As an aspirational statement, how would you like to be the director of “an organisation that makes such unique contribution to the communities it touches, and does its work with such unadulterated excellence that if it were to disappear, it would leave hole that could not be easily filled by any other institution on the planet”. Those words by Good to Great author Jim Collins writing about the social sector in his book.
Serving on community-good or not-for-profit board provides an opportunity to achieve such an aspiration. But it demands at least as much governance skill as serving on commercial board.
As Collins says, “In my work with nonprofits, I find that they’re in desperate need of greater discipline – disciplined planning, disciplined people, disciplined governance, disciplined allocation of resources. culture of discipline is not principle of business; it is principle of greatness.”
New Zealand’s community-good organisations are desperate for directors who will bring that discipline to the achievement of the organisation’s mission. Collins goes on to say: “In the social sectors, the critical question is not ‘How much money do we make per dollar of invested capital?’ but ‘How effectively do we deliver on our mission and make distinctive impact, relative to our resources?’ Too many of our community-good organisations fail to focus on optimising achievement of their reason for being.”
I’ve worked with community-good boards of all shapes and sizes from Kaitaia to Invercargill. There are effective boards which are clear about their purpose for being and have disciplined approach to achieving that purpose. But, sadly, they are all too few. Many community-good boards could be more successful organisations if those with governance skills or governance aspirations took time to serve on them.
Governance of these organisations requires every aspect of current good practice governance. You need passion for the purpose, strategic thinking, analytical, communication and general knowledge skills. You must be able to assess risk, be aware of legislation, set and measure KPIs, know when to dip your fingers in the gearbox and, more importantly, when to keep them out. For many organisations, the greatest governance need is to build the brand – the organisational reputation.
How different are these governance skills to those required for commercial enterprise? There is no difference. As Collins says, the bottom-line focus is different – commercial is profit, community good is performance of mission – but the governance skills required to get there are the same.
Many not-for-profit boards do better job of governance than their commercial counterparts. They are often more aware of what they don’t know and more enthusiastic about adopting current good governance practices.
Why, if you are successful professional director would you serve on community-good board?
Firstly, there’s the benefit and satisfaction of giving something back to the community. Most community-good boards can’t afford director remuneration so it is voluntary commitment. Providing you serve an organisation with which you have empathy, even couple of years of service may bring about substantial change in the success of the organisation.
Secondly, it broadens your director skill base. Being director of not-for-profit can be very intimate experience bringing you face-to-face with new stakeholder groups with very different expectations to commercial stakeholders.
If you are an aspiring director keen to serve on commercial board, but handicapped by lack of experience, why would you serve on community-good board? Provided you serve on board that has adopted current best practice governance and is committed to regular governance training, you’ll learn the art of governance while simultaneously making valuable contribution to the community.
How do you get onto community-good board? There are wide variety of such boards – local boards such as the sports club, an early childhood service, school board of trustees, arts and cultural organisations, mental health providers, as well as regional and national boards. The Charities Commission (www.charities.govt.nz) has register of more than 25,000 charities. From time to time they all look for directors.
Tony Hassed is governance consultant and can be contacted at [email protected].
