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NFP performance study reveals community trust challenges contribute to board workloads

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The Australian Institute of Company Directors (AICD) has released its annual not-forprofit (NFP) governance and performance study, which revealed that directors are spending more time on their governance role.

Over its 10 years, the AICD’s NFP governance and performance study has helped raise awareness of the contribution of directors. This year the study found that 55 per cent of directors surveyed spend one to five days a month on their NFP role and 23 per cent spend more than five days a month on a single NFP.

The latest report identifies the factors that contribute to NFP board workloads which include rising governance expectations, community trust challenges for NFPs, the introduction of the NDIS, growing financial pressures, and changes in organisation complexity and regulation.

In addition to investigating the time directors spend on NFP board, this year’s study explored directors’ remuneration, succession planning, the sports sector, the slowdown in mergers, and financial performance.

NFP boards continue to comprise of mostly older directors with 77 per cent over 50 and only five per cent under 40 years old. There are fewer organisations engaged in or are considering merging with another NFP.  Sports organisations experience challenges in growth in revenue and membership, and facility improvements. Meanwhile, the percentage of directors being remunerated hasn’t fluctuated, with 19 per cent remunerated this year.

AICD CEO and Managing Director, Angus Armour, thanked the tens of thousands of NFP directors who have contributed to the study over the last ten years.

“The annual NFP governance and performance study supports our mission to strengthen society through world-class governance,” Armour said. “Our long-term tracking shows us that there has been strong and continuous improvement in NFP governance, which is being increasingly scrutinised.

As governance workloads rise in the NFP sector, it’s important to monitor whether the current model of NFP governance is sustainable and what can or should be done to innovate it.

“The AICD remains committed to the NFP sector and we are proud that we were again able to offer 140 scholarships to small NFPs to attend training programs this financial year,” he said.

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