The Gardener or the Lawyer? Who to Call First When Making Governance Change in NFPs

Not-for-profit governance is awash with change in Australia. Some organisations are moving from being incorporated associations under state law to Companies Limited by Guarantee under the Commonwealth’s Corporations Act. Others are replacing representative boards with skills-based boards. And still others are investigating ways of replacing old federated structures with new national ones. As any lawyer can explain, these changes are all relatively easy to make from a structural point of view. However, without proper consultation, many of these proposals will fail. If your organisation is considering making some changes to its governance system, you might want to think first about the consultation process you will use to get your proposed changes embraced by the membership and approved at the next Annual General Meeting.

While shareholders in a for-profit company, might be relied upon to vote for any change that will result in greater profits (or lower costs), the members who ‘own’ not-for-profit organisations might use a more complicated calculus. Members care about many and varied issues inside not-for-profits. So wouldn’t it be prudent to consider the impact that proposed changes might have on the mission of the organisation and the members who are so devoted to achieving it?

To view the Better Boards article in full, click here.

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