The importance of effective governance for NFPs

By Matthew Pringle - April 30, 2020

Not-for-profit (NFP) organisations that emerge from the current environment stronger or with their operating capabilities intact will likely have a stronger communications strategy, more resilience, the ability to pivot and strong crisis response and management skills. The key opportunity that comes from developing these capabilities is ensuring the governance framework effectively embeds these capabilities in the organisation for the long-term, not just in a crisis.

Effective governance structures are critical for organisational strength

Typically, governance structures are rigid and ruled by history, law and a “business as usual” model. In today’s environment, however, business as usual isn’t an option due to the fast-changing nature of business and the world. An NFP’s governance structure needs to establish the foundations for long-term strength, by considering four key factors: safety, decision making, communications strategy and recovery.

Safety

Employee safety is always crucial, but never more so than in a health emergency situation. To address the fast-changing safety requirements while continuing to deliver services, boards and senior management need to think flexibly, ensuring changing community and organisational needs and circumstances are addressed. This also includes recognition that sticking with existing ineffective policies and protocols is a key business risk which could jeopardise long-term viability.

Physical health and safety

For employees required to continue face-to-face interaction with stakeholders during COVID-19, a large and strategic organisational investment in tele-servicing or protective clothing, and no-touch practices will need to be rapidly implemented. Think about how the leadership team and other relevant stakeholders will be empowered to make decisions to ensure the safety of people and update governance structures accordingly.

Mental health

Mental health throughout the lockdown phase is also a more pressing matter with the usual face-to-face support networks and interaction of an office environment missing. Consider how to ensure people get the support and connection they need to look after their mental health.   

Health and safety governance

New ways of identifying, managing and addressing health and safety issues require fast action and new systems and processes. Clear structures around who is responsible for developing and implementing these new systems and processes.

Decision making

Three key factors in organisational decision making need to be monitored throughout this time – delegation, flexibility in management and control and access to information and people. The considerations that need to be made around these factors include:

  • Delegations: Assess whether current delegation processes are still appropriate in the circumstances and decide if new groups need to be formed. For example, management or board sub-committees.
  • Flexibility in management and control: Reporting to boards, meeting frequency and decision-making powers all need to be considered with a mind to what will work in the present circumstances. Blind insistence on maintaining pre-COVID meeting schedules, information requirements and decision-making protocols will place enormous pressure on already stressed and stretched resources and often won’t work. Recognition of the current challenges and temporarily putting scaled down processes in place will be key to remaining agile and keeping people engaged.
  • Access to information and people: Technology in this environment is crucial for effective access to information and people. The level or lack of investment in the right technology and systems will be telling in how well many NFPs cope. Some NFPs have older legacy systems in place, so the concept of a mobile workforce, remote online meetings and mass staff communications will be challenging. Ensure appropriate preparations are made for this extended period of isolation, compared to a short-term disaster recovery plan.

Communications strategy

Regular, open and honest communications to employees, the board and to relevant external suppliers and stakeholders is key to remaining operational and building a strong foundation for the future. Silence, even if hiding bad news, creates uncertainty and doubt as to the organisation’s future and the capability of the management team and board to cope with this crisis. Think about how the organisation will deliver bad news or approach sensitive topics by taking the time to confirm key messages and the organisation’s position on complex issues so your messaging is cohesive.

Recovery

Thinking beyond current challenges can be difficult, but it’s not just the present crisis that’s important. Consideration needs to be given to what the organisation will look like on the other side. Most organisations have well-developed disaster recovery and crisis management plans, but very few pay attention to what happens after the crisis has passed. It is naïve to think that a pre-COVID business plan and budget will remain relevant, which means now is the time to prepare for the recovery phase.

All indications to date are that, economically, it will be a long and slow recovery. For many NFP organisations demand may be immediate and substantially increased as communities, businesses and services re-open. Identification of these possible impacts and opportunities and adapting business plans accordingly will determine how well your organisation emerges, or rebounds, from this crisis.

Strengthen current operations and your long-term strategy

Getting the foundations right with effective governance structures will help bring all the capabilities developed through challenging times into building strong foundations for the future.

Discuss your organisation’s strategic direction during and beyond COVID-19, with one of our NFP specialists.

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