Finance: Clarify your position

By Jeremy Tauri


Lots of people volunteer their time to be on boards, whether it's serving a community organisation or running a company.

But the boards of community organisations often find themselves acting more as another volunteer than a true board member and, in doing so, can do a disservice to themselves and the organisation.

The two roles are very different and it often takes a second to realise and determine where you're sitting in terms of your role.

If you do take some time to step back and think about whether you are governing or actually involved in the day-to-day "doing", you can probably determine ways your organisation could function more effectively.

The CEO of our Northland chamber of commerce dropped me a document outlining the importance of good governance in an organisation.

It says governance can be defined as the policies, institutions, mechanisms and practices by which an association is directed and controlled.

Having a flick through this document it's a reminder that strategic planning is what sets the long term direction for an organisation. A governance board will provide this.

It might be easier to say governance is what an organisation would like to achieve and management is then the day-to-day operation of how to achieve it and is involved in the doing process.

Good governance will give direction, resources and feedback to management.

The line between management and governance can sometimes be blurred.

Many boards spend many hours doing what is essentially management work.

This is especially true of smaller organisations that have smaller resources.

Keep the two separate. If you're helping out in a volunteer capacity that's okay, but ensure this doesn't become the norm for board members.

As you grow you will find an organisation, its members, its clients and its staff need to know what the big picture vision is. If they are working in their true governance roles, the board members will be the people they look to, to provide this.

Board meetings need to focus on governance issues.

The institute of directors has some good information on its website about corporate governance at www.iod.org.nz.

 

- Hamilton News

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