1. Getting the Right Board… and Getting the Board Right “Necessities & Unnecessary Distractions of NFP Governance” QAILS Conference 26 May 2015 John Peacock, General Manager, Associations Forum Disclaimer: This is practical advice based on our work with associations and charities. The contents of this presentation do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. You should seek specialist advice in relation to any particular matters you or your organisation may have. © Associations Forum 2015

2. About Associations Forum 1.Commercial entity assisting associations in Australasia & Asia 2.500 member organisations: professions, industries, charities 3.AF National Conference largest association event in Southern Hemisphere 4.Services similar to an association Governance and constitution reviews Policy and advocacy Free member meetings and events Networking and international connections Member advice helpline Journal, Enews, resources Benchmarking surveys e.g. salaries, Boards, finances Consulting and advice on boards, governance and planning © Associations Forum 2015

3. QAILS works towards the following objectives 1.To promote the development of community legal centres (GOOD BOARDS NEEDED) 2.To enhance communication and cooperation between community legal centres (LEARN ABOUT OTHER BOARDS & CONSTITUTIONS) 3.To secure and develop funding for community legal centres 4.To represent the interests and opinions of members. © Associations Forum 2015

4. Facilitator’s Career as a CEO and Volunteer Director 1.20’s – Commerce degree, large corporates; Board of professional association 2.30’s – Association manager and CEO of small association; Board of professional association and Chair of local community association 3.40’s – Established Associations Forum: providing education and advice to associations 4.50’s – Consolidation of Associations Forum and training of associations in Australasia and Asia © Associations Forum 2015

5. Terminology Governing DocumentConstitution, Rules, Memorandum and Articles of Association Governing BodyBoard, Trustees, Council, Committee, Management Committee Individuals on Governing Body Directors, Trustees, Councillors, Committee Member Senior Staff PersonChief Executive Officer (CEO) Executive Officer (EO) Executive Director (ED) © Associations Forum 2015

6. CLC Issues 1.Community Legal Centres are NFP associations but not ones that exist to serve members 2.Members may be a random group, presumably interested in access to justice 3.Is it good or bad Boards of Directors may be less emotionally connected to the cause of CLC’s than (EG) charity parents of a child living with an illness 4.Directors should play a role in raising funds 5.Your Board should not be a distraction for your CLC © Associations Forum 2015

7. What is corporate governance? 1.“Corporate governance is the system by which companies are directed and controlled 2.Boards of Directors are responsible for the governance of their companies 3.(Members) role in governance is to appoint the Directors and the Auditors and to satisfy themselves that an appropriate governance structure is in place.” - Cadbury Report (UK) 1991 © Associations Forum 2015

8. Simplified flow

9. Association’s key documents 1.Legislation – plus explanation of what it means to your association and people 2.Constitution – voted upon and changed by Members at General Meeting 3.By-Laws/Regulations (optional) – can be changed by the Board 4.Governance Charter – can be changed by the Board 5.Statements of Purpose – Mission cascades into Goals then Activities 6.Plan – stating what/who/when and presented in grid format 7.Budget – linked to Plan; drafted by CEO; approved by Board 8.List of Directors and Office Bearers – how long on Board and “day job” 9.Staff org chart – changed by CEO; will staff structure achieve Plan? 10.Minutes – Board meetings, committee meetings and General Meetings 11.Annual Report – records achievements, challenges; acknowledges efforts 12.Audited financial report – plus 5 years to 10 years financial history

10. Typical annual Board cycle © Associations Forum 2015

11. Associations Forum Board Survey © Associations Forum 2015 2008200920102011201220132014 Number Meetings Face to face 7.0 6.46.35.95.6 Number Meetings Total 9.48 87.4 Average Board Size 11.211.69.610.011.210.19.5 Ideal Board Size N/A8.48.08.68.58.48.1

12. Ways to attract new directors Efficient structures that maximise the use of a director’s time Clear expectations of level of commitment expected Clear organisation Plan and Board practices Good communication and reports that impress the candidate Directors publicly acknowledged and thanked © Associations Forum 2015

13. The role of the Board Responsible to the members who are the stakeholders (less so for CLCs) Determines Mission and Purposes (Objects) Develops strategic plan Financial oversight and consider risk Legal accountability Assigns responsibilities e.g. committees © Associations Forum 2015

14. Getting the Right CLC Board As members should appoint the Board and hence the Board is accountable to the members – get wise & aware members Getting the right Board includes processes for recruitment, induction and effectiveness Have 6 Directors = 3 people/year x 2 year term Have a rule that the President can only stay for (say) 4 years Have a culture that the Directors can only stay for up to 10 years – and if not contributing, sooner © Associations Forum 2015

15. Getting the CLC Board Right A culture of mutual respect and openness that encourages constructive debate Active debate from a Board with a range of experience, expertise, age and gender Delegates management to staff Experienced and effective chair who encourages debate and helps resolve differences Efficient Board structure and processes including committees, Board papers and information flow © Associations Forum 2015

16. Board/staff relationship RESPONSIBILITYBOARDSTAFF GovernanceDecides “what”Decides “how” PersonnelEvaluates CEOHires and manages staff PolicySets policiesImplements policies Legal and financeEnsures compliance and oversight, approves budget Develops budget, manages and reports StrategyPlans and monitorsPlans, implements and reports ProgrammesApprovesDevelops, proposes and implements RepresentationRepresents to other organisations Represents as delegated by Board © Associations Forum 2015

17. Things Boards must do 1.Have good long-term Plans 2.Have clear, informative agendas for Board meetings 3.Be clear on decisions, especially if internal disagreement 4.Have Minutes that explain and record decisions – but are not verbatim 5.Work to improve Board performance and how it operates 6.Keep all Directors involved in significant decisions – not have an “inner Board” and an “outer Board” 7.Be well chaired by person with skills and respect 8.Have governance training every year © Associations Forum 2015

18. Unnecessary Distractions 1.Few members or disinterested members 2.Overly interested members! 3.Disorganised governance processes 4.Not enough quality Board candidates 5.Board with the wrong motivations that interferes 6.Poor chair DISTRACTIONS BEYOND GOVERNANCE 1.Lack of money 2.Substandard management © Associations Forum 2015

19. Moving from “management” to “governance” 1.When sufficient and regular income, staff should be employed 2.Paying for administration is the first, easier step which needs to be managed by the Board 3.Hiring an association professional e.g. CEO who will manage is a harder step 4.When management level staff are employed, the Board culture has to change from management to governance 5.Directors need avoid overwork and burnout – their role is oversight and not to do everything 6.Associations must have association and governance training © Associations Forum 2015

20. How governance differs from management MEMBERSBOARD OF DIRECTORSCEO/MANAGEMENT NumberBetween 2 and 1,000,0008 members (including Chair) 1 CEO and various staff Why be involved Most members only join to receive services = inactive Actively volunteer up to 1 day per month (more if Chair) Paid employee to implement Plan and achieve Budget RoleClients & stakeholdersGovernanceManagement Money flow Members pay annual feesDirectors usually not paid CEO and staff are paid Account -able? No. Members can join if they wish. Yes. Members vote on who will be on the Board Yes. Board employs CEO and can dismiss CEO © Associations Forum 2015

21. Boards must ensure Plans 1.Boards should focus on the Mission and strategic objectives 2.When an association employs management, Boards should allow management to achieve the Plan 3.When you know your Plan and Balance Sheet, a Budget can be developed 4.Association plans can be strategic plus operational 5.Strategy is balancing what is desirable and possible 6.Refer to plans at every Board meeting – Board monitors 7.Plans need ownership by Board and CEO - other volunteers and staff must see where they fit in to the Plan and Budget © Associations Forum 2015

22. Once Mission and Goals are decided, move to details in grid format GOALACTIVITYRESPONSIBLETIMINGNOTEPRIORITY 1 Educate1.1 ConferenceEvent MgrMay ‘16MeasB1 1.2 On line learningExternalJul ‘16A3 2 Inform2.1 NewsletterComms MgrQtrlyMeas 2.2 WebsiteComms MgrOngoingMeasB2 3 Advocate3.1 Develop policiesBoardDec ‘16 3.2 Meet MinisterPresidentJan ‘16A2 4 Expansion4.1 Trade missionCEOAug ‘16Meas 4.2 Economic analysisExternalNov ‘16B3 5 Governance5.1 New databaseCEOJul ‘16 5.2 Review Constit’nSub C’teeMay ‘16A1 5.3 Govern trainingCEOJan ‘16 © Associations Forum 2015

23. Board matters 1.Board agenda 2.Board decisions 3.Board minutes 4.Office Bearers 5.Chairing meetings 6.Committees 7.Finances and budgets © Associations Forum 2015

24. Improving Board performance 1.Boards should be committed to a process of Board and meeting effectiveness evaluation 2.The process should be established before a problem occurs 3.This process, often externally facilitated, occurs outside regular Board business 4.Director assessment is challenging in a voluntary environment, but can be tackled indirectly © Associations Forum 2015

25. Conclusion 1.CLCs are associations that are not there to help members, so consider who should be members 2.Members change the Constitution and vote for Board/Committee, so have Processes that get suitable candidates into the election 3.CLC constitutions could be improved 4.Once a Board in place with staff, plan and budget, Board should not micromanage and be vigilant 5.Best practice processes for Plans, agenda, minutes and so forth need to be followed 6.Then CLCs will give quality legal advice to the needy © Associations Forum 2015

26. Levels of AF Membership 1.Journal and eNews 2.Free events and member event discounts 3.Benchmarking surveys 4.Policy and advocacy 5.Member advice helpline 6.Local and international networks 7.Board and staff training (Silver and Gold) 8.Governance and constitution review (Silver and Gold) 9.Financial benchmarking (Gold) 10.Strategic planning discount (Gold) © Associations Forum 2015

27. Our conference & magazine

28. Thank you! John Peacock, General Manager, Associations Forum Pty Ltd jpeacock@nfp.net.aujpeacock@nfp.net.au 02 9904 8200 Associations Forum National Conference 14 - 15 July 2015 Adelaide Convention Centre, © Associations Forum 2015