The 16th iteration of AICD’s governance study reveals that nearly three-quarters of NFP directors see their organisation as still effective in achieving its purpose.
The Australian Institute of Company Directors (AICD) Not-for-Profit Governance and Performance Study 2024-25 highlights a resilient sector amidst mounting governance challenges, particularly in climate and technology.
This year’s study has revealed that while 74% of NFP directors discuss environmental, social, and governance issues annually, more than half of boards (55%) have yet to take any steps to address climate-related risks and opportunities.
“Against a backdrop of continued uncertainty, this study confirms that governance maturity is strengthening, with organisations proactively addressing key risks such as climate governance,“ AICD Not-For-Profit Lead Phil Butler said.
The NFP sector also faces significant challenges in understanding and managing cyber security risks, as well as exploring and anticipating the potential opportunities and threats of utilising artificial intelligence (AI).
Nineteen per cent of organisations reported experiencing a cyber security breach in the past year, with the highest incident rates in social services (25%), health and residential aged care (22%), and education (21%).
While AI adoption remains in its early stages with less than 10% using it regularly, three-quarters (75%) of directors see AI’s potential to improve productivity while 62% believe it can enhance client services.
“As the risks associated with climate change, cyber threats, and AI continue to evolve, it’s crucial for NFP directors to foster a proactive governance culture that addresses these challenges head-on,“ Butler noted. “As governance expectations grow, the AICD remains committed to equipping NFP directors with the skills and resources needed to lead effectively.”
Read also: Rural NFP leaders offered governance training opportunity
Geraldine is currently the Content Producer for Third Sector, an Akolade channel. Throughout her career, she has written for various industries and international audiences. Her love for writing extends beyond the corporate world, as she also works as a volunteer writer at her local church. Aside from writing, she is also fond of joining fun runs and watching musicals.
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