Good governance is easy to recognize when things are going smoothly. But when they’re not going well it can be difficult to determine where the problem lies. How can organizations ensure that they’re governed well? A good start is to ensure that you have a strong board of directors who understand their role and obligations to the organization.
Each group involved in a non-profit organization – board, management, staff, volunteers, donors – plays a part in the governance system. However, the board’s role is often the role focussed on when discussing good governance. In the non-profit sector, governance usually refers to the actions of the volunteer board of directors of an organization with respect to establishing and monitoring the long-term direction of that organization. The board is the body which bears the ultimate responsibility for the organization – it is the responsibility of the board to oversee the conduct of the organization and to supervise management which is responsible for the day-to-day conduct of the organization.
Good governance requires the correct mix of board members. When recruiting new board members a good starting point is to ask what your non-profit needs to advance its mission now and in the future. It is important to have a clear idea of what experience your organization needs on the board: financial expertise, strong connections in the community, familiarity with the individuals served by the organization, or strong connection to the organization itself. It is also important to ensure your organization reflects diversity. The recruitment process requires both vetting of candidates and cultivating the interest of potential board members. Some organizations find that asking potential board candidates to first serve on a committee or task force or volunteer for the organization in another capacity can be a way to find a good fit for both the organization and candidate.
Non-profit governance has a dual focus: achieving the organization’s mission and ensuring the organization is viable. Good governance forces organizations to develop sound organizational plans and strategies. It also requires organizations to review their operations for effectiveness and efficiency. Directors have a legal and fiduciary responsibility, and they also have a responsibility to ensure that the charitable vision and goals of the organization are being carried out. The board must act within the law and follow three basic principles: diligence, loyalty and obedience. Volunteer Canada (www.volunteer.ca) offers a resource to inform board members of their legal duties.
Donors expect accountability by their organizations. Having a strong board of directors in place that has a clear understanding of their roles and responsibilities is a great place to start.