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Not-for-Profits Need High Calibre Board Members

Media Release

6 December 2005

Not-for-Profit Organisations Need More High Calibre Board Members

A growing number of not-for-profit organisations are paying board members for their services, but many of them still have concerns about being able to attract high calibre individuals to serve at board level.

These are among the findings of the Grant Thornton 2005 survey of not-for-profit organisations.

"We were not surprised to find that the three most challenging issues for this sector - financing, fund-raising and governance - were the same as in our last survey in 2003," said Grant Thornton not-for-profit specialist Brent Kennerley.

"But it is of concern that, while more NFPs are doing their bit by providing some remuneration, they are still having trouble attracting people with business and other such skills to their boards. This says to us that they still have some mind-set barriers to overcome, and there probably has to be more work done on shifting perceptions of both how stimulating and rewarding these particular governance roles can be."

Some 36% of respondents said they now provided remuneration to one or more members of their boards. In the 2003 survey, the figure was only 24%.

Meanwhile, more than half of the respondents are concerned about their ability to attract high-calibre individuals to serve on their boards.

Some 46% are concerned their boards do not undergo sufficient training and 41% believe their boards lack adequate knowledge of relevant legislation.

"This is probably due to the fact that board members are drawn most commonly from internal sources, such as from regional or membership representatives," said Mr Kennerley. "From the survey we can see that only a minority look outside their organisations for board members and obviously very few are volunteering themselves in from outside their circles.

"This inward focus may be constraining the range of skills and experience available to govern not-for-profits."

Mr Kennerley said that, in conjunction with this, many NFPs gave low priority to risk management and this was of concern.

"Nearly half the respondents do not undertake periodic risk profile assessments. As a result, they may be highly vulnerable if they face major problems beyond their control.

"It transpires that, even among those who undertake risk planning, there are gaps."

Mr Kennerley said that few had contingency plans or insurance for the loss of key staff and less than half had "worst case scenario" plans for disaster, loss of key income sources, or adverse media attention.

ENDS

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