Striving for Governance Accountability

By Jo Moar - Organisational Consultant

Empowering Not for Profits to Build a Resilient Future

www.mursetter.co.nz

Governance

Non-profit organisations (NFPs) in New Zealand are established to serve the community or members without the goal of generating profits for shareholders or owners. This sector encompasses charities, voluntary groups, sports clubs, and non-governmental organisations.

As NFPs evolve from small volunteer-led initiatives to larger entities employing staff or receiving public funding, the need for robust governance becomes increasingly crucial. Proper governance ensures accountability in the allocation and utilisation of funds, reflecting the organisation's commitment to responsible stewardship.

A recent Harvard Business School working paper – titled ‘Nonprofit Boards: It is Time to Lift Your Gaze and See the System’ – found not-for-profit boards focus on two sets of responsibilities: their fiduciary and legal compliance (Level 1 Governance: Duty and Fiduciary Responsibilities), and monitoring their organisation’s performance (Level 2 Governance: Organisational Mission Performance). Boards operating at Level 1 and 2 ask questions such as ‘how well are we achieving our goals?’

In light of the significant impact not-for-profits have on communities and social change, the authors advocate for boards to strive for Level 3 Governance: System Performance. This level entails boards asking critical questions such as "What should our contribution to the well-being of our communities be?" and "How can we influence the systems that create barriers for our communities?" By addressing these questions, boards can play a transformative role in shaping systemic change and advancing the overall well-being of the communities they serve.

Is your board or committee equipped to effectively govern your organization? Do you have independent members who possess expertise in critical areas, or are they all volunteers with limited experience in managing a trust or association? Are they aware of the impending changes outlined in the Charitable Trusts Act, and are they adequately prepared for them?

According to Jo Moar, founder of Mursetter Consultants, it's crucial to offer support options for boards to enhance their strategic effectiveness and impact. Whether it's through independent board or committee members providing additional strength in driving change, removing obstacles, and finding solutions, or through support personnel handling administrative tasks so board/committee members can focus on their roles, ensuring effective governance is essential.

If your board or committee needs additional support please contact Jo about the solutions Mursetter Consultants can provide.