A recent AICD panel unpacked the revised AICD Not-for-Profit (NFP) Governance Principles, which are a key source of guidance for directors of Australian not-for-profits, including charities.
When Virginia Bourke FAICD joins a board, she brings with her a checklist – not of tasks, but of principles.
Chair of Mercy Health and Pro-Chancellor of the Australian Catholic University, Bourke is a highly experienced not-for-profit (NFP) director. Speaking at the 2025 Australian Governance Summit, she described how the AICD’s Not-for-Profit Governance Principles have become part of her routine practice. “Each time I have joined a board, I have used this list of Principles to really look at gaps,” she said.
Far from a symbolic gesture, this approach reflects a growing recognition that governance in Australia’s NFP sector must be more rigorous, responsive and accountable. The AICD’s recently revised Not-for-Profit Governance Principles – now in their third edition – are designed to support directors in meeting these expectations.
From framework to function
Released in 2024, the revised NFP Principles respond to a governance landscape shaped by heightened community expectations, increasing regulatory obligations and findings from recent Royal Commissions into aged care and disability. These developments have highlighted the importance of board oversight in areas such as organisational culture, stakeholder engagement and long-term sustainability.
“The Principles provide a framework for thinking about the governance work you have to do and decisions you make as a board,” Ms Bourke said.
Consolidated from 10 to eight principles, the revised third edition is concise, but also maintains comprehensive coverage of key governance themes. Each principle is supported by practical questions for directors, case studies and links to relevant AICD tools, guides and practice statements.
Designed for the realities of NFP governance
Importantly, the Principles are designed for organisations of all sizes and levels of complexity. As Ms Bourke said, “They were written with smaller NFPs in mind, including those without a company secretary.”
Boards are encouraged to engage with the Principles regularly – by discussing one principle at each meeting or assigning directors to reflect on specific elements. A companion checklist provides additional structure for smaller organisations – low-cost, high-value exercises that can lift board performance over time.
Virginia Bourke FAICD (centre) in conversation with AICD Senior Policy Adviser, Sean Dondas MAICD, and AGS session host, Helen Dalley GAICD.
Elevating culture and the client voice
One of the most notable developments in the revised Principles is a stronger emphasis on organisational culture as a central governance concern.
“Culture drives so much of performance,” Ms Bourke said. Boards are encouraged to consider indicators such as employee and volunteer turnover, internal complaints and staff engagement to assess underlying cultural trends. As a collective, reflecting on individual board behaviours and biases also helps to enhance the way the board makes decisions.
The revised Principles identify cyber security and the prevention of workplace sexual harassment as critical areas requiring board attention – recognising their importance in both risk oversight and building stakeholder trust.
Equally, the updated guidance calls on boards to elevate the client voice. “The days of ignoring the client voice are well and truly over,” Bourke said, referencing increasing expectations of regulators and the community, particularly in sectors such as health and aged care.
Boards can adopt formal mechanisms – such as consumer advisory bodies or including lived experience in board composition – alongside informal approaches like site visits and direct engagement with former clients. Canteen Australia, for example, enshrines lived experience in its constitution – demonstrating a structural commitment to client voice.
Governing for accountability, sustainability and strategy
Spanning topics such as board composition, risk, performance and sustainability, the Principles prompt directors to consider not just whether governance structures are in place, but whether they are effective in practice.
Key questions for directors include:
- Is the board receiving reporting that supports meaningful oversight?
- Does the board understand the organisation’s risk culture?
- Beyond the annual report, how is transparency maintained?
- What structures support long-term sustainability and strategic clarity?
The revised framework encourages boards to move beyond procedural compliance towards governance that is intentional, outcomes-focused and aligned to purpose.
A sector responds
Since its release, the revised Not-for-Profit Governance Principles have been accessed more than 21,000 times – reflecting strong sector engagement and an appetite for practical guidance.
In an environment of increasing scrutiny, governance is no longer a background function. It is a strategic enabler – and a visible signal of accountability to funders, stakeholders and the community.
As Bourke’s reflections underscore, the Principles are not just a document to be read, but a framework to be worked with. For directors committed to effective stewardship, they offer a pragmatic and enduring guide to good governance.
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