Some not-for-profits problems have no solutions

Borthwick Chris Jul2019lg

In this help sheet series, Our Community’s resident agony uncle, Chris Borthwick, offers answers to frequently asked questions about issues not-for-profits are facing.

Agony Uncle reflects on a common misapprehension: that the law has consequences, and that the regulator is there to get involved in your committee’s squabbles.

In my capacity as first responder here at the Institute of Community Directors Australia, I’ve received three queries in the past few days that have all shared the same basic misapprehensions about the law. Specifically, people – board members, members of the organisation, office bearers – think that the law matters a lot more than it actually does.

Most of the time in not-for-profit governance, of course, as in life as a citizen, most people follow the rules most of the time because it’s easier that way and they don’t care all that much. Many people care a little, but if things don’t go their way they’ll shrug and move on, or out. When people care a lot, however – for selfish or unselfish reasons, it doesn’t matter – we move to a new level where things can’t be taken for granted.

People tend to think:

  • that the answers to procedural questions are to be found in the Act, or at least in the constitution.
    This is very seldom true. Both the Act and your constitution hit the high points and expect you to fill in the rest based on what seems a good idea on the day. On the down side, you can’t just turn to the index and find the answer to your question. On the up side, if you decide to do what you think is best, nobody can prove you wrong.
  • that if, unusually, someone does something that is a clear breach of the Act or the constitution, this “ illegality” means that they can’t do it.
    Right? Wrong? Who cares? The question that comes up here isn’t, unfortunately, “Is what they did illegal/unconstitutional?” The question is “Given that they’ve just done it, what’s going to stop them getting away with it?”
  • that if someone has breached the constitution, the authorities will step in and back up the rest of the committee.
    Dream on. The police are interested only to the extent that it involves the possibility of someone going to jail, which is a very high bar indeed. All the NFP regulators are unanimous that any constitutional dispute is a purely contractual issue to be decided within the organisation and none of their business. You’re on your own. You can take the offender to the courts (No! No! No! Don’t do it!) or you can sort it out face to face.
  • that the chair, board or general meeting has the authority to tell the wrongdoer to stop it and follow the rules.
    Well, yes, the chair, board or general meeting has the same authority to tell the disruptor to follow the rules as a parent has to tell a three-year-old to stop throwing a tantrum: uncontested, but curiously irrelevant.
  • that there’s a way around not having the votes.
    If the constitution is unarguably on your side, that and $4.50 will get you a cup of coffee. If you want right to prevail against injustice – if you want to reverse the wrong, or expel the wrongdoer – you can move a motion in the board, or in a general meeting, if you have the votes. If not, not.
  • that dispute resolution procedures resolve disputes.
    Voluntary mediation procedures work well when you’re dealing with people who are fair-minded, open to compromise, and without personal investment in particular outcomes. This describes virtually none of the people who become involved in disputes that are serious enough to warrant mediation. At best, these rules provide a cooling-off period; at worst, it’s time spent turning up the flame under a saucepan of milk.

A quite understandable reaction to that depressing list is to say “You’ve told me what doesn’t work. What does work?” The one infallible rule here is that once a dispute has gone toxic there is no infallible rule for unwinding it. Every untroubled NFP is alike, as Tolstoy almost said, and every troubled NFP is troubled in its own way. It’s certainly worth considering compromising, splitting the difference, or ignominiously giving in, but even that’s not always guaranteed to end it. Personalities are primary, rules are at best secondary.

I certainly think it would be nice if acts, constitutions, bylaws, rules, policies and commandments were self-enforcing, and those who broke them were struck down with great vengeance and furious anger. I have to acknowledge, though, that the universe has other views. Some problems have no solutions, only consequences.

Ask Agony Uncle

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