One of the underlying principles of being on a board is that the focus is on governance issues relating to, for example, policy development and compliance, strategic planning, financial monitoring as well as the evaluation of the organisation.  Operational issues do not form part of this role which is why staff are usually employed to manage and look after the day to day operations of the organisation.

A lot of small not for profit organisations such as community groups, sporting clubs as well as many other types of groups often don’t have any staff to manage the day to day operations.  So how can the board keep governance separate from operations?

This can be a genuine challenge and if there is too much focus on the operations and less on governance or vice versa then the board may encounter significant problems with the ongoing success and viability of the organisation.

As a treasurer or when the board is involved with the day to day operations of the organisation, it is critical to have water tight systems, controls, policies and procedures to ensure full accountability and transparency.  Therefore, it is imperative that there is a clear separation of duties and that the board review transactions and compliance related issues as part of the governance function.

The next post will discuss some issues about defining key functions, responsibilities and accountabilities that need to occur.