The boardroom represents the summit of ambition for those seeking to climb the corporate ladder, but competition is stiff and admission is generally limited to those at an advanced stage in their career.
However younger professionals who have set their sights on a directorship can give themselves an advantage by starting early and building experience on a non-profit board.
Community and voluntary groups and even some public sector bodies all rely on non-executive directors, generally unpaid, to help govern their organisation and oversee their activities. Age, sex, disability or ethnicity should be no barrier to securing a directorship given the emphasis now on increasing boardroom diversity.
“No matter how small the organisation, serving on a non-profit board can help develop your leadership skills and give you a valuable insight into the way organisations are run,” says Libby Marshall, MBA Career Resource Manager at UQ Business School.
“It will give you the opportunity to use your existing skills in a different capacity and to develop new skills such as marketing, HR or finance which may be outside your current role. You will be exposed to situations which you would not encounter in your full-time job and may find you have to make decisions at a higher level.
“Many company directors, including ASX directors, serve on non-profit boards so it is also a good way to expand your professional network. Because you are helping a cause which you believe in, it can also give you a real sense of satisfaction.”
For those who are looking to build their experience in this way, here are four things to bear in mind:
- Choose a cause you feel strongly about
There are around 700,000 non-profit organisations in Australia representing interests ranging from arts, sport and culture to religion, education and medical research and including community groups and professional bodies.
There are also a wide range of public sector boards such as governing bodies for art galleries or parks, boards which manage public assets or give out grants, regulatory boards which set standards or give out licences and consultative or advisory bodies.
Non-executive directors are chosen on the basis of their skills and experience so it is useful to understand what you have to offer, and also what you want to get out of it.
The best place to start your search is by looking at what is around you – local community groups, hobbies or subjects you are already involved with. You could apply to become a governor of your child’s school, or join the committee of a local sports club or a professional body of which you are a member.
These types of groups can act as a stepping stone, allowing you to build your skills and prepare for roles with more high-profile organisations and for which there can sometimes be tough competition.
Whatever you choose, however, make sure that you feel strongly about the cause and that you share the same philosophy, as this will make the effort you put in seem worthwhile.
The Institute of Community Directors Australia has a list of non-profit board positions which are available, as does Women on Boards.
- Understand what the role entails
Before accepting a position on a board, you need to ascertain what is involved. How often does the board meet and are there other events you will be required to attend? How much time are you expected to commit? Are there particular tasks or responsibilities that will be allocated to you?
In large organisations, day to day tasks are generally carried out by staff so board members can focus on strategic decision making, but in smaller bodies, directors may have to a play a more hands-on role. They are also likely to be under greater pressure to help with fundraising.
However even where a board position is expected to take up little of your time, things can change in the event of a crisis. If the organisation loses key staff members, faces the threat of legal action or runs into financial difficulties, your duties as a director may mean that you may have to put in considerable time and effort to help resolve the issues.
- Understand your legal obligations
As a director, you are required to act in the interests of the organisation, not in your own or anyone else’s, and to avoid conflicts of interest. Directors must also carry out their role with care and diligence, by reading and considering board papers, attending and actively participating in meetings and understand the organisation’s work sufficiently to make well-informed decisions.
Even though you may not be involved in the day to day financial affairs, directors take overall responsibility for the organisation and its finances. They are liable if a staff member has been wrongly dismissed, for example, or if they are negligent in giving advice. In the worst case scenario, individual board members can be forced to pay damages.
Ensure that you understand your obligations. Read the organisation’s rules of association, or equivalent document, and find out the rules covering your particular type of organisation – whether it is a company limited by guarantee, incorporated association, a co-operative or indigenous corporation – as well as any special legislation that applies to your sector. Check that public liability insurance and directors’ insurance are in place.
The Australian Institute of Company Directors offers training to help directors understand their duties while the Institute of Community Directors Australia offers programs specifically for those on non-profit boards.
- Non-profits are different to businesses
While success in business is measured against the bottom line, for non-profits performance is about how well it is fulfilling its mission to help others, though of course financial prudence is essential to enable it do that. Professionals who join a non-profit board need to understand this difference in emphasis and may have to adapt to a different culture.
Charities can also be more complex though that can have its advantages, according to Jacqueline Kelly, CEO of Lutheran Community Care. She says: “Charities are quite complex in a number of ways so it is a good way to develop the ability to make complex decisions in complex environments.”
However those used to working in a more fast-paced business environment often find it frustrating that the decision making process can be much slower and more complicated in the third sector, and lack of resources can make it difficult to get the job done. Patience is a virtue though it is one that is easier to demonstrate if you are passionate about the cause.
Libby Marshall adds: “Serving on a non-profit board requires commitment and at times can be challenging. However it will give you a breadth of experience and will prepare you to hold boardroom roles within your own industry in the future. You will also meet some fascinating people along the way and may find it a truly rewarding experience.”
