Friday, February 15, 2008

How well does governance of your not-for-profit rate?

What is the purpose of having a governance group? There is only one answer to this question. The purpose of the governance group is to set strategy and hold the management team accountable for implementing that strategy.

Governance is a planning process. Governance is about bringing together all the elements required to ensure an organisation is moving in the desired direction. Governance is about monitoring.

Does your governance team have a dedicated time allocated at each meeting to review progress against its strategic plan? Does it even have a strategic plan? If you answer no to the second question then you are probably already in trouble. If you answered no to the first question then you will likely get into trouble at some point in the future.

For strategy to be implemented there firstly must be a strategic plan. It doesn’t matter if it is a single page document or a 100 page document; the plan must exist. Creating the strategic plan is a major function of the governance group.

Someone has to take responsibility for implementing the strategic plan. This is a function of the executive team, not the governance group. It is a function of the governance group to review progress, by the organisation, against the performance indicators contained within the strategic plan. Time should be allocated for this purpose at every governance meeting.

If your organisation has a complex strategic plan it is recommended the governance group discuss with the executive team a structure for review of the strategic plan. For example, it might be agreed that one key outcome will be discussed at each governance meeting. This is important to ensure all outcomes are monitored in a timely manner and to enable the executive team to prepare relevant information.

Holding the executive team accountable for implementation of strategy is a key performance indicator of the governance group. When an executive team falls down and fails to achieve the desired outcomes it is as a result of failure by both the governance group and the executive team. Before the governance group seeks to make changes to the executive team, the governance group should look at themselves first and ask what changes they might need to make within their own group and their own processes.