Strong, independent and committed boards are of critical importance in the success, effective governance and sustainability of charitable and community organisations. The role and composition of the board is a key issue that Irish Abroad Unit considers as part of its overall assessment of the sustainability of the organisation for Emigrant Support Programme funding. We expect full compliance with relevant local laws governing boards and charitable organisations.
The Institute of Directors in Ireland offers useful advice on their website as to the composition and activities of boards of non-profits. They note that the key purpose of a board is to ensure an organisation’s prosperity by collectively directing the organisation’s affairs while meeting the appropriate interests of relevant stakeholders, and complying with all necessary legislation and regulation. High standards of governance, transparency and accountability are expected of all organisations, with community, voluntary and charity organisations being no exception.
The Charities Regulator in Ireland would also point out that board members are also trustees of the organisation and as such have a custodial and stewardship role. Charity trustees are the people who exercise control over, and are legally responsible for, the management of a charity. They are volunteers who give their time to improve, protect and support the charitable purposes and activities that occur. Although they are volunteers, the role of a charity trustee carries significant responsibility. The board of trustees of a charity is collectively responsible for the oversight of that charity. While charity trustees can delegate tasks, they cannot delegate accountability.
Even though a board may serve on a voluntary basis, the directors, officers or trustees of organisations are obliged to make themselves aware of the organisation’s obligations and their own personal obligations, to ensure that the organisation operates effectively and efficiently and that they behave with integrity.
The board should also set the strategic goals of the organisation and be in a position to see them through. Strategic goals are what your organisation was formed to achieve and they set out what you intend to achieve over a set period of time, usually 3 to 5 years. Strategic goals should describe a change or outcome (result) that you want to achieve, not an activity or output. They should also include clearly measurable targets that are realistic and time-specific (See reporting procedures). Strategic objectives are important because they define organisational priorities and help a board focus on sound business planning and organisation management.
Sustainability and future planning, including rotation and succession planning for board members themselves is particularly important. Encouraging younger generation participation in boards is an important element of this. It is therefore imperative that boards implement succession plans. The main goal of a succession plan is to smooth the transition as board members leave and are replaced and ultimately it is a way for an organisation to ensure its continued effective performance and sustainability. It is important to think not just of board membership numbers but also of board diversity in terms of background and experiences. A board needs to search constantly for potential members and find new ways to uncover suitable candidates for board positions.
Board composition is key to sound oversight of an organisation and it is important that boards have the right makeup to carry out their work. Taking this into account a number of best practice guidelines, which have been informed by audits of organisations in receipt of ESP funding, may be of use in developing and maintaining board composition. These would include:
- Board members should serve for clearly defined terms rather in an open ended/undefined manner. It would be best practice that terms should be no longer than three years
- In total board members should not serve for more than nine years on a board (i.e. three terms of three years).
- Board members should not spend more than two terms (six years) in a role (e.g. chair or treasurer).
- Boards should not be made up of multiple members of the same family.
- Board members should not also work for the organisation.
- Board members should avoid conflicts of interest in terms of the finances of the organisation and services that the organisations uses.