At the Table with Lawrence Goldstone: What NFP boards can teach every director

For aspiring directors looking to make a difference in the not-for-profit sector, a seat at the boardroom table is only the beginning, says Lawrence Goldstone. 

OzHarvest chair and Be Luminous co-CEO and co-founder Goldstone says effective NFP directorship requires more than governance expertise. It calls for a willingness to roll up your sleeves, put your networks to work and stay connected to the organisation’s purpose.

In this edition of At the Table, Goldstone shares what it takes to govern in the NFP sector, what other boards can learn from NFP governance, why succession planning should be proactive rather than responsive, and why the real work of directorship often happens between meetings. 

You’ve spent considerable time on NFP boards. What’s different about governing an organisation where purpose rather than profit is the primary driver?

On an NFP board, certainly at OzHarvest, everyone’s very clear about the purpose and mission. It infuses everything we do. As a board director, governance is as much about protecting culture and the mission as it is about protecting the risks and financial balance sheet side, the fiduciary side of our role. But sustainability is one of our core drivers so getting the right breath of expertise across NEDs into the boardroom is really key for us. A strong governance, risk-controlled board, as an example, would be at odds with a more agile, innovative and scrappy NFP. For me, it’s very much about having that balance between purpose and mission, and protecting the culture, as it is about making sure we’re making the right financial decisions.    

Is it harder for a board to make a difficult decision when there’s a strong emotional connection to the organisation’s purpose?

Using OzHarvest as an example, emotional connection is important, but it should never cloud good judgement. It’s certainly more of a balance to get right. There are decisions where the impact of mission clarity allows for more leeway in decisioning. Often, being able to name the challenge, certainly in my experience, an understanding of where the trade-off is and what’s right versus what’s needed. Stopping a program or initiative and having to make the right call doesn’t mean you stop caring, it’s just a question of how we’re able to achieve impact – and often impact at the scale and core purpose of the organisation. Sometimes a reframe is needed, and as an NFP, it’s always a juggle around cost, resource and impact, and the crossover of each of those at the right place and time.  

So, I don’t think it’s harder to make a decision. I think you use the emotional connection to make the right decisions.  
 

What can NFP boards teach other directors about balancing the interests of different stakeholders?

NFP boards operate with more stakeholders and less leverage, fundamentally. We have donors, beneficiaries, government, corporate partners, volunteers, staff, tied funding and untied funding. This forces a different level of trade-off and conversations when thinking about your stakeholders. It’s really important to remember who we do this work for, who the recipient in our language or the customer in others might be, and often that stakeholder is not in the room. It’s critical to ensure you have an understanding of the impact – and the voice of that stakeholder who isn’t present – into the balancing of the interest around the decisions being made. Where are we having the impact, how does this align with our mission and purpose, and is this the right decision to be made? 

Conversations around succession and skilling are probably the two that aren’t being had enough – CEO and board succession, and the right skills for the right boards. With NFPs, probably more than most, you get almost a family-like loyalty to those people who are in the room, which makes the ‘who comes next’ topic tough to bring up and also hard to ensure you’re getting the right skills around the table. You end up being blindsided by change or retirements, and just looking to replace rather than using the moment to ask what skills are most needed and most aligned to our strategy for the next three, five or 10 years – while also making sure you have the diversity of thinking, background, age and considerations onto the board. 

Succession at board level in skillsets and in the CEO sometimes gets overlooked and is done more tactically – driven more by need rather than strategically and planned for well. 

What’s something you understand about being a director now that you didn’t when you first joined a board? 

Probably early on, I thought the job was mostly around the judgement you apply in the room, asking good questions, spotting the risks, and adding value at board meetings. What I’ve come to understand more over the years is that the real work happens outside the meeting. It’s the relationships you build with the CEO and executive team. It’s the time you spend between sessions. It’s the informal calibration you have with the other directors, the culture you set by how you show up and how you approach the role of being an active director. For me, a board’s effectiveness is decided far more by its rhythms and trust between the meetings than any single decision we ever get to make in one. 

To be on an NFP board, you need to roll your sleeves up. The more you give the better you are, which perhaps isn’t that expected.

What do people often get wrong about what it’s actually like to sit on a board, particularly of an NFP? 

I’m not sure I know what people get wrong, but I discuss three things in conversations with all new prospective directors. 

One, clarity of expectation. If you think this is just board papers and meetings, then it mightn’t be the right board. Being on an NFP board requires you to have that clarity of how you can have an impact and why you’re here. 

Two, the need to lean in, to be a mentor, to be an adviser, to be active and involved, and to show up, to show you care. Presence really matters. This is a job, an environment where the people who work at NFPs care really deeply. They’re often cause-led, and they’re trying to do as much as they can with often a limiter on resources and skills. 

And then finally, you’re there for a reason – for your skills, your network, your time. And you need to be prepared to give that. If you think it’s just doing the job because you’re needed and you turn up six times a year, for me that’s just not enough. It’s a really important choice and shouldn’t be stepped into lightly.

The OzHarvest CEO CookOff is taking place across Australia this October and November. To sign up, nominate your CEO, or donate, visit here.