin In Join Up - for IndividualsCorporate Responsibility - for BusinessGrants Management - for Government
Help Sheet

Modern Governance and Community Groups

Governance is about how your organisation is run - the structures and systems and understandings that enables you to take the right decisions and set the right course. It's not the same thing as management -- what the Board does is governance; what the CEO does is management -- though the two functions can overlap to some extent at the upper levels.

Governance isn't your actual policies, either, or your mission or your direction; it's how your organisation decides what that mission and that direction and those policies are.
There's no one perfect organisational solution, and a not-for-profit organisation can do very well under a number of possible structures of governance. What you're looking for is a structure that can combine
  1. Responsiveness
    Everybody who has an interest in a decision, and everybody who has information about the topic, should be able to be heard; if possible, everybody who has an opinion on the subject should be listened to.
  1. Decisiveness
    After everyone has been heard a decision has to be taken, and that decision must be implemented wholeheartedly across the organisation.
  1. Ease of use
    As far as possible the system should be transparent, flexible, and straightforward. It should be possible to see immediately who's responsible for what, and how that responsibility relates to the whole mission and to other sectors of the organisation.

The Board

The Board is at the head of the organisation's structure of governance. The Board has total authority, under the law, until some of that authority is parcelled up and given away (delegated) to others. Final decisions on important issues must always pass by the Board. It is up to the Board to create the other organisational structures that will make it possible to carry out the mission.
The Board must
  • Establish a clear mission and vision
    Set up the light on the hill that will guide the organisation in dark times
  • Identify the organisation's core values
    What are the guiding principles that drive the organization's response to events?
  • Define the organisation's programs and services
    Assessing the need in the community, analysing opportunities, and developing a strategic plan based on your resources
  • Obtain needed resources and community support
    Board members need to be comfortable selling the mission of the organisation and participating in fundraising activities. Board members should also be prepared to donate money themselves.
  • Provide financial oversight and ensuring the organisation meets its legal and financial requirements
    Developing budgets, monitoring program activities by tracking key performance indicators, managing investments, and reviewing financial statements
  • Develop appropriate risk management practices
    Gaining an understanding of the risks the organisation faces and its ability to obtain insurance for some of those risks.
  • Select leaders for management positions
    Choosing the CEO and monitoring their performance. Governance is not necessarily about doing: it is about ensuring things are done. The Board  must be definite about its performance expectations, must assign these expectations clearly, and must check to see that these expectations are being met.

Committees

Most Boards set up committees when issues become too difficult or too numerous to be handled by the entire Board. They can either be ad-hoc, temporary committees established for specific short-term projects or activities or more permanent standing committees for on-going major work. The role of both sorts of Board committees is to draft and recommend policies for the approval of the entire Board, or in some cases to take on a significant project.

Not all Boards have committees, and not all Boards have the same committees. It is up to each Board to decide which committees they wish to establish -- Governance, for example, Budgets and Finance, Human Resources, Program Development, or Fundraising -- and their individual terms of reference. The only rule is that each committee needs to have a well-defined purpose that is clearly articulated to each committee member.

Each committee needs to be chaired by a Board member. The Board chair often appoints these after asking for volunteers at the appropriate Board meeting.
Consider including non-Board volunteers as members of the committee. Committees are an excellent way of "auditioning" potential Board members.

Remember to rotate Board members on to various committees over time. Other pressures and time commitments may mean that Board members can sometimes only commit to a temporary, ad hoc committee.

Involving relevant staff members as committee members provides a "reality check" for recommendations. Many good ideas dissolve into the ether because they are simply not achievable for the organisation at a particular time. Staff members are able to describe the potential impact of Board recommendations on the work of the organisation. Without dampening the intent of the advice, they should be instrumental in framing committee recommendations into achievable outcomes.

Management

Every large community group will have a Chief Executive Officer (CEO) in charge of the management, and its Board will have a Chairman. As these two roles complement each other it is vital that the individuals in question are able to maintain a good working relationship.
The CEO must take executive responsibility for the goals of the organisation and must be responsible for implementing the agreed policies and work programmes. The CEO is also responsible for managing (and nurturing) the staff.
It is for the CEO to design a structure of staff responsibilities that both encourages innovation and ensures that work is efficiently performed. Responsibility for any decisions should be placed at the level appropriate to its importance and its dependence on professional expertise.

Approaches to governance

Inspirational
Not-for-profit organisations have always prided themselves on a style of government that is (at least when compared to large commercial enterprises) informal, consultative, and relationship-oriented. The task of a leader in this system is to nurture a vision of what could be, and then inspire people to participate in its implementation.

Administrative
Bureaucracies have traditionally focussed on rigid procedural systems that document exhaustively every passage of paper through a hierarchy of decisionmakers until a final judgement is made. The task of a leader in this system is to ensure that there is no leakage of laxity into the office and that all safeguards are strictly enforced.

Not-for-Profit
One of these approaches is more accountable, one is more entrepreneurial, but both have their virtues. Modern governance must seek to combine both, projecting a vision and ensuring that all accountability safeguards are in place.

Our Community Pty Ltd   www.ourcommunity.com.au   ABN 24 094 608 705
National Headquarters: 51 Stanley St, West Melbourne Victoria 3003 Australia
(PO Box 354 North Melbourne 3051 Victoria)
Telephone (03) 9320 6800   Email service@ourcommunity.com.au