Introduction to the NFP quarterly newsletter

The Australian Institute of Company Directors is committed to assisting Not-for-Profit organisations improve their corporate governance.

We recognise that good governance is critical in organisation’s achieving their objectives and are excited to be launching the not-for-profit (NFP) newsletter.

Over the last 12 months the AICD has continued to expand its resources for the NFP sector. In addition to the extremely popular NFP Governance Principles and Guidance publication, and the annual NFP Governance and Performance Study, our NFP portal contains a swathe of NFP director tools which provide practical guides to many of the common issues facing NFP organisations.

The purpose of this newsletter is to share relevant, timely information specifically for those governing NFP organisations, while also providing some thought provoking pieces.

In this first issue we bring you the latest insights into remuneration of directors in the sector drawing from AICD’s recent research. The AICD has been investigating the prevalence of remuneration of NFP directors over a number of years, however this is the first comprehensive research undertaken. Not surprisingly, it is the larger NFPs which are paying directors, however it is also worth noting that many organisations are having the conversation regarding remuneration and whether it is appropriate for their circumstances.

This issue also explores the term “not-for-profit” and whether it is an appropriate term to describe the extremely diverse range of organisations in the sector. The 2016 NFP Governance study called on NFP’s to make a profit and build financial strength and yet the sector is defined by what it is not designed to do. In exploring this theme we recognised that there was a wide variety of opinion from both those within the sector and from those not directly involved.

A critical duty for directors of all organisations is the oversight of financial performance and the current review of accounting standards will be important for directors to grasp. In particular the issue of revenue recognition and the treatment of grants causes confusion for many.

And finally, the AICD has long recognised how important the NFP sector is to our society and the economy. Further proof of this came from the excellent Australian Charites Report produced by Commissioner Susan Pascoe and her team at the ACNC. The charity sector alone employs over 1 million people and has a turnover of over $130 billion. If you add to this the more than 3 million volunteers, it is apparent just how large and vital the sector is.

I trust that you find the information useful and would welcome any feedback on the current issue and also suggestions for future topics.

As part of our ongoing commitment to sector, AICD is staging two half day NFP Forums in 2017. To be held in Melbourne on 23 May and Perth on 25 May, these events will bring some of the latest issues facing the sector to the fore. These events will be extremely popular, so book in early to avoid disappointment.