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- When crisis hits the NFP sector, leadership exits often create the appearance of accountability, but experts warn they rarely address the deeper cultural and governance failures.
- Governance advisers and crisis specialists argue that rebuilding trust requires more than apologies or executive turnover.
- Recent cases highlight a difficult reality for boards: organisational recovery is rarely linear and public trust can only be rebuilt through long-term accountability.
When a not-for-profit (NFP) hits trouble, the response is almost always the same. The CEO is pushed out, the board chair is questioned, a review is launched and a statement is issued about lessons learned.
Then things go quiet.
But trust rarely returns as neatly as leadership changes suggest, a reality illustrated by White Ribbon Australia, which entered voluntary liquidation in 2019 before being re-established under a new model.
The uncomfortable truth is that organisational crises are often more than leadership failures, and changing leaders rarely fixes the deeper issues at play.
The default setting: Find someone to blame
“In the aftermath of a scandal, we often point to the CEO and the chair and ask for their replacement,” says Sandy Blackburn, managing director of Social Outcomes.
It’s clean, it’s immediate and it looks like accountability, but according to Blackburn, it often misses the point.
“Issues such as these are not only driven by an individual, but also by the systems and processes of the organisation. Replacing the CEO or the chair won’t address this,” she stresses.
Professor Will Harvey, director of the Sustainable Value Creation Institute at Melbourne Business School, agrees.
“While boards may wish to quickly reduce their organisation’s exposure through firing the CEO, often scandals run deeper and raise questions about wider conduct, including the board’s own prior actions,” he says.
The trust problem no-one wants to own
Sure, leadership change feels decisive. It signals action and broadly satisfies funders, the media and public pressure, but it can also be a distraction.
Because once the “bad leader” is removed, the organisation can move on without confronting harder questions, including: Were warnings ignored? Was dissent discouraged? Did governance actually function or just look like it did on paper?
Elliot Stein, founder of McCauley Group and former senior government and NGO executive, says organisations still misunderstand what crisis response actually requires.
“In any crisis, an organisation has to make a choice – will it respond through the prism of trust or just manage the risk?”
Choosing the latter, he says, means seeing the problem as needing only to minimise and mitigate.
“In practice, it usually means asking what the minimum possible legal requirements are and trying to communicate as little as possible.”
Trust, argues Stein, demands the opposite. It means accepting that silence costs more than uncertainty.
“If an organisation places trust at the heart of its decision making, then it will focus as much on its long-term reputation in the eyes of its stakeholders as it will on navigating its short-term crisis,” he explains.
Similarly, Harvey sees trust as non-negotiable. “Statements and apologies are a start, but they are cheap talk unless they are followed through by aligning to what you stand for,” he says.
What rebuilding actually looks like
Rebuilding an organisation’s reputation begins the moment a crisis starts, Stein explains.
“When scandal hits, organisations need to own their failings fully and collectively,” he says. “They need to speak quickly, equally and openly to all of those who have an interest in them – from the most senior official to the smallest customer.
“Finally, they need to be in control of their own destiny, charting out a clear narrative and a plan of action to recover. Then repeat, repeat, repeat”.
He adds: “Communicating constantly about the plan, and the progress against it, to all stakeholders, will result in that being the established public awareness of the crisis and boost an organisation’s credibility.”
Stein also highlights that while it is “entirely reasonable” for an organisation to say they might not know all of the facts, in the current landscape “organisations can no longer hide from public accountability if they wish to maintain their social licence”.
“Whether an issue is truly the responsibility of a single person or a broad systemic fault, the impact on an organisation is the same. The response must therefore also be the same.”
In short, he advises: “Act with trust, bring stakeholders into your confidence, set out a plan and communicate every step of the way.”
But recovery is rarely linear, and organisational visibility often shifts during periods of restructuring. While White Ribbon Australia was re-established shortly after its voluntary liquidation under new governance arrangements and a revised operating model, its public profile has since been lower, reflecting a greater emphasis on impact measurement and program delivery.
It is, in many ways, a reset under a new model, but also a reminder that rebuilding trust and organisational presence takes time and does not follow a straight line.
Learning from failure
Yet as Blackburn adds, the NFP world still avoids one critical step – documenting failure properly.
“I don’t think we talk about failure enough in general,” she says. “I’d love to see a published case study as to what happened that allowed the failure to occur and what was done to address it, along with the learnings of undertaking that remediation work. We can all learn from that.”
It’s a simple idea, but a rare one. Because failure, in most organisations, is still treated as something to move past, not something to analyse in public.
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