[This is the script of a TEDx talk delivered by David White at the Blue Mountains International Hotel Management School on 7 September 2013. You can find the talk here ]
In 1989 Mick Dark gave the Blue Mountains community, and the writers and readers of Australia, a wonderful gift. He gave Varuna, formerly his parents’ house, to a newly established charitable foundation, to be a writers’ centre. His mother Eleanor Dark was one of Australia’s finest writers of the 20th century, and his father Eric Dark was a local Katoomba GP, and what we might these days call an environmental and social activist and an author in his own right.
Mick Dark’s generous gift is now Varuna, the National Writers’ House. Since 1989 Varuna has inspired the creation of new Australia literature and provided support for a thriving writing community and a growing body of alumni.
Varuna runs a number of residential writing programs, but most of all it provides a quiet and collegiate space, where writers don’t have to worry about cooking, cleaning or kids – they can just write.
Gifts like Mick’s, though, come with responsibilities – Varuna needs to be maintained, nurtured, its heritage protected, its programs funded. Varuna has a board of directors that is charged with doing just that.
The Varuna board is just one of 600,000 or more boards and committees in Australia with the responsibility for governing a not-for-profit organisation. That word – “governance” – is anyone else sick of hearing about it? “Corporate governance”, “lack of governance”, “failure of governance” – it’s getting to be as overused as “mandatory detention” or “interest rates”.
But governance has a particularly important role in the not-for-profit sector, for a reason that it exemplified by Mick Dark’s gift – in the NFP world we are so frequently dealing with OTHER PEOPLE’S MONEY. People, and governments, donate their hard-earned money, or give their assets, to enable organisations and charities to help those who are in all sorts of need, or to support all sorts of worthwhile causes. The stewardship of that money, those assets, is the especially vital role of NFP governance.
My experience of working at close quarters with NFP boards over the last 10-11 years is that the best kind of governance for organisations like these is GOVERNANCE WITH HEART. Why HEART? Because:
- It’s about people – the ones who are doing it, giving or volunteering or supporting, and the ones we are doing it for, the beneficiaries of the activities.
- It’s about the cause – in the NFP world you don’t get paid for what you do, or if you do then it’s not what you’d get paid in the big bad corporate world – so the whole show runs on passion, and there’s no passion without heart.
We’ve been on our own journey at Varuna, with the board taking steps to put itself in the best position to exercise the trust which has been placed in it. To deliver our own governance with heart
And we are doing it based on 5 key elements which I have found, after hanging around in board rooms for more than 20 years, are amongst the most important things for a board to be really clear about.
The first element is WHO – who are the people on the board, getting the right people on the board and sometimes, getting the wrong people off.
Getting the right people on the board – you know how this works so often – “I now someone who would be really great to bring on the board, a mate of my brother’s …”. Whether the brother’s mate is actually the right person won’t be clear at all, unless you’ve first discussed and decided what skills, knowledge, experience and personal qualities you really need on the board, if it is going to guide the organisation to achieve its strategic aims over the next 3-5 years.
At Varuna we have been really clear about what skills we need on the board, to what extent they are already covered, what the gaps are – and then we only recruit new directors to fill those gaps. I can’t be more emphatic about that – only recruit into the gaps.
Then there’s that delicate issue of getting the wrong people off the board. I was involved in a series of workshops once for NFP boards and CEOs, and we ran a straw poll of who had the longest serving director on their board. The record was 38 years. Are you really going to be making the best contribution possible after that long? The necessary skills for a board have changed to a considerable degree even over the last 10 years, let alone 38.
So what’s the deal here? I mentioned that the NFP sector is fuelled by passion. Sometimes that passion means the person involved comes to strongly define their own identity by their involvement in the particular charity, and to leave would be to lose part of that identity. So respectful disengagement of the wrong people can be challenging.
I did a job a couple of years back for a board that had been displaying some dysfunction. After a confidential discussion with each of the directors, it emerged that the CEO’s ex-husband was the brother of the current chairman, and the other directors were lined up on either side of the relationship. Just by bringing the issue out into the open (and probably hearing it from a third party) seemed to be a sufficient catalyst for the chair and two other directors to choose to get out of the way, so some fresh blood could be brought in.
The issue here is that you have to conscious, and intentional, about who is on the board. You have to discuss it openly and transparently – and the more open and transparent the discussion, the easier the job of getting the right people becomes. I’ve often seen it, after I have taken a board through the skills audit process, that people have self-selected off the board, with no other intervention, when it becomes clear that the contributions which they might be able to make are not the ones which the board actually needs in the next phase of the organisation’s development.
There’s the who. The next crucial element is the HOW. In organisations fuelled by passion, it’s critical to be clear about what our values are, what we stand for, how we will BE with each other and those for whom we are doing it all. It’s hard to see how a NFP can’t be a values based organisation.
At Varuna last year, we assembled 60 people – writers, staff, directors, alumni, volunteers – and dug into what Varuna’s values were. Our conclusions became what we have called “The Varuna Way” –
- Valuing heritage and place
- Making writing and creativity matter
- Bringing rigour and commitment to the writing craft
- Building a respectful and inclusive community
We can now test the things we do, and the way we do them, to ensure that they are aligned with these values. People who want to become involved with the organisation can see what we stand for, and then come to their own conclusion about whether our values are compatible with theirs.
The board took another step – discussing frankly and openly how we want to work together as directors. We now have clarity about things like expressly embracing The Varuna Way, valuing trust and respect, contributing effectively before, during and after meetings.
One of the upsides I have seen in other values-based organisations, about having a clearly expressed set of values, is that when you think there is some behaviour going on that is not aligned with those values, you have a concrete basis on which to call the behaviour. Like “chairman, we have agreed that we value openness and transparency, but what’s going on here doesn’t feel like it’s open or transparent.” Values can become a shared language. We haven’t had to go there on the Varuna board yet, but it’s comforting to know that there is an agreed framework on which to hang difficult conversations.
After “how”, I have found it is important for NFP boards to be clear about “WHO FOR?” For whom are we governing this organisation? Who are its stakeholders?
NFPs generally have to operate within certain legal structures, for tax and other regulatory reasons. Those structures, however, were designed for commercial operations, where there is usually some clearly identifiable shareholders, the value of whose investment is to be maximised. That’s not so clearly the case in a NFP. Sure, there are the beneficiaries of the organisation’s activities: the disadvantaged children, the homeless cats and dogs, the aspiring writers and poets – whomever or whatever cause you are working to support. But there may be a host of other important stakeholders whose interests the board should be guarding.
At Varuna we have taken a deep dive into finding just who our stakeholders are, what their actual stake is, and how that stake is being managed. Amongst them are of course our writers and alumni, but there are also our funders, our staff, our volunteers, our local Blue Mountains community, publishers, other organisations operating in our sector, the ATO without whose grant of charitable status we couldn’t operate.
There were a couple of penny-drop moments during the process, and now we have identified our stakeholders there is some work to do to ensure they are all being appropriately managed. But once again, there is a framework to base future actions on.
The next big one for me is WHY? Why does the organisation exist? What is its purpose? Why do we get out of bed in the morning to go and give our time and energy to it? The benefit of a NFP being clear about its purpose is that it can test what it is doing, its strategies and potential new areas of operation or involvement to see if they fit.
We are clear at Varuna in our belief that there is a value to our society in the continuing development of quality Australian literature. Our purpose is clearly set out in the objects in our constitution. These include to support and develop Australian writers, and promote Australian literature, and to maintain the legacy of the Dark family heritage. On reflection, we thought that there was one part of our purpose which we not carrying out, the dissemination and discussion of ideas (a concept especially dear to the heart of Eric Dark) and we have over the last 18 months been developing the annual Eric Dark Lecture to address this.
And the last big question is WHERE? Where is the organisation going in the next agreed period? What is its destination, at the end of 3 or 5 or even 10 years? This agreement on destination is critical for NFPs in determining their strategic plans. A strategic plan is after all simply a map to get to the agreed destination. It can be really hard for organisations to set strategies, and then budgets and operational plans, without that clear idea of where you are going.
So those are the 5 big questions for me about governing a NFP with heart. And there is a collateral benefit in having agreed answers to these questions. They make it much easier to tell your story to funders. It’s a competitive environment out there for funding, not as much money on offer for all the good causes to be supported. For your NFP to prosper you have to be able to stand out.
At Varuna we recently had to submit an application for three year funding to one of our most important donors. A substantial part of the application turned out already to be written, as we dropped in our who, how, who for, why and where material into the required format. We were fortunate enough to secure that core funding for the next three years.
Governing in a not-for-profit has some particular wrinkles to it, but if you are open to governance with heart, it is one of the most rewarding, and useful, things you can do, for yourself and your community.
So I’d like to invite you to go out into your community and find yourself a job on a board or committee, and govern with heart.
David Rowan White