The regulatory perspective — Induction a key part of effective change management in charities

How charities induct new board or committee members has a direct impact on the quality of their work, the success of their operations and how they manage periods of change.

As many charities prepare for annual general meetings — and the changes in board composition that might come from them — the importance of having a practical, reliable and informative induction process as part of a wider series of change management strategies is amplified.

The Australian Charities and Not-for-profits Commission’s (ACNC) strives to maintain, protect and enhance public trust and confidence in the charity sector, as the first object in the ACNC Act requires.

And by carrying out the type of change planning which includes solid induction processes, charities display levels of good governance that engender that public trust and confidence. Charities without proper induction processes risk losing key organisational intelligence and potentially leaving new board members unprepared for their role.

Those new board members can, in turn, be disenfranchised; left unsure of the charity’s direction, unsure of the requirements of their own role, and without the knowledge and support to confidently fulfil their duties.

At its most severe, this can see the charity’s ongoing viability threatened, and can even place board members and the charity at greater risk of breaching ACNC Governance Standards relating to the duties and responsibilities of a charity’s Responsible Persons.

So it is clear that good induction processes mitigate these risks to good charity governance. But what of the dangers caused by a charity’s induction processes being present, but inadequate?

An induction process that might have worked well when the charity was smaller or newer — or when founders and establishment board members were present to answer questions, provide direction and embody institutional memory — will grow increasingly obsolete as circumstances change.

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