As the Australian Institute of Company Directors (AICD) notes in its recently released Not-for-Profit Governance Principles (Third Edition) (Principles), there are approximately 600,000 not-for-profit (NFP) organisations and registered charities operating in Australia and registered charities alone employ more than 10 per cent of Australian workers.
NFPs, and those responsible for leading and managing them, have had to adapt and respond to a rapidly changing operating environment, evolving risks, greater regulation and heightened community expectations, including in relation to performance, accountability and governance. This is all despite the fact that NFPs are often resource constrained, commonly subject to funding uncertainty and heavily reliant on volunteers.
On top of this, the directors of NFPs – from the smallest community organisations to large multinational charities – who themselves are typically unpaid volunteers, must comply with the same general legal duties as their commercial counterparts.
It is against this background that the AICD has released the revised edition of the Principles, which are directed to providing practical guidance to the directors of NFPs, and others involved in an NFP’s activities, in understanding and discharging their governance responsibilities. It is approximately five years since the last edition of the Principles was released.
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