Not-for-profit directors: don’t be afraid to walk away
17 September 2013
Advice to not-for-profit directors: don’t be afraid to walk away
Geoff McDonald, Norris Ward McKinnon Partner, addressed more than fifty current and aspiring not-for-profit directors at a Waikato Institute of Directors seminar in Hamilton this afternoon.
His number one piece of advice was: don’t be afraid to walk away.
“When you join a not-for-profit board, no amount of research can prepare you for what you may be walking into.
“I would recommend you need to be ready to be heartless about walking away if the organisation and the board experience does not meet your expectations. That is hard to do, especially when other board members are counting on your input,” explained Mr McDonald.
He also advised wannabe not-for-profit directors to watch out for organisations where all the key decisions are made by management either before or after the board meeting.
“If you find you are simply getting an update on management activity and decisions, but not adding any value or providing input into decision making, you need to delve deeper. This can be a warning sign that organisational control is out of balance.”
Other advice from Mr McDonald included: ensure the Chair is passionate about the organisation; check there are skilled people, including an accountant, on the board; make sure the senior management team is skilled and trustworthy; and confirm there is a solid vision and strategy driving any major organisational change.
Presenting alongside Mr McDonald, Norris Ward McKinnon Associate, Shelley Slade-Gully, said there are five things a person should consider before joining a not-for-profit board.
“First, you need to understand why the organisation was established and the charitable purposes you’ll be helping advance. You also need to know what type of entity it is –a trust, society or company. Next, get a grasp on the organisation’s available resources. You’ll also want to look into the expertise of fellow directors and key staff.
“And finally, you need to understand what’s expected of you and what the future holds – get some information about the organisation’s long-term strategy and business plan,” explained Mrs Slade-Gully.
Margaret Devlin, Waikato Institute of Directors Chair, said often people use their heart more than their brain when making the decision to join a not-for-profit board.
“I’ve seen people join not-for-profit boards for one reason only - because they love the organisation. While you need to have a passion for the cause, it is more important to perform due diligence and understand the challenges and opportunities you will be up against.
“At the end of the day, you’re responsible for the strategic direction of the organisation and for ensuring it remains solvent. Being a director is a major responsibility and can be particularly challenging on a not-for-profit board,” she explained.
The Waikato branch of the Institute of Directors is one of the most active in the country with over 400 members. One of the Institute’s roles is encouraging aspiring directors as they embark on their governance careers. The Waikato Institute of Directors provides access to resources for Directors who are both members and non-members. www.iod.org.nz
5 things to consider
before you join a not-for-profit board:
1. Why was the organisation established and what’s its charitable purpose?
2. What type of entity is it?
3. What are the organisation’s available resources?
4. What is the expertise of fellow directors and key staff?
5. What is expected of you and what does the future holds for the organisation?