When keeping governance and operations separated, an important first step is to decide the operational functions that need to be specifically addressed.  This may include key functions such finance and general administration but try and be more specific such as, for example, finance manager, event manager, membership coordinator, communications manager, equipment manager or office manager.  Depending on your organisation there may be may other different roles but the key issue is to identify the key functions.

The next step is to develop a position description statement or terms of references for these roles that clearly outlines the key tasks, levels of responsibility and accountability.  This is important because you need to establish boundaries between the functions and the responsibilities so you avoid the situation where everyone becomes a jack of all trades.

If you have several board members all doing a range of roles and tasks then the left hand may not know what the right hand is doing that will result in a lot of confusion and disagreement.  As such, it is important that each role is designated and allocated to a particular board member and not to several different people.  There may be other people including volunteers or other board members that assist but there should be the one person who is the manager and assumes responsibility for the role.

In addition, the terms of reference should also provide a framework in relation to, for example, what should be reported back to each board meeting, key objectives of the role, levels of authority relating to spending limits and entering into contracts.  Once there is clarity around the key functions, who is responsible and accountable then the next step is to determine the best way for the board to provide oversight of these functions while also providing the required governance.

This important distinction of the separation of duties between governance and operational is critical as this also provides an effective framework to be implemented to ensure internal controls, risk management and financial management issues are thoroughly adhered to and actively monitored.  For example, you don’t want to have the person who authorises and approves the expenditure to be the same person who processes the transactions.

To add to this example, it is not unusual for a treasurer to be the sole person who authorises payments, processes the transactions, reconciles the accounts and then presents a financial report to the board meeting.  While on one hand this may be a practical solution on the other it is not good financial stewardship, lacks transparency and is just poor and ineffective governance.  Depending on the volume, the dollar value and the type of transactions there may be a need to establish a Finance Sub Committee to oversee these areas.

The following post discusses some strategies for the board to oversee and manage the governance and operational elements of the organisation.