Board directors must be the eyes and ears of association members…
Governance of organisations is currently under public discussion in Australia. A far-reaching Australian Government Inquiry officially entitled the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry is a necessary investigation into unethical practices and poor regulation of these sectors.
The Royal Commission has addressed issues that will impact on the associations sector. One of these issues is board composition – who should be on a Board of Directors? How are the individuals selected? And by whom?
The term ‘skills-based board’ is commonly used (and Board Directors should certainly have skills), but the term is sometimes used as a way of politely implying that boards elected by the membership have no skills – thereby supporting a system of allowing a select group ‘hand-pick’ directors from outside the association “because they will have skills”. However, many question: “How can educators, clinicians, tradespeople, artists or small business owners possibly know about governance?”
Associations often have a democratic process of election that allows members to vote for whomever they like, regardless of skills. It is good that the people elected are usually active members of the association and care deeply about the industry, profession or cause. Whilst they may not have textbook skills or governance qualifications, their subject matter knowledge will be extensive and their passion and motivation to become a director will be strong.
Once a CEO has been appointed by the board, the CEO must employ professionals with the skills to do specific tasks. Association CEOs will not employ finance managers without accounting skills or sponsorship managers who cannot understand the needs of suppliers and sell to them.
Board directors are the eyes and ears of the members. They will usually come from the membership and understand the expectations of and growth opportunities for the profession, industry or cause. Being on the board of an association requires wisdom and oversight, including not being tempted to delve into operational matters.
There is a role for one or two non-member Board Directors. Including non-member directors can offer a ‘fresh approach’ that can transform inwards culture to make associations more engaged, informed and professional. But the majority of directors should also have years of knowledge of the profession or industry that can be supplemented by induction and ongoing training.
Association boards need training on their role and responsibilities. As Associations Forum regularly provides governance training to association boards, we understand that genuine enthusiasm and care for the association can be supplemented by tailored training.
We conclude this article by emphasising that boards must be wise – in this context, capable and alert. Directors must have the ability to give advice and know their role – which is strategic and not micromanagement. Judgment, wisdom and nous are essential attributes to have on a board that is vigilant and questioning yet also supportive and positive. Such a board will employ a CEO who will hire skilled staff.
John Peacock is chief executive officer of Associations Forum, a member-based network of 500 associations, charities, clubs and non-profit societies across Australia, New Zealand and Southeast Asia.