NFP board members need incentives
A board and business director has condemned the notion that not-for-profit board members don’t need remuneration to carry out governance roles.
In conversation with Lawyers Weekly, Gary Brady, a company and NFP director himself, and the program director of Bond University’s master of laws in enterprise governance, has expressed his belief that all board positions should be remunerated.
Considering the days of well-intentioned amateurs sitting on not-for-profit boards being quite possibly a thing of the past, Mr Brady said he doesn’t think “you put in the amount of time that is necessary to be put in if you are doing it for nothing”.
“If you are prepared to do that for nothing, it attracts a sort of person who is passionate about the matter, but maybe less passionate about the governance,” he propositioned.
“You’ve actually got to visit sites, you’ve actually got to talk to people inside the organisation, you’ve got to work with management to understand how the place ticks.”
The program director also noted that undertaking the work of the board takes time.
“You’ve got to put the time into [it] — it can’t just be read the board papers and go into a board meeting,” he explained.
While it’s not necessary “to run the place like a manager”, Mr Brady said such work helps with board decision-making, because “when you see something, you know what they are on about”.
“And you’ve got to work hard at actually doing that, you’ve got to put the time in, and I think you should be adequately remunerated for that,” he continued.
He went on to highlight concern around the perceived risks associated with being on boards, posing the question: “Does it go so far that the risk to you is so great that you step down from boards?”
He gave an example of changes that had to be made to workplace health and safety laws that said a not-for-profit board member can be fined but not sent to jail.
The purpose of this, according to Mr Brady, is “to actually help people join not-for-profit boards and not be scared off by legislation that is so onerous that they say ‘there is no way I’m getting involved in that’”.
Ultimately, Mr Brady said working on a board “shouldn’t just be solely about compliance”.
“It should also be about organisational excellence,” he continued.
“How do we actually use governance to make the entity better?
“And I think that’s where, if you just go down the paint by numbers compliance exercise, I think you miss the opportunity to actually look closely at organisational excellence.”
Lawyers Weekly has previously reported on Mr Brady’s consideration that 25-year-olds should not be excluded from opportunities to sit on company boards.