Good governance is important for every business from the Fortune 500 companies to the not-for-profit (NFP) local sports club.
It is what turns the group of people coming together from a collection of ideas and intentions to a focused group working towards a common goal.
Governance encompasses the system by which an organisation is controlled and operates, and the mechanisms by which it, and its people, are held to account. Ethics, risk management, compliance and administration are all elements of governance. (Governance Institute of Australia)
The etymology is from the Latin word referring to the steersman or captain of a ship. It evolved to embrace the concept of control and good order. We can conceptualise governance, therefore, as analogous to steering of a ship: it includes deciding the ship’s course, what it aims to achieve in going there and how the ship is to be maintained in good condition for the ultimate benefit of its owners
Whilst it can encompass the management and review of all facets of your organisation it is most commonly observed in the management and functions of Boards. This includes:
- The Constitution
- Governing body (board/committee)
- Board Charter
- Skills and backgrounds of board/committee
- Strategic Planning
- Risk Management
- Organisation Culture
- Ethics and Conflicts of Interest
Great resources are available to create, manage and steer the governance of your NFP.
The Department of Commerce has excellent information on the creation and management of an incorporated association.
Whilst you don’t necessarily need to become a member, the Australian Charities and Not For Profits Commission (ACNC) has information that will improve the processes and accountability of your association.
The Institute of Community Directors is a valuable resource for NFP resources and has a terrific policy bank that can save you a lot of time.
If we continue with the analogy of governance being the steering of the Incorporated Association ship, the strategic and business plans of the association are the maps used by the captain.
A great strategic plan gives direction to the organisation, it provides guidance for what paths to take and what to avoid, what is valued, how much fuel (money/resources) is needed for the journey and beyond, and most importantly how to recognise when you get there.
Business plans are the indicators along the way to make sure everything is okay. Are we sending the right signals (marketing, communication), how do financial key performance indicators (KPI’s) compare to financial reports, are there are enough people to keep things going and are those people valued, managed and directed?
The difference between strategic plans and business plans is that strategic plans give the direction, tells us what we aspire to, what we value, what the big jobs are and who is going to do them, and when. Business plans take the projects from the strategic plan and build them in to operations over time and in different areas of the business. It also does this under the guidance of the values and aspirations of the organisation.
Craig Holland (MBA, FLWA)
Craig is the Director Business Development for West End Projects. West End Projects offers consultancy and project management services specialising in organisational development, governance and strategic and business planning.
Written by Craig Holland