Newly Appointed as a Director or Officer for your Association, Society, or Non-Profit Organisation
By Nick Koerbin
Taking on a new role as a director or officer in an association, society, or non-profit organisation is an honour and a responsibility. Here
are essential considerations to ensure effective and accountable governance from day one:
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Financial Sustainability: As a newly appointed director, your first and foremost responsibility is to ensure the
financial sustainability of the association. This involves confirming that the organisation is not trading while insolvent or at immediate
risk of insolvency. Request access to financial documents such as the balance sheet, profit and loss statement, and the annual report.
Obtaining a copy of the latest audit report (if an audit has been completed) from an independent auditor, is also advisable to clearly
understand the organisation's financial standing.
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Where is the Strategic Plan? Another crucial aspect of your role is ensuring there is an active and
robust strategic planning process in place. This is important as it guides the association's decisions and actions. Directors must ensure
that their choices align with the strategic plan, demonstrating a thoughtful and informed approach to organisational growth. A lack of a
clear strategic plan often indicates decisions are being made without a thorough review, potentially leading to uninformed risks.
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Ensure adequate insurance coverage.
Review the association's insurance policies to confirm they are
comprehensive and up to date. Standard policies may not provide sufficient coverage for all operational risks. Assess whether the
insurance includes coverage for regulatory fines, determine the total coverage amounts, and check for recent claims. An annual
review of insurance is essential to managing any emerging risks effectively.
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What are the Board Policies? An association board should have updated policies that govern delegation, board conduct,
grievance handling, privacy, and more. As a new director, it's crucial to familiarise yourself with these policies, as adherence is critical
for effective governance and to mitigate personal liability. If these policies are outdated or not reviewed regularly, they could expose the
association—and directors—to unnecessary risk.
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Ensure Compliance with the Constitution As a new director, understanding and adhering to the Constitution is a
primary responsibility. Access the latest version of the Constitution and confirm that it aligns with the one lodged with ASIC or the
relevant state regulator. The board or committee must operate within the framework of the Constitution. Non-compliance could lead to
serious legal ramifications for the association and its directors.
In Summary
Becoming a director on a board offers a unique chance to serve the members of your professional or business community while gaining
invaluable insights into board operations. The experience and skills acquired in this role will support your association's mission and
contribute to your growth as a knowledgeable, capable leader in the non-profit sector.
