Pushing back against the compliance machine

When did being a not-for-profit board director become so boring? Most people don’t join a board because they’re excited about reviewing delegations, debating committee terms of reference or working their way through a technicolour risk register. They join because they care about the cause, and because they have expertise, experience, networks and perspectives that can add real value. So they take on the responsibility of stewarding an organisation they believe matters. Yet somewhere along the way, they start having to spend an inordinate amount of time ticking compliance boxes. I think we’ve started to confuse practising good governance with doing more governance.

Over the past few months, I’ve been working with national peak bodies and organisations in the health, disability, domestic violence, sexual violence and family violence sectors, and I’m seeing a pattern. Sometimes it feels as though 90 per cent of the available oxygen is being consumed by the machinery. We’ve become so focused on governing correctly that we’re leaving little time for governing meaningfully.

When the foundations become the entire building

Good governance matters enormously. Financial oversight, risk management, safeguarding, regulatory compliance and accountability are essential. However, governance processes are supposed to be the foundations that enable good decisions. They’re not the purpose of the board.

Increasingly, I’m seeing the foundations become the entire building.

I see capable directors spending hours working through technicolour risk frameworks that tell them everything that could possibly go wrong, but surprisingly little about the strategic risks worth taking. I see boards reviewing policies year after year without always being clear about what has materially changed. I see committees being restructured, then restructured again, in the hope that a different configuration might somehow unlock better governance. And I see overworked directors wondering whether they’re really adding the value they thought they would.

Meanwhile, strategy gets relegated to a once-a-year planning day. Everyone gets together, has a terrific conversation about the future, agrees on some priorities, and then returns to another 11 months of business as usual.

But strategy, like maintaining positive cash flow, is a continuous responsibility. The role of a not-for-profit board is to steward an organisation and safeguard its purpose: to test major choices, navigate uncertainty, oversee performance and sustainability, and ensure resources are being used to achieve the organisation’s purpose. That means asking not just “Are we operating appropriately?”, but also “Are we making the difference we exist to make?”

Are we still relevant? What is changing around us? What assumptions are we making? Where should we invest? What should we stop doing? Are we ambitious enough? What difficult decision are we avoiding? These are the conversations that should make being on a board challenging, stimulating and, dare I say it, joyful.

Let’s reimagine the board table

There are organisations taking radical steps to change the way they are governed.

UK cosmetics company Faith in Nature changed its governance arrangements to give nature a voice and a vote on its board, represented by a director responsible for bringing the interests of the natural world into decision-making.

British interiors company House of Hackney, a B Corp, has taken a similar approach, bringing the interests of not only nature but also future generations explicitly into its governance.

Imagine having someone around your board table whose job is to ask: what will the consequences of this decision be for people who aren’t even born yet?

These examples challenge our assumptions about whose perspectives belong in governance, and they put purpose at the centre of decision-making. They also prompt a great question for every not-for-profit board: if your organisation exists to make a difference for a particular community, whose voice is missing from your boardroom conversations?

I recognise that most of us aren’t at the point of throwing everything out the window and completely redesigning our governance structures, though, so if these ideas resonate but you’re wondering what you can actually do at your next board meeting, I’d start smaller.

Five ways to make your next board meeting less boring

1. Put strategy first. Literally. Look at your next agenda. Where does the strategic conversation sit? If it’s item 12, after the minutes, finance report, committee updates and policy approvals, it’s clear what you need to do. Try starting every meeting with one substantive strategic question. What’s changing that could affect our strategy? What are we learning about our impact? What decision are we putting off?

2. Make constructive disagreement someone’s job. One of the most common challenges I encounter when facilitating boards isn’t conflict. It’s the opposite. Everyone is lovely. Everyone wants to be supportive. Nobody wants to be difficult. Borrow from Edward de Bono’s Six Thinking Hats. Allocate directors different perspectives: opportunity, risk, evidence, lived experience, future impact. Rotate the roles. Now disagreement is part of the process, and the discussion is better for it.

3. Stop asking for updates. Start asking for judgement. Too many board papers tell directors what’s happened without making clear what the board is supposed to do with that information. Every substantive paper should answer three questions: What do we need to know? Why does it matter? What do we need to do next: make a decision, or provide guidance, a challenge or an assurance?

4. Change who speaks. Having diverse skills around the table means little if the same three people dominate every conversation. Give people time to think before a discussion. Invite quieter directors in first. Ask everyone to contribute before returning to those who have already spoken. Ask: What are we overlooking? If the people we exist to serve were sitting here, what might they challenge?

5. Ask whether the meeting actually added value. Finish with five minutes of reflection: Did we spend our time on the things that matter most? What conversation should we have had that we didn’t? Not just: Did we finish on time? Ask whether the organisation is better off because the board met.

Get the foundations right, then trust them

None of this is an argument for less rigorous governance. In fact, it’s the opposite. You should invest properly in your governance foundations so you can trust them and stop constantly talking about them.

This doesn’t necessarily mean you need more governance documentation. For most not-for-profits, I’d want confidence in a handful of things: clear board and management roles and decision rights; a concise and coherent governance framework; proportionate risk and assurance processes focused on material issues; useful reporting against strategy, performance and impact; capability-led board recruitment and succession; and clear processes for accountability, conflicts and escalation.

I’m fortunate to sit on the board of a large hospital foundation, where we’ve worked hard to make our governance arrangements both rigorous and practical. We meet as a full board quarterly, supported by committees that do more detailed work within clear remits. We’ve honed the information we receive from the executive so it focuses on what directors actually need to know. And, importantly, we have a clear and measurable strategic plan that our board agendas and reporting align to.

It’s not radical, but it works, and it means the board can maintain appropriate oversight without every director needing to spend every meeting in the weeds. It leaves more room for the collective experience around the table to be applied to the decisions, opportunities and challenges that matter.

Remember what you came here to do

I worry that we’re unintentionally making board service less attractive at precisely the time when the sector needs thoughtful, capable and committed directors. We ask people to volunteer their time, bring their expertise, accept significant responsibility and help organisations navigate enormous change. Then we give them a 150-page board pack and ask them to approve another three policies.

This is going to result in a boring meeting, but worse, in lost opportunities for shared insights and rigorous discussions. Good governance should create the conditions for sound judgement, responsible ambition and meaningful impact.

Compliance should give boards the confidence to be courageous, not become a substitute for courage. So next time you take your seat at the board table, perhaps ask one simple question: Are we spending enough time doing what we actually came here to do? Being a director should be serious, challenging and rewarding work. But it really shouldn’t be boring.

About the author

Felicity Green has dedicated her career to helping bold leaders create strategies for a better world. She has spent the last decade advising clients across the Not for Profit, government and philanthropy sectors, running social impact consulting teams from the helm as CEO. With an MBA from Peking University, multiple not-for-profit board positions and recognition in the Telstra Business Woman of the Year Awards, she has a proven track record of innovative strategic thinking that drives tangible impact. With particularly deep experience in gender equity, the arts and philanthropy, Felicity is known for her ability to craft crisp strategic narratives and facilitate powerful partnerships.