Creating a strong governance for charitable purposes
Martin Laverty, CEO of the Royal Flying Doctor Service, speaks about how to create a strong board within NFPs
How do you create governance for social good within a structure that was designed to protect the interests and capital of owners and shareholders?
Martin Laverty, CEO of the Royal Flying Doctor Service, has identified some of the key issues that many working in the NFP sector face, especially those who work with, or are on, a board.
Speaking at the Third Sector Live conference in Sydney, Laverty argued that the underlying issue that NFPs face is that many must work within a structure that is not fit for purpose – and issue that every board must tackle.
So the question is what is the best way for a NFP Board to function? What should the make-up of the board be?
Laverty, who also have a PhD in organisational governance, said that a Board doesn’t benefit from having experts in a field, if those individuals are not also invested in the social good which the organisation is trying to achieve.
Breaking down the structure of the board and trying to identify the differences in how it needs to function versus how a board should function, helps to identify whether or not it is functioning as it should. He argued that a NFP has to support a strategy guided by multiple principles; social good, the needs and expectations of donors, the needs of clients, volunteers and staff.
According to Laverty every board member, regardless of their external experience must, in his words, have skin in the game. They must be invested in the strategy and social outcomes the organisation is trying to achieve – without that they are just passengers.
Laverty’s suggestions for how to ensure a board stays relevant to the mission of an organisation may not work for all organisations, but they can certainly help challenge the fixed ideas many have as to a board’s structure and purpose.
Perhaps Laverty’s most pertinent point is that a board and its members must always speak, act and live the mission of the organisation.