Elizabeth Proust considers the changing not-for-profit sector and the importance of NFP governance.

    It may surprise readers that the not-for-profit (NFP) sector comprises around 20 per cent of our members.

    These directors face an evolving regulatory landscape, the emergence of new funding models and an increasingly complex operational environment. Combined, this means governance has never been more important for the sector.

    This year the study examined how, during this time of disruption and change, NFPs are building foundations for long-term success.

    In this context, I draw your attention this month to our eighth annual Not-for-Profit Governance and Performance Study, the findings of which are discussed in more detail from page 32. For eight years, this research has provided a snapshot of how the sector is faring, as well as lessons for NFP leaders, governments and regulators in how together we can strengthen the sector.

    This year the study examined how, during this time of disruption and change, NFPs are building foundations for long-term success. We explored issues of organisational culture, along with risk and reputation management. We also revisited the financial challenges faced by the sector to dive deeper into directors’ attitudes to financial management, particularly in making profit.

    The results revealed that while many directors believed their organisation was performing well, there were often not the appropriate formal controls or monitoring of processes being undertaken at board level.

    As the NDIS is rolled out across Australia, this year’s study also examined how NFPs working in the disability sector were adapting to the changes presented by its implementation. We found that NFPs on the whole are well-prepared and boards had long considered the profound changes that would need to be made to survive and thrive under the new system. However, there is considerable frustration at the lack of consultation in the rollout of such a large paradigm-shifting project.

    We also profile Vicki O’Halloran AM FAICD and Ken Dean FAICD – two leaders representing the NFP space and providing their insights and experiences of the issues discussed in the study.

    This study remains a cornerstone of the AICD’s commitment to supporting NFPs to achieve better outcomes through good governance and we hope that this eighth edition once again incites meaningful conversations among NFP boards around Australia.

    Last month, I was pleased to announce that Angus Armour FAICD has been appointed the new Managing Director and CEO of the AICD.

    Angus has been a member of the AICD since 1997 and undertook the Company Directors Course™ in 2003.

    Angus, who will start in early October, comes to the AICD after a distinguished career in Australia and overseas in financial services and advising business and government, particularly on trade and investment issues. Most recently, Angus was the principal adviser at the Business Council of Australia, focused on innovation and disruptive technologies.

    Under Angus’ leadership, we will cement our role as a key influencer in the creation of world-leading governance laws and practices in Australia, and help boards and directors achieve excellence in governance.

    Please join me in welcoming Angus.

    The board wishes to disclose that the remuneration for the new CEO of the AICD will be an annual salary of $525,000 (including superannuation). He will have the possibility of earning a bonus of up to 40 percent of this salary, depending on the achievement of KPIs.

    Rachel Gatehouse MAICD, who has led the AICD as acting CEO since late 2016, will continue to direct AICD’s activities until October, at which time she will resume her role as CFO and general manager, corporate services. Rachel has done a tremendous job in the role this year. We cannot thank her enough for her strong leadership under challenging circumstances.

    On another note of change, this will also be the last issue of Company Director produced with current publishers, C3 Content. C3 and its principals Craig Marsh MAICD and Graham Burdis MAICD have managed the production, publication and distribution of almost 150 editions of our flagship membership publication. We thank them for their significant contribution.

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