About 31% of Australians volunteer, contributing around $290 billion to the economy, according to Volunteers Australia. It’s a huge amount a free time that is essential to the survival of many not-for-profit organisations, before they even consider the prospect of changing up to thrive.

Within the community of volunteers is a cohort of directors, sitting on boards and committees of an estimated 600,000 community entities. These range in size from organisations with a budget of a few thousand dollars to multi-million dollar national and international charities.

Contrary to the common belief about directors clad in ‘chalked’ pinstripes and closeted in digitally enabled boardrooms with 360-degree panoramic views of our city skylines, most directors in Australia - certainly those in smaller not-for-profit organisations - are unpaid, fuelled only by passion and a strong desire to contribute to community and cause.

They usually parachute into their roles to support an organisation strapped for cash, people and infrastructure. The best-practice governance that they may have learned through directors’ institutes or universities almost immediately goes out the window, as directors are obliged to put shoulders to the wheel to support an overstretched, often underpaid CEO and a handful of loyal staff.

It sounds dire, but it’s not. These volunteer directorships are generally very fulfilling unless you fall victim to internal politics and powerplays which, believe it or not, can still prevail within a group of a dozen well-meaning people.

Many of these organisations are also making a good fist of governance, financial management and other matters essential to the integrity and sustainability of their organisation and their brand reputation within their communities. What you encounter will range from simply having a constitution to having a dozen or so professionally prepared governing policies added to the mix.

Whether you choose to join a volunteer board will be influenced by some degree to the level of sophistication and risk with which you are comfortable. If your prospective board has limited governance maturity, but is prepared to commit to continue improvement, it’s usually a good sign that the organisation is heading in the right direction.

This partly defines the subject of this article. An uplift in standards of governance, financial accounting and reporting and other tools of the trade enabling directors to fulfil legal, fiduciary and moral obligations requires a massive time investment. If you’re the only one of a few directors with any knowledge and/or training in what needs to be done, you can kiss goodbye to the idea of the oft-touted ‘two hours a week’ commitment typically associated with these gigs.

This still leaves one of the biggest challenges in smaller enterprises untouched - maintaining a proper relationship and involvement with the CEO and day-to-day operations.

As previously noted, small not-for-profits are resource-poor relative to their aspirations. The CEO is often the executive team. So frequently, circumstances demand that directors step over the divide between board and management to pitch in. This is something you won’t find much guidance on in the courses offer by the Australian Institute of Company Directors (AICD) and similar bodies.

I believe that one of the most critical governance documents in the small not-for-profit armoury is the Delegations Policy. This must go beyond prescribing limits to financial authority and should also cover how the relationship between the board and, in particular the Chair, and the CEO will be managed.

One mechanism I have found useful is to prescribe that directors should not get involved in management and operations unless specifically requested to do so by the CEO. This ensures that the CEO’s domain is protected from undue interference by over-enthusiastic board members and especially that employee reporting lines and connection with the CEO are not confused by director involvement or communication.

In an optimal environment, communications between the board and the CEO should be via the Chair or, if otherwise, with the Chair’s prior consent. In practice, this rarely happens in small not-for-profits. The Chair is often also a volunteer with a day job and it is impractical for all communication between directors and the CEO to be channeled through or approved in advance by the Chair.

This means that the Delegation Policy may direct that authority to communicate with the CEO extends to key office holders, potentially the Treasurer, Secretary and, if required, Deputy Chair. This is useful because the very nature of a small not-for-profit often means that the CEO is dependent upon the skills, knowledge, experience and, not least, enthusiasm of the Treasurer to be a defacto CFO and, similarly, the Secretary a General Counsel.

It is why it is important that not-for-profits try to appoint a skills-based board. This recognises that the board’s breadth of knowledge and experience will not only enable better board strategy and decisions, which is the priority in a major listed enterprise, but also supplement and complement organisational capability and capacity from top to bottom.

So where does this leave us with the time commitment?

Now serving on two not-for-profit boards, I have quickly discovered that deferring any not-for-profit board participation until the conclusion of my professional and executive career was wise. For those who don’t place such a high price on the almost mythical work-life balance and/or who have aspirations to build a greater board career, this will not apply.

The time commitment in the not-for-profit space for those who genuinely want to have a positive impact and make a difference to the organisations they join is minimally three or four days a month - sometimes more for office holders. This does not even include any time for community engagements.

Conversations about joining a board should fully examine the maturity of the board and organisation in terms of its governance and financial management relative to what you believe you’re comfortable with and/or are prepared to help evolve.

They should include an evaluation of the skills and experience of others around the table. Gaps in the skills matrix may be the ones you will have to fill, each consuming a bit more of your time.

Beyond the board, try to understand organisational capabilities and needs at an operational level relative to strategy (if there is one) and aspirations. As a not-for-profit director, there’s a better than even chance you may be expected to help augment any shortfalls.

A realistic assessment of all these things will inform the level of commitment needed. If you feel you cannot meet it, then best not to take the job on, as joining the board it will only end up in a world of pain and disappointment for you and the organisation.

Photo by Kevin Ku on Unsplash