Building Effective Non-Profit Governance

1. Building Effective Non-Profit Governance Cathy Brothers, CEO, Capacity Canada cathy@capacitycanada.ca Friday, May 17, 2019

2. What is ‘good’ governance? Accountable Transparent Bylaws and legislation are followed The ‘right’ things are done for the right reasons Equitable and inclusive Responsive Participatory

3. Board principles Directors are collectively accountable Decisions can only be made as a group All directors are equal but some have additional duties

4. Roles of the board Strategic direction and monitor performance Financial and risk oversight Stakeholder linkage Self-governance ED / CEO oversight

5. Strategic direction / monitor performance Rooted in mission, vision, values Articulated through a strategic plan Includes: what good, for whom, at what cost? Monitor: Execution of the plan Progress toward meeting objectives

6. Financial and risk oversight Budget, capital and investment status Performance reporting and monitoring Risk identification and assessment Insurance and audit

7. Stakeholder linkage To gather information To give information To build relationships

8. ED / CEO Oversight Establish performance measures Succession planning Clear distinction of board and ED / CEO roles

9. Nose in, fingers out

10. Decision-making authority

11. Role of the ED / CEO Reports to board With the board, sets strategy and vision Ensures organization is well run Oversees all operations and staff Ensures board: Has enough information to do their job (oversight) Understands the risks Spokesperson for the organization

12. Duty of Care Act honestly Be diligent and obedient Acquire knowledge and information Attend meetings Exercise judgement and vote

13. Governance as Leadership: Fiduciary Duty of Care Duty of Loyalty Duty of Obedience

14. Duty of Loyalty Place organization’s interests first Do not take advantage of position Maintain confidentiality Avoid and disclose conflicts of interest

15. Conflict of interest Avoid both actual and appearance of conflict Conflict of interest policy should be signed by all directors Challenging for ‘representative’ directors Applies to committee work as well All directors responsible to keep this in check

16. When a conflict exists Declare the conflict as soon as possible Secure agreement on how to proceed Record the conflict in the minutes

17. Duty of Obedience Know and obey laws Comply with letters patent, bylaws, resolutions

18. Governance as Leadership: Strategic Role shifts from power of oversight to power of ideas Engage in strategic thinking: What is the future of the organization? What organizations are similar to us and what are they doing well? What would we like the organization to look like in 5 years? 10 years?

19. Governance as Leadership: Generative thinking Not straight-line thinking Confront complex issues; not looking for the ‘right’ solution Creative, intellectually playful Ask catalytic questions not operational ones

20. In summary: A good director Disclose relevant conflicts Apply duty of care Act in the best interests of the organization Use good judgement in decision-making Keep current on relevant issues Attend meetings and come prepared Participate and make a significant contribution