1. GOOD GOVERNANCE PRINCIPLES AND GUIDANCE for Not-for-Profit Organisations Promoting good governance and supporting directors and boards of not-for-profit organisations Presented by Phil Butler

2. GOOD GOVERNANCE PRINCIPLES AND GUIDANCE Australian Institute of Company Directors Australia’s professional organisation for directors - More than 33,000 members Members from: -Private (for-profit) commercial companies - Not-for-profit (NFP) organisations - Government entities 2 for Not-for-Profit Organisations Phil Butler – 9 October 2013

3. GOOD GOVERNANCE PRINCIPLES AND GUIDANCE Our Role “To provide leadership on director and governance issues to achieve a positive impact for the sector, economy and society.” 3 for Not-for-Profit Organisations Phil Butler – 9 October 2013

4. GOOD GOVERNANCE PRINCIPLES AND GUIDANCE Our Commitment to the NFP Sector To support organisations in the NFP sector to achieve their respective missions through ongoing improvements in governance Build greater awareness of the contribution of NFP directors and support their ongoing professional development 4 for Not-for-Profit Organisations Phil Butler – 9 October 2013

5. GOOD GOVERNANCE PRINCIPLES AND GUIDANCE Ten Principles that promote good governance The Principles are designed to assist directors and boards in their conversation on good governance and how they can implement practical approaches in improving governance within their organisation. Questions for consideration The Questions are designed to enable boards to discuss key issues and determine if they are relevant to the organisation. They are not designed to be recommendations. 5 for Not-for-Profit Organisations Phil Butler – 9 October 2013

6. GOOD GOVERNANCE PRINCIPLES AND GUIDANCE Ten Principles that promote good governance 1.Roles and Responsibilities - The need for clarity 2.Board Composition - The right group of people 3.Mission and Strategy - An appropriate vision, purpose and set of strategies 4.Risk - Recognition and management, appropriate risk oversight 5.Organisational Performance - A focus on effective use of resources 6.Board Effectiveness - Appropriate board structures and processes 7.Integrity and Accountability - The right information at the right time 8.Organisation Building - Build and maintain organisational capability to deliver on purpose 9.Culture and Ethics - A healthy culture in the boardroom and throughout the organisation 10.Engagement - Effective stakeholder engagement 6 for Not-for-Profit Organisations Phil Butler – 9 October 2013

7. GOOD GOVERNANCE PRINCIPLES AND GUIDANCE Key Issue 1 – Mission The role of directors in determining appropriate strategy in line with the mission (Principle 3) The role of directors in determining and monitoring appropriate performance indicators (Principle 5) Better governance equals better outcomes 7 Phil Butler – 9 October 2013 for Not-for-Profit Organisations

8. GOOD GOVERNANCE PRINCIPLES AND GUIDANCE for Not-for-Profit Organisations Key Issue 2 – Financial Sustainability The role of directors in ensuring the financial sustainability of the organisation and effectively using its resources (Principle 5) The role of directors in risk oversight (Principle 4) Reliance on Government Funding Insolvent Trading 8 Phil Butler – 9 October 2013

9. GOOD GOVERNANCE PRINCIPLES AND GUIDANCE for Not-for-Profit Organisations Key Issue 3 – Skill Sets Organisations need the right group of people (at the right time) to govern the organisation (Principle 2) There should be clarity of the roles, responsibilities and expectations of directors (Principle 1) There should be regular discussion around the effectiveness of the board (Principle 3) Passion / Expertise Succession Planning in the Real World 9 Phil Butler – 9 October 2013

10. GOOD GOVERNANCE PRINCIPLES AND GUIDANCE To obtain a copy visit: www.companydirectors.com.au/goodgovernance or email: nfp@companydirectors.com.au 10 for Not-for-Profit Organisations