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Not-for-Profit Governance Study results revealed

Originally published on 5 November 2014 on Associations Forum.

After surveying more than 2 700 directors of not-for-profit organisations, the Australian Institute of Company Directors has released the findings of Australia’s biggest study on not-for-profit governance.

The NFP Governance and Performance Study was conducted by research firm BaxterLawley and found that more than 30 per cent of not-for-profits have discussed mergers in the last 12 months in order to improve efficiency and expand services.

“The results of our study show that not-for-profit boards have extremely high standards of governance that allow directors to pursue the strategies that will achieve the best outcomes for their organisations and stakeholders,” said John Colvin, CEO and Managing Director, The Australian Institute of Company Directors. “Around 80 per cent of non-executive directors who participated in the study believe the quality of governance in the sector is better than it was three years ago.”

Despite this, the study also found that only 50 per cent of non-executive directors believe their organisations measure overall performance effectively. Many would like more non-financial indicators to determine if the organisation is achieving its purpose.

Another key finding is that many not-for-profit organisations are struggling to determine the impact of reforms, or proposed reforms, to government policy and legislation.

“Not-for-profit boards, like those in other sectors, require stability in government policy to be confident that the decisions they make will no be compromised. Uncertainty about potential reforms has a significant impact on a not-for-profit’s ability to plan for the future, to secure appropriate resources and to maintain the required number and composition of staff,” said Mr Colvin.

The study also found that over 30 per cent of boards are planning to change one of more of their governance documents in the next year and that more than 60 per cent of directors believe the that relationship between boards and CEOs is positive.