Improving the effectiveness of NFP Boards

msi - NFP boardsBy Mark O’Connor, Cutcher & Neale, Accountants, Newcastle.

Organisations in the NFP sector vary greatly in terms of the nature of the services they provide, their size, scale and management structures.

One commonality across all organisations is the responsibility vested in the governing board or committee.

Director Obligations

This responsibility is enforced by law under the Australian Charities and Not for profits (ACNC) Act 2012. The ACNC requires a minimum set of governance standards to be adhered to by registered organisations. One of these standards addresses the ‘Duties of Responsible Persons”.

How to meet your duty as a responsible person?

Board members are charged with ensuring that the financial affairs of the charity are managed responsibly. The Board can demonstrate its oversight through consideration of the information provided by management in Board Reports.

We review many board papers and the best reports are concise in terms of reporting issues and actions but provide the necessary information to provide context and support the recommendations made by Management.

The best reports also anticipate the questions that will be raised by directors and provide the relevant information in advance of the meetings.

What content to include:

  • Agenda
  • Minutes of previous meeting
  • Documentation to support items for decision
  • CEO/Management report
  • Sub -committee reports
  • Financial reports
  • Other reports: such as Compliance schedule, Risk report

Some organisation’s form sub-committees to deal with topics which may require specific skills or experience such as finance, risk management or fundraising. Whilst this structure is adopted by most large organisations, small and medium organisations often address issues as a full Board. In this case we suggest your Board meetings include a specific topic that provides the Board with a focus for each meeting. The focus areas should be mapped back to any governance or charter documents to further demonstrate the Board’s discharge of its responsibilities.

The following calendar of topics would address most Board responsibilities and would need to be supported by the relevant documents or management reports in advance of the meeting.

February Strategic Plan – review progress this year and discuss year ahead
March Strategy linked to service delivery
April Property and Insurance review (align with policy renewals)
June Annual Financial Budget
July Executive Management Appraisals, HR Policies, Volunteer Management
August KPI review, as developed from the budgets, strategic plan
October Annual Financial Report
November WHS review, Management Presentation
December Risk Review, Board Policy Review, Board self assessment and skills analysis


The benefits of an organised Board Pack, robust reporting systems and quality information is reflected in the Board Room discussions. The Board can focus on exceptions, opportunities and strategy development whilst engaging with the organisation’s management on the most important issues and not getting bogged down in the detail.

In reviewing your board information we suggest asking the following questions to assess the quality and completeness of the information provided to the Board.

  1. Can I understand and trust the information received?
  2. Is the information current, complete and does it address critical issues?
  3. Is the information presented in a clear and concise format that is easy to understand?
  4. Does the information include historic and projected results to help assess risk?

If you could use some expert advice to improve the effectiveness of your Board meetings, contact one of the MSI Global Alliance offices for a review of your current reporting and governance systems.

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