A typical non-profit organisation has the above structure, namely:
- Members/ citizens/communities/government – that is , those individuals or groups who have determined there is a need for a particular service that is best delivered through a non-profit organisation and structure;
- Board of Directors/Management – the members or founders elect a board of directors who are responsible for governing the organisation by acting on behalf of and in the best interests of the members at all times;
- The Chief Executive – the board in turn appoints a Chief Executive who is responsible for carrying out the directions of the board and managing the business on a day to day basis;
- Management/staff/volunteers – the Chief Executive the engages staff to deliver the services, again in alignment with the direction and philosophy as articulated by the board; and
- Clients/consumers – those people or organsiations who buy the goods and services as originally identified as needed by the members and founders of the organisation.
Good governance requires that the board has in place a means by which it can communicate its mission and then be able to monitor and evaluate performance to ensure long term viability, sustainability and achievement of their goals i.e. the reason the organisation was first started in the first place.
Whilst the illustrated structure is required to effectively manage the organisation and achieve this outcome, it is not without pitfalls which the board should be cognisant of and have in place a system to manage on an ongoing basis.
Here is a summary of both perspectives:
The benefits of a clearly defined and imposed internal communication policy include:
- Everyone should know the process and understand how it works;
- Clarity of the message – the less number of people who “pass on” the message, the less likely for it to be misconstrued along the way
- Separation of responsibilities, thereby reducing the likelihood of either the Board’s or the Chief Executive’s authority being undermined or diminished;
- Stops (or should) potential “meddling “by Board members in management; and
- Provides a generally accepted standard for governance and management.
There are however potential downsides to this approach, including:
- Filtering of information both up and down the communication channel – this may be either accidental or, for some ulterior motive, intentional, the consequence of either being generally detrimental to effective governance;
- If trust is lacking in the organisation or the “right” culture is not in place, this framework is likely to contribute further to this situation, rather than provide a means to make any improvements; and
- If the right information is not going up and down the organisation, then the opportunity for “bad” decisions to be made by the Board is greatly enhanced.
To assist in reducing the risk of the downsides overriding the benefits of the preferred communication channel, here are a few strategies that Boards could adopt during the year:
- Invite senior managers to present to the Board during the year – this will allow the Board to interact with staff other than the Chief Executive and provide the Board with an opportunity to re enforce its position on particular issues/polices;
- Conduct site visits around the organisation, “meet and greet” sessions to better understand the operations of the business and again reinforce priority areas and the board position on particular matters;
- Undertake staff surveys on an ongoing/rolling basis over the year – have the report made direct to the Board;
- Implement and communicate a Whistle Blowers policy and if someone enacts the policy, do something about it; and
- Seek formal and informal feedback from stakeholders i.e. customers, funding bodies, volunteers. Monitor all complaints and treat all as an opportunity to evaluate and improve performance.
In makes sense to have a meaningful structure in place to manage the business and the organisation. It all makes sense to implement appropriate policies, procedures and management systems to provide some degree of comfort to those people that have been elected by the founders that the reason for the organisation being established in the first place is actually being delivered to the clients/consumers for whom it was originally created. As the organisation grows, this task becomes more difficult and the founders can become further removed; it is incumbent upon all levels of the supply chain to recognise the associated risks with growth and ineffective communication and create the right culture to ensure alignment between intentions and delivery. This is a core requirement for good governance.
Share this with your friends