I recently attended the Inaugural Professorial Lecture at RMIT University. Entitled ‘Non-profit Boardroom Corporate Governance: An Insider View’ and given by Professor Lee Parker of the School of Accounting, it was an eloquent appraisal of the challenges and context of governance in the non-profit sector.
Parker’s “insider view” arises out of his research methodology, in which he obtains permission to attend and observe board room meetings in various not for profit (NFP) organisations. Perhaps this is why, in my opinion and in the opinion of others who attended the lecture and with whom I chatted afterwards, Lee’s explication of context, conditions, strengths and weaknesses of NFP boards was spot on.
I have spent most of my life working in the NFP sector, first in the arts industry, then in the tertiary sector and lastly in the community sector. As a youngster I was not interested in what was happening in board rooms, seeing boards as collections of figureheads – human trophies saying “rhubarb, rhubarb” – while people like me got on and did the real work. It was only at one point, when I was working closely with an underperforming board that had a positively delinquent approach to governance, that the importance of board performance really came alive for me. It was a horrible experience, like watching a car wreck happen in slow motion, and being able to predict what parts would smash next, but being unable to do anything about it.
It did do me the favour of bringing the whole subject of governance alive, of transforming it from an academic subject stored in the archives in my head to appearing as a dynamic living paradigm at work. I came to see how it fed into, informed and sustained the shape, tenor, rhythms, and activity of an organisation’s culture, strategy, plans and protocols; in the case of poor governance the affect was absolutely toxic.
Not all NFP boards in my career, and certainly not in the sector, were as bad as the one I mentioned in the paragraph above. I felt that Professor Parker was able to offer a nuanced explication of board performance in the sector, identifying patterns of recurrent problems and strengths in an even handed manner while leaving his audience in no doubt of the serious challenges NFP boards face. The passion and dedication to a cause that many NFP board members feel was mentioned several times; the unfortunate tendency to micro manage operational staff or recruit under skilled board members was also identified as something some NFP boards tend to do.
When I mention my NFP experience to people who have never worked in the sector I often encounter reactions that can only be called patronising. People mean well, they think they are being kind when they smile and say that they think that NFPs do wonderful work, but they often let slip that they think the work sounds kind of hokey, simple, cute, undemanding, uncomplicated. “Cruisey” was how one person described my work in the organisation which had the board I described above. I used to feel like I had received a psychic pat on the head for being so earnest and good, but there was something so dismissive in their tone and attitude, sometimes in their words. Running a neighbourhood house, a community development program, producing a theatre show? What could be so hard about any of that? What could I possibly know about real grown up work, real strategy, planning, financial management, marketing, operations, or stakeholder management?
If you want a white knuckle ride through the world of governance go run a small community or arts organisation for a year or two, or just sit on one of their boards. To make the experience especially juicy, to get those adrenalin glands really pumping, choose one with an inadequate budget and a shrinking pool of funding.
I simply loved it when Professor Parker said that he thought that NFP organisations were more complicated to run than for profit organisations.
One reason for this, and Professor Parker enlarged on this during his lecture, is that NFP organisations have to answer to more constituencies, and their agendas, than do their for profit brethren. From memory of Parker’s lecture, and from my own recollection, these constituencies may include the disadvantaged cohort that relies on the NFP organisation for services, funding bodies (government and / or philanthropic), perhaps corporate partners or sponsors, perhaps communities of individual donors, regulatory bodies, any other NFP organisations they may be partnering with, and, if the organisation offers any fee for service components, paying customers. From my experience, too, I can report that if the NFP organisation offers several programs as part of answering a community need, then each program may carry its own mix of these constituencies.
Working in the NFP sector did me some favours. It taught me how to manage relationships (actually one of my favourite areas of work) and how to work in complex conditions. Good NFP board members are worth their weight in gold; board experience gained from working with a well lead and managed NFP organisation is valuable and rewarding, and well worth enduring any hair raising episodes to get.
Professor Parker was kind enough to give me permission to link to his RMIT Inaugural Speaker Handout for this lecture.