EVOLVING CHAIR: Working Smart on NFP Boards

Smart recruitment and a strong strategic plan are the hallmarks of a successful Not for Profit board, says Joanna Andrew in this month’s featured Evolving Chair.

Joanna  Andrew is a partner of the Adelaide law firm Mellor Olsson Lawyers. She holds a number of director positions in the Not for Profit and Government sectors, including Chairman of Julia Farr Association, (a social purpose organisation working to assist people with disability) Julia Farr Housing Association and Brain Injury Network of SA.

Andrew is a non-executive director of Uniting Communities, Crime Stoppers SA and Adelaide and Mt Lofty Ranges Natural Resource Management Board. She is also a facilitator for the Australian Institute of Company Directors.

What attracts you to a Not for Profit or for-profit board?

Business is an integral part of my professional life. I feel enormous satisfaction in being part of an organisation that has a clear strategic plan that is centred around sound growth and strength. Not for Profits are businesses. This is not to be forgotten. I would always encourage directors to devote their time to an organisation that aligns with their values.

Is gender balance an issue for your board? Do you prioritise it?

In an ideal world the gender debate should be a non-issue. I appoint directors based on skills and competence. It is pleasing to see many women undertaking courses such as the AICD Company Directors course and consequently there is a greater representation of women on boards.

Do you have any advice around governance?

Good governance is the key to an organisation's success. Without a functioning board that understands its role clearly, the organisation will never reach its maximum potential.

A good board does not micro-manage, is transparent, has a clear delegation policy, develops a strong strategic plan for management to enforce, has a good understanding of its environment, its risks and opportunities and provides the CEO with support and coaching. That is, asking the relevant probing questions, but at the same time providing the freedom to perform.

The failures of corporate governance are widely known. I cannot stress enough how integral good governance is to an organisation.

Do you have any advice around the Board's relationship with the Chief Executive Officer?

This question flows nicely from the previous, as without good governance the relationship between the Board and CEO will most certainly break down. The Board's relationship and, in particular, the Chair's relationship with the CEO is arguably the most important relationship within an organisation. This is across the board in any sector. The relationship must be centred around confidence, transparency and trust. A hostile relationship between the Board and CEO will consume the organisation and until it is resolved by mediation or ultimately removal, it will have a negative impact on all aspects of the business.

Do you have any advice around risk management?

It is for the board to oversee the risk management function or tool effectively and with insight.  It is up to the CEO to manage it.

The role of the board in relation to risk management has dramatically increased over the past decade largely due to legislation, case law and regulations that have increased the exposure of directors. This is clear in areas such as Work Health Safety, Consumer and Competition laws and Environmental Laws.

Therefore, depending on the industry within which you operate, depends on what your risk management focus will be.  Know the risks relevant to the industry your board operates.

Do you have any advice on sustainable business/organisation models?

My advice is to be flexible. Have a strong strategic plan and as a Board be very smart in the recruitment of your CEO. This is arguably the most important decision that will determine the success of an organisation. A good CEO appointment will allow the Board to govern. A bad appointment will inevitably result in a board that has to micro-manage, spend valuable time on issues of operation as opposed to strategy and governance and will inevitably have a dramatic effect on the business sustainability, let alone success.