Cultivate the courage to develop strong ethics

But the reality is that a good ethics and governance framework takes time and effort to develop, and its implementation begins at the top, at board level.

Ethical instincts go only part way to running a not-for-profit or community group that is transparent and accountable and delivers on its purpose.

Ethical issues are rarely straightforward and require discernment and judgement on the part of board members under the leadership of the chair.

Adjunct professor Susan Pascoe AM, the inaugural commissioner of the Australian Not-for-profits Commission, told Our Community Matters that a good ethical framework begins with the board’s own behaviour.

“What we’re looking for is values-based behaviours, consistency and the adoption of those behaviours.”

Ms Pascoe said this approach extends beyond simply modelling good behaviour, and she refers to the adage “the behaviour you walk by is the behaviour you accept”.

“It’s also about being clear about what’s not acceptable behaviour and what are the consequences of poor behaviour.”

This dynamic starts at the top: an ethical organisation requires a strong a relationship and shared values between the board chair and the CEO.

“It’s up to the chair to really model and lead what’s expected in terms of the decision making,” said Ms Pascoe, who is chair of the Community Directors Council.

“And that means that it becomes clear that the way the decisions are made is based on the purpose of the organisation, the mission of the organisation.”

“There's a trust that the community vests in them, that they're going to provide decent services, and to do it with a level of quality, safety and integrity.”

For organisations, this requires a laser-like focus on the way decisions are made: it must be ethical and based on good governance.

“That's really critical to the effective functioning and the long-term functioning of a not-for-profit and community-based organisation.”

Ms Pascoe speaks from experience.

She currently chairs the Australian Council for International Development, the Community Directors Council and is a member of the AICD NFP Chair’s Forum.

She is also a Board Member of Mercy Health, a Trustee of St John of God Health Care and served as the inaugural Commissioner at the ACNC from 2012-17.

During her distinguished career, she has chaired independent inquiries into the regulation of the NFP sector and indigenous employment and was appointed as one of three Commissioners on the 2009 Victorian Bushfires Royal Commission.

Ms Pascoe says while those at the top should lead by example when it comes to ethical behaviours, this commitment to doing the right thing must be embedded in the DNA of the organisation.

“It's not only that commitment: it actually requires a bit of courage.”