Securing the Futuretogether!

What we will be doing tonight.

1. Reviewing the 7 key responsibilities of a Board and the feedback you provided in relation to each.

2. Considering a range of recommendations in relation to each area.

3. You will be providing input to the Draft 2013-2014 Strategic Plan to reflect the key priorities of the SAISF.

4. You will be prioritising strategies to support the drafting of the new strategic plan.

2nd Commandment: No legal advice, just information!

Good Governance is pretty basic.If we apply common sense, it falls into place!

Good GovernanceA ‘principle driven approach’ to bridging the gap between what ‘must’ be done, and what ‘should’ be done, for the good of the organisation and its owners.

Good Governance

I’m not sure if that would work in our Federation!

Where are you going?

Is it the right Mission?

Mission Statement

To be an Association for the advancement of ice sport in SA

• To provide a centralised voice to represent the ice sports in SA

• To acquire, provide, establish and improve organisations and facilities for sporting, social and other benefit of members

• To resolve disputes involving any member or members of the Federation.

• To manage and co-ordinate the raising of finances in support of these objectives.

• To do all such things as are incidental or conducive to the attainment of the objects of the Federation

Revised Mission Statement

To be an Association for the advancement of ice sport participation and access in SA

• To provide a centralised voice to represent the interests of ice sports within SA

• To acquire, provide, establish and improve facilities for sporting, social and other benefit of members and the general public.

• To maintain a viable business entity for use by the members and the general public.

• To manage and co-ordinate the raising of finances in support of the SAISF objectives.

• To do all such things as are incidental or conducive to the attainment of the objects of the SAISF.

Traditional Federated model

International Federation

National Federation

State Associations

Clubs

Individual participants

International Federation

National Federation

State Associations

Clubs

Individual participants

Facility Management Committee

Single Governing entity.

Principle. That management powers be formalised, disclosed and placed in a board• which has the power to exercise all the powers

of the organisation, • except those powers that the Act or Constitution

requires to be exercised in general meeting.A governance structure featuring both a board and another body, whereby this other body (usually called a council) assumes some board functions is contrary to this principle.

Good Governance outlines 7 MAJOR RESPONSIBILITIES OF A BOARD

Get the Structures right Ensure good Processes Set the Strategic Directions

Direct the General Manager

Monitor the Organisation

Reporting to theMembers & Stakeholders

Take responsibility for the Culture

1.Establishing the LEGAL, GOVERNANCE & MANAGEMENT STRUCTURES

Membership Structure

Management structure

Governance & Board Structure

Management Committees

Volunteers

Governance Committees

The Constitution should be an ‘enabling’ document!

The Constitution is the system of fundamental laws and principles that prescribes the nature, functions, and limits of your Association as laid down by the Registering body.Incorporating separates the individual person (member) from the entity and makes the group (body) a single entity with certain rights and legal protections as well as some additional obligations.

Other matters relating to day to day issues on how the Board operates, how the organisation functions and the policies are best separated and placed in a:• Board Charter, • Business Plan• Policy Manual.

1. Board Policies2. Operational Policies3. Sport Policies (Public documents posted on your web site.)

Don’t panel beat it, replace it!

What do we know about NFP Boards?

PassionateLong history

Strong networksWell respected

Strong character

Inexperienced Limited finance skills

Fixed positionsPoor decision making skills

Reactive

ProfessionalConsultativeCollaborative

InformedProactive

Good Governance is about tipping the balance!

Strengths Weaknesses

Let’s bust a Major Myth!

The Federation is the Controlling body. It has the POWER! Truth:

The owners have the power and they give Authority to the Board.

2.ENSURING EFFECTIVE GOVERNANCE PROCESSES

Board Evaluation

Board Agenda 3 levels of policyBoard Solidarity

Ideal Board• Displays Leadership, Integrity & Good

Judgement.• They use these three attributes to ensure more

effective decision making. • They ensure the Federation demonstrates

transparency, accountability and responsibility.A Governing Board in the eyes of the law is viewed as a legal person - but only one legal person, which means that it can only have one opinion at a time.Board Solidarity is critical.

CORPORATE GOVERNANCE MANUAL

Broadly speaking, a Governance Manual ensures that Directors are aware of their responsibilities to:• act honestly, in good faith and in the best interests of the organisation

as a whole. • have a duty to use care and diligence • recognise that the primary responsibility is to the organisation as a

whole but may, where appropriate, have regard for the interest of all stakeholders of the organisation

• not make improper use of information acquired as a director • not take improper advantage of the position of director • properly manage any conflict with the interests with the organisation • understand they have an obligation to be independent • understand it is improper to disclose confidential information , or

allow it to be disclosed, unless that disclosure has been authorised by the Board.

• not engage in conduct likely to bring discredit on the organisation • understand they have an obligation at all times to comply with the

spirit, as well as the letter, of the law and with the above principles

Recommendation: Appoint 1 Director to take responsibility for ensuring this document is implemented….. And support them!

Independent DirectorsWhere an organisation is large enough to draw on people to offer their services, the preferred option is to install Independent Directors.It is important that there be clear descriptions of the roles and responsibilities of Directors.Remember: If you can’t BE independent, you must ACT independently!

Board Sub Committees• Audit and Risk Committee

• Finance Committee

• GM Performance and Remuneration Committee

• Governance Committee

GOVERNANCE COMMITTEEAs a matter of principle, the board should commit to the ongoing development of both the board as a whole, and individual directors (including the chair).

The Governance Committee ensures the Board has a Charter, role descriptions and supporting policies in place.

As well, the board each year should undertake to review and evaluate its collective, and the directors’ individual, performance including the effectiveness of the chair, to ensure they are discharging their responsibilities against the stated objectives.

The committee may also assist in attracting suitable candidates via a nominations process

Corporate Governance Committee CharterThis charter documents the authority, composition, function, procedure and assessment of the SAISF Board Governance Committee. 1. General Scope and authority 1.1 The SAISF Corporate Governance Committee (‘Committee’) is a committee of the SAISF Board (‘Board’) established under the auspice of the SAISF Constitution. 1.2 The purpose of Committee is to assist the Board to fulfil its corporate governance and oversight responsibilities in relation to: • compliance with directors duties; • compliance with the SAISF Constitution• assisting with director induction and other professional development programs for the board, in conjunction with the

Chairperson; and • matters of corporate governance generally. 1.3 The Committee reports to the Board and recommends appropriate actions emanating from the activities or reviews it undertakes.

2. Composition and nomination2.1 The Committee consists of at least two and not more than five members. 2.2 The Board shall nominate the Chair of the Committee. The Committee must include a minimum of one (1) director, whose minimum qualification must include completion of the director induction. 2.3 Appointments of other Committee members, not being the Chair, will be appointed by the Board in consultation with the Committee Chair. 2.4 Appointment of other Committee members, not being the Chair, will be for an initial term of two (1) year. 2.5 Membership of the Committee shall be reviewed every year, or earlier at the direction of the Committee Chair. 2.6 The Committee Chair may invite appropriately qualified persons to attend and sit on the Committee. 2.7 The Chair of the Board may sit on the Committee ex officio. 2.8 The SAISF GM or his or her nominee, may sit on the Committee ex officio.

3. Committee Functions

3.1 The Committee’s function will include: – provision of advice to the SAISF Board and management on matters of corporate governance directly concerning the

SAISF; – provision of advice to the SAISF Board and management on matters of corporate governance; – undertaking review of the SAISF’s internal procedures and best practice; – supervising the maintenance of relevant documentation, registers and books of the SAISF; – assisting directors and the Board generally with induction and other professional development, in conjunction with

the Chair of the Board; – reviewing and investigating any matter referred to the Committee by the Board concerning corporate governance or

the regulatory compliance of the Board or the SAISF; and – report to the Board and recommend appropriate actions in respect of the above functions.

3.2 In undertaking any of the above functions, the Committee may inform itself on any matter in such manner as is consistent with its terms of reference. 3.3 The Committee may, within its financial delegations, obtain external professional advice in respect of any matter relevant to its functions. Such advice is to be made available to the Board as a whole. 4.Meetings4.1 The Committee shall meet and adjourn as frequently as it decides, but will meet not less than two (2) times each year. 4.2 Meetings may be held in person, by telephone or by contemporaneous audio (or audio and visual) communication. 4.3 Notice of each meeting confirming the date, time, venue and agenda must be forwarded to each member of the Committee in the week prior to the date of the meeting. The notice to Committee members will include relevant supporting papers for the agenda items to be discussed. 4.4 The Committee may obtain professional external advice within the bounds of its financial delegations.4.5 The Committee may meet with external advisors in the absence of management or other members of the Board. 4.6 The Committee Chair, or his or her delegate, shall report to the Board at the next Board meeting following the Committee meeting. 4.7 Minutes of proceedings and resolutions of Committee meetings shall be kept by the Committee secretary. Minutes shall be distributed to all Committee members and the Board, following the approval of the Committee Chair. 4.8 Any person may be invited to attend meetings of the Committee, but not necessarily for the full duration. 4.9 At the discretion of the Chair of the Committee, separate meetings may also be held with any member of management or other external parties that may have information that is relevant to the functions of the Committee.

Skill based nomination process.Before a vacancy arises, proactive Boards are looking for potential candidates to fill those positions.They have conducted a skills audit, identified where the current skill sets lie and identified any gaps to match the work that is forecast for the coming year. They then approach people directly to invite them to nominate for the vacant positions.

Director Evaluation Major focus

Q1 I know and understand my role and legal duties as a company director

Q2 I contribute to the development of sound strategies

Q3 I actively support the company’s mission and vision

Q4 I actively review and monitor the strategic issues that are critically important to the success of the company

Q5 I have a sufficient understanding of the market in which the company operates

Q6 I keep abreast of trends and issues affecting the market in which the company operates

Q7 I ensure that I have reviewed all Board papers prior to the meeting

Q8 I actively contribute to the financial discussions

Q9 I am aware of my financial accountability as a director

Q10 I am fully aware of the financial state of the company

Q11 I bring valuable experience to the board

Q12 I actively contribute to the effectiveness of the board

Q13 I use my network of contacts to assist me in my role as a director

Q14 I am prepared to volunteer to sit on Board Sub Committees

Q15 I maintain the confidentiality of the Board

Q16 I ask probing questions to ensure I fully understand the issues being discussed

Q17 My contributions are succinct and to the point

Q18 My contributions are valued by my fellow board members

Q19 I am prepared to undertake relevant professional development

Q20 I maintain good relations with colleagues

Q21 I communicate openly and honestly

Q22 I am committed to doing my best for the company

Q23 I share information willingly

Q24 I listen attentively to the ideas of others

Q25 I have no actual conflict of interest with the company

Running a SEE meeting

If you run a Short, Effective and Enjoyable meeting you are more likely to encourage people to switch off their phones and switch onto the meeting agenda!

Cater for people to participate in your meeting via Telecommunications.

Ensure your Constitution, Board Charter and Committee Terms of Reference allow for meetings via telecommunications.Invite people to participate via phone for all or part of the Board or Committee meetings.(Noting that everyone needs to be able to hear each other!) • Keep a record of the meeting!

Set up your Board/Management committees for success!

People sit on your Board committees with a variety of responsibilities. The aim is to get them to do their work outside the actual meeting and bring their findings to the meeting (not debate them when they arrive!)

A well structured Committee can deal with the issues more effectively and efficiently.Papers presented are either; for Approval (which means there is a recommendation) , for Discussion (alerting to an issue or seeking guidance), or an Update (which is for information only.)

For this to work the sub committees must have terms of reference and delegations, which clearly outline the extent of any decision making authority they may have.

The principle is: Committees are Advisory and the ultimate responsibility rests with the Board. (The same applies for Management committees where the responsibility rests with the GM.)

Reports are not read out!Reports are sent/brought to the meeting with the action cover sheet. They report against progress, not activity!

Board Report____________ Cover Sheet: Date______

Strategic Area:_____________________________Approval Discussion UpdateOverview:

Recommendation:

Attachments: Yes ______________No Signed:____________Outcome:_______________________________

Sample Agenda format:

AGENDA (ASSOCIATION) NETBALL COMMITTEE TO BE HELD ON (DATE & TIME)VenuePresentApologiesMinutes of Previous MeetingBusiness Arising from Minutes of Previous MeetingCorrespondenceGeneral Business• Matters for Approval• Matters for Discussion• Matters for Noting• Other BusinessDate for next meeting.

Sample Minutes format:MINUTES OF (INSERT ORGANISATION NAME) BOARD MEETING HELD ON (INSERT DATE)PRESENT(Insert who is present).APOLOGIES(Insert apologies)MINUTES OF PREVIOUS MEETINGMoved (insert name), Seconded (insert name) that the minutes of the previous meeting, (insert last meeting date) be confirmed. Carried. BUSINESS ARISING FROM MINUTES OF PREVIOUS MEETING(Insert business arising or NIL if none) CORRESPONDENCEInwards: (insert list) Outwards (insert list) GENERAL BUSINESS• Matters for Approval• Matters for Discussion• Matters for NotingOTHER BUSINESS(Details of item)NEXT MEETING:(Insert date of next meeting)MEETING CLOSED (insert time meeting closed)

Consensus decision making

The majority of decision making at a Board or Committee meeting can be addressed by the Chair adopting a consensus model.The Board resolved to…Where the implications of a particular decision have the potential to make a significant impact on the viability of the organisation, a poll may be called and voting recorded accordingly.

Remember- You are a Director 365 Days a year!

BOARD BUDDIESOne of the biggest complaints made against peak bodies by the members is that they are not consulted, and not informed about what is happening.

SAISF Director

Board Buddies ProcessI encourage boards to ask themselves two questions at every board meeting:“How well have we consulted with the owners?”“How well are we keeping the owners informed?”These two questions keep the communication issue front of mind.

A practical step that boards can take to ensure they have the information to answer these questions is to implement a Board Buddy system of communication. The members are divided between the directors (excluding the chair) and they each undertake to contact their respective ‘Buddy prior to, and post each meeting for the year.

Prior to every board meeting each director:• Provides a copy of the proposed agenda via email• Seeks the views of the member in relation to the items listed for discussion. This can be done via

email or a phone call.• Asks if there are any other matters the member/s wish to have raised on their behalf?At the board meeting the chair has, as a standing agenda item, a Board Buddy update where they systematically go around the table and:• Check that each director has made contact with their respective member.• Asks if there are any matters related to the listed agenda?• Asks if there are any other matters that have been raised and these are listed in General Business.

(It is expected that each Director will give their best endeavour to this process.)

I can hear readers saying that they should not be releasing copies of the board’s minutes and I agree with that. What I do suggest is that the board prepare, as part of the meeting process, a Board Update which identifies the outcomes/resolutions of each agenda item (noting previous provision for treatment of confidential matters) and this is agreed to as the official public document for distribution to members. This is also noted in the Board Minutes.

After the meeting, each director:• Contacts their respective member/s and provides a copy of the Board Update, which should also

address any specific matters that the member may have raised.• Sticks to the script. This is not a time to breach board confidentiality and start relating who said

what! It is also critical to protect board solidarity, and that a decision of the board is binding on all directors to support it once it has been resolved. (The fact that the individual director may not have supported it in the meeting does not give them license to disclose this or to speak against a board decision once they are out of the meeting. Directors are directors 365 days of the year and they need to honour their obligation to the board and their fellow directors.)

It is expected that the member/s who are contacted by each director would act in a consultative manner with their own directors/committee members (if they have these to report to) and ensure they were consulted and informed about the process each step of the way.

Experience has shown that by implementing this relatively simple procedure the lines of communication open, suspicion is reduced and effective governance can flourish with the support of the membership.

Annual Board CalendarThis would cover topics such as:• A schedule to review all policies • Financial reporting schedules • Board performance review • General Manager performance appraisal process • Annual review of the organisation’s strategy • Preparation for the annual general meeting • Any changes to personnel on the board or in key management

roles • Consultation with key stakeholders • Meeting the external auditor • Signing off on the annual report • Key events such as State championships • Other matters as required.

Policy Bank

3 Layers of policy

1. Governance policies- How the organisation is governed.2. Management policies- How the organisation is managed day to day.3. Sport policies- How the sport is administered and played, including how people are to behave.

3. Setting the strategic direction of the Organisation.

What really matters?

Don’t let the tail wag the dog!

Short term issues

Long term viability

Time to throw the switch!

Plan the work, work the plan

The Strategic Plan

The Strategic Plan feeds the Business plan for the Federation and it outlines what the members want the Federation to achieve in the future.

“Organisation’s perform better when they have a realistic and achievable plan written down.”

You can’t hit a target you cant see!

3 Year Plans Vs Rolling Plans• Your plan will take as long as it takes.• Until you have written it, you won’t know what

time frames are involved.• If you regularly review and update the plan, and

it becomes a living document, it will guide your organisation’s work.

S.M.A.R.T Planning

• S- Specific• M- Measurable• A- Achievable• R- Realistic• T- Time linkedWe plan to be in a new, wholly owned facility by 2015.

Identify the big ticket items?Key Strategic priorities:1. Increase our participation in Skate school for

2013/14 by 10%.2. Complete a Governance review of our Federation

this year.3. Host the ZXC Competition for 2014.4. Increase our Income by 10% per year over the

next 3 years.5. Implement a maintenance plan immediately to

ensure our facility meets agreed operating standards.

List the top 3 strategic goals you want SAISF to achieve in the coming year.

# 1.

#2.

#3.

Breaking down the priorities-

Increase our Skate School participation numbers by 10%.

• Conduct a survey to create base line figures.

• Identify target areas for strategy implementation

• Create a ‘Come and Try’ program and develop training for club coaches.

Host the ZXC Competition.

• Prepare bid document.• Review current competition

schedules to ensure available time and space to host.

• Establish Competition management sub committee.

• Prepare best and worst case budget scenarios

Strategic Priority:

Background: (Why is this a priority- tell the story.)

Outcome: (If you are successful, what will it look like. Be specific and give details or examples.)

Strategy: (Outline the big ticket areas or tasks that will be undertaken. If there are multiple elements then outline them.)

Resources/budget: (What assistance, money or resources do you need to make this happen?)

Stages and time frame: (How long will it take. What are the stages and are their multiple parts to it?)

Milestones-results: (What will we see in the short to medium term and how will this be reported?)

The Board completes the following 3 statements for each strategic priority:

1. By the end of 2013/14 we will have achieved….

2. You will know we have achieved our goals because……

3. To achieve this we need….

Reporting against the Key Priorities

Skate School Participation

Governance Review

Host the ZXC Competition

Income increase by 10%

Coaching Courses

Maintenance plan

Activity

Progress:

Issues:

Action:

Tracking sheet- Date_________

Risk Management

Risk Management

Step 1: Risk Identification Step 2: Risk Assessment Step 3: Risk ManagementList all possible risks

What is the likelihood of each one occurring?High /Medium /Low

What is the potential impact if it did happen?High /Medium /Low

What are we currently doing about it?

What more can we do about it?

When should this happen by?

Who is responsible to see that it happens?

Reviewed level of risk after treatment?H/M/L

1:

2:

3:

4:

5:

Current risks….

4. Directing the General Manager

Directing the GM Performance and Remuneration Review

Management Committees report to and through the General Manager

Board of Directors or a Management Committee?

Degree of separation

Noses in, fingers out!

YOUR MOST IMPORTANT RELATIONSHIP!

“A board has one function above all others — choosing, evaluating and, if necessary, changing the General Manager. This is by far its most important function; then it must decide what it will spend its time on and what it will leave to management.”Don Mercer, Chair, Australian Institute of Company Directors.

The Micro Manager Board

Board and GM relationship

The relationship should be close but not too close; it should be characterised by consistent support in public but candour in private.The Boards support should never go to the point at which responsibility for operational matters is removed from the General Manager.Both parties need to keep in mind that the General Manager is there to lead the [operational] organisation and to be accountable to the board for its performance.The GM is the sole employee of the Board and is responsible to the Board as a whole.The GM attends and participates in all Board meetings, but is not a voting member. (Exception is Performance appraisal discussions)Good practice would see the Board Secretary taking the minutes, not the GM.

GM Performance and Remuneration Committee

Because the GM is so central to the success or failure of the organisation, evaluation of the GM by the board is an important component of the board's responsibilities. Conducting a regular and scheduled evaluation, both documents the GM's achievements and identifies possible areas for development.Typically, a committee of the board leads the evaluation process, reports on the evaluation to the entire board, and recommends salary for the next year.

GM Performance Review and Remuneration Committee

Terms of Reference Committee Objectives The objectives of the GM Performance Review Committee are: • To assist the board to discharge its duty with regard to its employment responsibilities for the GM. • To make recommendations to the board in regard to remuneration and repayment of out-of-pocket

expenses for the GM.

Membership • The GM Performance Review Committee shall be appointed by the board from amongst board members

and shall consist of up to three members. • The Chair of the GM Performance Review Committee shall be appointed by the board. • A quorum shall be 2 members, one of whom shall be the Chair.

Operating Principles • The convenor shall call a meeting of the GM Performance Review Committee if so requested by the board

or at the request of the GM. • The business of the meeting shall be circulated at least three working days prior to the meeting. • The committee is authorised to obtain external resources as required to assist with its work. • The committee shall report to the board after each committee meeting or as specified or requested by the

board. Committee meetings shall be minuted, a copy to be tabled at the following board meeting. • Changes in personnel, roles or responsibilities shall be determined by the full board.

Responsibilities

The duties of the GM Performance Review Committee are as follows: • To make recommendations to the board on all matters relating to the GM’s employment contract; • To carry out a half-yearly and annual performance appraisal of the GM’s performance in a manner

consistent with the board’s governance policies; • To make recommendations to the board on matters relating to the GM’s salary, benefits and working

conditions; • To manage all the process entailed in engaging a new GM including succession and continuity planning or

the termination of the contract of an existing GM, including conducting the exit process; and • To make recommendations to the board on the payment of remuneration of the GM and to make

recommendations for new policy or review existing policy for the payment of out-of-pocket expenses to the GM.

Authority • The committee is authorised by the board to investigate any activity covered by its functions and

responsibilities. It is authorised to seek any information it requires from the GM who will cooperate with any reasonable request made by the committee.

• The committee shall have the authority of the board to obtain legal or other independent professional advice, and to secure the attendance at meetings of third parties with relevant experience and expertise if it considers this necessary.

• The GM Performance Review Committee shall have no executive powers with regard to its findings and recommendations.

5. CHECKING FINANCE, COMPLIANCE and RISK MANAGEMENT

Board Reports

The Finance report is explained and questions are encouraged.

Tell the story and let the numbers prove it.

A picture paints a thousand words, so use graphics if you can.The role of Treasurer is an ‘additional responsibility’ not a ‘sole responsibility’!

Financial Dashboards

BUCKET BUDGETING- Basic Financial literacy!

Fixed Income Fixed ExpenditureCash Reserves 10%

Fees, Grants, Sponsorship, Interest Rent, Ground Hire, Wages, Insurance, Affiliations

Net result + or - =$ (X)

Variable Income(Speculative)

Variable Expenditure(Discretionary)

Tied moneyDiscretionary Vs Non discretionary

Sponsorship, Grants, sales, etc Equipment, Trips, capital expenditure

Which bucket is this coming out of and do we have the money in the bank?

AUDIT AND RISK COMMITTEE

The role of an Audit and Risk Committee varies, but is typically to monitor and review, on behalf of the Board, the effectiveness of the control environment in relation to nominated functions which may include:• financial reporting, • legal/regulatory compliance, • fraud prevention and • risk management. Where an organisation has paid staff to manage the financial affairs the role of Treasurer can shift to Chairing the Audit Committee.The Audit Committee is also responsible for review of the performance and nomination of the external auditors.

Audit and Risk Committee

Terms of Reference

Committee Objective • The objective of the Audit and Risk Committee is to assist the board in discharging its responsibilities with respect to overseeing all aspects of financial

and non-financial reporting, control and audit functions.

Membership • The Audit and Risk Committee shall be appointed by the board from amongst board members or a suitably qualified independent Audit and Account

consultant and shall consist of up to three members. • The convenor of the Audit and Risk Committee shall be appointed by the board. • The majority of Committee members shall have strong financial skills including (1) the ability to read and analyse financial statements, (2) a good

understanding of business and financial risks and related controls and control processes (3) a sound knowledge of the business/area within which the organisation operates.

• A quorum shall be 3 members, one of whom shall be the convenor.

Operating Principles • The Committee may have in attendance such members of management and such other persons as it deems necessary to provide appropriate

information and explanations. • All directors shall be entitled to attend all meetings of the Audit and Risk Committee. • The Committee shall have the right to go ‘in committee’ as required. • The convenor shall call a meeting of the Audit and Risk Committee if so requested by any Committee member, the board, CEO or the external auditors. • The convenor shall draw up an agenda to be circulated at least one week prior to each meeting. The agenda shall be distributed to the members of the

Committee, the external auditors and other invitees. • The CEO, staff and the external auditors shall be given adequate notice of all meetings and shall have the right to attend and speak. • Meetings shall be held at least four times each year or as and when necessary. Meetings are to be held (1) at the planning stage of the external audit (2)

prior to the board meeting approving the annual report and financial statements (3) at scheduled times during the year in accordance with the committee’s planned programme.

• The Committee will develop an annual audit plan that shall be reviewed and authorised by the full board. • The Committee will give reasonable notice to management of its programme and requirements for access to key financial and other personnel and all

relevant records. • The Committee shall report to the board after each committee meeting or as specified or requested by the board. Committee meetings shall be

minuted, a copy to be tabled at the following board meeting. Additionally the Committee shall submit an annual report to the Board summarising the committee's activities during the year and the related significant results, findings and recommendations.

• The Committee shall annually conduct an assessment of its effectiveness and the contribution of individual Committee members. Changes in personnel, roles or responsibilities shall be determined by the full board.

Responsibilities

The duties of the Audit and Risk Committee are as follows: • liaison with external auditors; • review of the annual audit plan with the auditors; • review of audit findings and the annual financial statements; • review of accuracy of the financial and non-financial reporting to the board; • oversight of compliance with statutory responsibilities relating to financial and other disclosure; • review of internal financial systems and accountabilities; • ensuring that recommendations highlighted in the audit reports are actioned by management; • monitoring of corporate risk assessment and the internal controls instituted in response to such risks; • supervision of special investigations in areas of financial and non-financial performance when requested by the

board.

In addition, the Audit and Risk Committee shall examine any other matters referred to it by the board. Authority • The Committee is authorised by the board to investigate any activity covered by its functions and

responsibilities. It is authorised to seek any information it requires from the GM who shall co-operate with any request made by the committee.

• The Committee shall have the authority of the board to obtain legal or other independent professional advice, and to secure the attendance at meetings of third parties with relevant experience and expertise if it considers this necessary.

• The Audit and Risk Committee shall have no executive powers with regard to its findings and recommendations other than those bestowed by the board.

FINANCE COMMITTEE

The Finance Committee terms of reference includes the following:

1. Establish an effective policy framework 2. Engage in a deliberate planning process with management 3. Ensure that management has appropriate “systems and

processes” in place to manage the financial affairs of the organisation.

4. Ensure effective reporting processes are in place for management to report to the Board as well as for the Board to report to stakeholders.

5. Support the monitoring and compliance process (Audit & Risk committee) to ensure the process is working effectively.

Finance CommitteeTerms of Reference Committee Objectives • The objectives of the Finance Committee are: • To provide expert advice to the board both on the organisations financial performance in the current year and also the financial implications of any

future plan.

Membership • The Finance Committee shall be appointed by the board from amongst board members and executive finance Management and shall consist of up to

three members. • The convenor of the finance Committee shall be appointed by the board. • A quorum shall be 2 members, one of whom shall be the convenor, or his nominated delegate. • The majority of Committee members shall have strong financial skills including (1) the ability to read and analyse financial statements, (2) a good

understanding of business and financial risks and related controls and control processes (3) a sound knowledge of the business/area within which the organisation operates.

Operating Principles • The Committee may have in attendance such members of management and such other persons as it deems necessary to provide appropriate

information and explanations. • All directors shall be entitled to attend all meetings of the Finance Committee. • The Committee shall have the right to go ‘in committee’ as required. • The convenor shall call a meeting of the Finance Committee if so requested by any Committee member, the board, CEO or the external auditors. • The convenor shall draw up an agenda to be circulated at least one week prior to each meeting. The agenda shall be distributed to the members of

the Committee, the external auditors and other invitees. • The CEO, staff and the external auditors shall be given adequate notice of all meetings and shall have the right to attend and speak. • Meetings shall be held at least four times each year or as and when necessary. Meetings are to be held during the year in accordance with the

committee’s planned program. • The Committee will give notice to management of its program and requirements for access to key financial and other personnel and all relevant

records. • The Committee shall report to the board after each committee meeting or as specified or requested by the board. Committee meetings shall be

minuted, a copy to be tabled at the following board meeting. Additionally the Committee shall submit an annual report to the governing body summarising the committee's activities during the year and the related significant results and findings.

• The Committee shall annually conduct an assessment of its effectiveness and the contribution of individual Committee members. Changes in personnel, roles or responsibilities shall be determined by the full board.

Responsibilities

The duties of the Finance Committee are as follows: • Review and Monitor the organisations performance against financial benchmarks established by the board. • Review and advise the board on the organisations budget. • Review of the annual financial statements. • Review of accuracy of the financial reporting to the board. • Oversight of compliance with statutory responsibilities relating to financial disclosure. • Review of internal financial systems and accountabilities. • Review regular financial reports and where appropriate provide advice to the board on the implications of these. • Consider and make appropriate recommendations to the board on any matters having a significant financial impact on the organisation. • Advise the board on the short, medium and long term financial implications of the organisations plans. • Advise the board in relation to:

– I. The extent and adequacy of the insurance coverage at least annually. – II. The organisations borrowing program. – III. The Finance Management policy of the organisation.

• Advise the board in relation to any Capital expenditure programs and the planned monitoring process. • Receive and review the annual reports and financial statements of the organisations controlled and associated entities. • Consider any matters referred by the Board or CEO.

In addition, the Finance Committee shall examine any other matters referred to it by the board. Authority • The Committee is authorised by the board to investigate any activity covered by its functions and responsibilities. It is authorised to seek

any information it requires from the CEO who shall co-operate with any request made by the committee. • The Committee shall have the authority of the board to obtain legal or other independent professional advice, and to secure the

attendance at meetings of third parties with relevant experience and expertise if it considers this necessary. • The Finance Committee shall have no executive powers with regard to its findings and recommendations other than those bestowed by

the board.

FINANCIAL GOVERNANCE FRAMEWORK

BOARD•Ensure financial viability• Monitor compliance

FINANCIAL POLICIES and Delegations

FINANCIAL PLANNING

FINANCIAL MANAGEMENT

FINANCIAL REPORTING

FINANCIAL MONITORING &

COMPLIANCEAudit committee

FRAUD It can happen to your Organisation!

Your Organisation is vulnerable to fraud for at least three reasons:

The person responsible for collecting and disbursing funds is likely to be the individual who provides the financial reports.

Organisations tend to raise much of their funds in cash. Cash is more easily misappropriated than any other type of transaction.

Small non- profits are run by trusting and committed individuals. Sadly these individuals tend to be too trusting.

Address the issue of Fraud.

http://www.bdo.com.au

http://www.ourcommunity.com.au

It won’t happen to us!

6. REPORTING TO MEMBERS and STAKEHOLDERS

STAKEHOLDER RELATIONSHIPS

Aim is to have:• Clear lines of accountability and

transparency to members and stakeholders. • Identify your stakeholders through your

"circles of involvement" - starting at the centre with your Board, staff and consumers, and work your way out to members and donors, then out further to your partners, council, peak bodies, and so on.

• This will help you to be clear in your own mind exactly:

1. who you are planning for, and 2. what consideration you should give those

competing interests in making decisions affecting the group.

• Don't forget to take into account your legal and financial responsibilities.

7. Managing the Culture of your Organisation

As a Board your role is to Future proof your organisation for the members.

A word of warning!

THE ELEPHANT IN THE ROOM!

Member Protection Policy checklist

A key aspect of the prevention of discrimination, harassment and child abuse is the development and promotion of a written policy that makes it clear that these behaviours will not be tolerated under any circumstances.

Fundamental features of a policy to address the above issues include:

• Endorsement message/statement from the President and/or Chief Executive Officer• Statement on organisation’s attitude and objectives regarding discrimination, harassment and child abuse.• Statement that discrimination and harassment on any grounds listed in anti-discrimination legislation are against the law• Statement that child abuse is a criminal offence• Clearly worded definitions and examples of behaviour (types of harassment, discrimination and child abuse)• Description of who the policy applies to• Organisational and individual responsibilities for ensuring harassment, discrimination and child abuse does not occur within

the organisation• Where/how to get help if the above does occur• User-friendly complaints procedure• Commitment to prompt action when a complaint/allegation is made• Commitment to confidentiality• Appeals system• Standard of behaviour required by organisation (codes of conduct)• What a breach of the policy is• Likely consequences that can be imposed if the policy is breached.• Reporting requirements, if any.

The policy should be written in easy to understand language, be easily accessible and be communicated to all members and others to whom the policy applies.

The policy must comply with the requirements of the organisation’s constitution, By-laws, Memorandum and Articles of Association and/or other existing policies, rules and procedures.

There is a solution to most issues.

The Boards job is to find it!

Coach or Mentor?A mentor is like a sounding board, they can give advice but the Directors are free to pick and choose what they do. The context does not have specific performance objectives.

A coach is trying to direct the Board to some end result, the Board may choose how to get there, but the coach is strategically assessing and monitoring the progress and giving advice for effectiveness and efficiency.

Why seek external assistance?From experience, the reasons for engaging someone to work with your Board tend to fall into one of the following three categories:1. A well-established Board which is looking to take

their Board performance to a new level and they have an ‘appetite for change and improvement’.

2. A new Board which is looking to establish an effective foundation to guide its deliberations and ensure that all the ‘Directors are on the same page’ when it comes to their roles and responsibilities.

3. A dysfunctional Board which has lost its way due to internal conflict or external pressures and needs assistance to get ‘back on track’.

A final thought….

Any questions?

Thank You!Paul GroganManaging DirectorMDO Consultingwww.mdoconsulting.com.au

M- 04 67 63 23 03