Not-for-profit: Best practices for good governance


If your organisation operates within the ‘For Purpose’ sector, good governance practices and processes are essential. When adopting governance practices, you need to keep your current goals in mind and you can create a roadmap for the future. These practices will guide your organisation’s operations and performance. They are the representation of your organisation’s stability and the strength of your governing body. They improve overall performance by giving your organisation a framework that is in line with regulatory and legal requirements. Good governance processes ensure that your stakeholders and donors can have confidence in your operational abilities. This is crucial for maintaining relationships with your stakeholders that are based on trust and transparency. 

Good governance practices are needed for all companies, but they are especially important for not-for-profits. The high level of transparency that good governance guarantees paves the way for trust. Putting checks and balances can reassure your donors that their faith in your organisation is well-founded. Good governance is all about the big picture – making sure that your financial health is in order, anticipating and planning risk, improving compliance, and creating long-term strategies. These processes will give you support when you are making the big decisions. Here are our best practices for good governance in your not-for-profit organisation. 

1. Develop internal policies for governance

Policies and guidelines are vital because they cover important concerns such as day-to-day operational norms. They give guidance on how to conduct daily operations. They guarantee that laws and regulations are followed, the organisation’s culture is reflected, decision-making is guided, risk is managed, and internal processes are streamlined. These rules and guidelines should be current, regularly revised and aligned with the organisation’s goals and strategy, as well as applicable laws and regulations.

Just like your organisation will develop policies for day-to-day operations and management, policies for board governance will also need to be developed. The same principles of good governance extend to the board as well. However, the roles of management and the board are different. These internal policies will specify the difference in the roles between the management and the board. Board governance means elaborating on the board’s roles and how it will work in hand-in-hand with the management of the organisation. 

2. Communicate the policies to your organisation

The next part of good governance is that the policies and procedures that have been put in place need to be communicated to your team, the board and relevant stakeholders. Policy-building will not be successful if the people they are meant for are not aware of them. Open communication will ensure that people are on the same page and it will minimise mistakes. 

The same goes for your board members. Policies for the operational purposes and for the purposes of board governance have to be communicated clearly. The board of your organisation must understand how the policies work for them and how to make amendments, if needed. This clear communication is essential to ensure that the board, management and employees are aware of the goals and objectives of the organisation and how they plan on achieving their missions. 

3. Make documentation a priority

It is important that governance processes/procedures are adequately documented. Often an organisation has good corporate governance practices and compliance procedures, but they have gaps in documenting the policies and reporting their execution. Good documentation can keep a record of your work-in-progress and fulfils legal and regulatory requirements. Board governance succeeds when board members are aware of these processes, so that they can follow through with good governance within the organisation. 

4. Join our Pathways program for not-for-profit board governance

Our courses are a great method of developing your skills in governance. Our NFP Board Governance e-learning course will teach you what good governance looks like and what kind of governance standards your board needs. Tailored for not-for-profit organisations, this course will prepare your board members and senior management for effective governance. 

This course will guide you through the practices of good board governance. It will explain what good governance looks like and what to do if you feel like your board is falling behind. This course will also give you tools to assess your board and help you identify ways to improve.