8 Constitutional Must Haves

8 Constitutional Must Haves

Article by Geoff Wohlsen

We’ve read and drafted many constitutions over the years but here are the features that every not-for-profit might consider:

  1. Size of the Board

We still see governance bodies (board ad management committees) that extend to as many as 13 positions. This large number stems from the need to corral volunteers to perform operational tasks. But the sheer logistics of maintaining 13 on a board (or 9 or 10 …) is too much of a burden.

When there’s a large number of positions, it’s easy to think that the responsibility is diluted and that leads to poor individual performances from directors. The burden of being a director falls, for the most part, equally on all directors and isn’t diluted with a larger board.

Research indicates that the optimum number of directors of public bodies like not-for profit clubs is between 5 and 7.

  1. Multi-year terms

Two or three year terms provides some stability and commitment from directors. The one year cycle is disruptive and leads to short term decision making.

  1. Staggered elections for portions of the Board or Committee

Some governance bodies are entirely renewed and placed up for re-election every year or every two years. A board can be dispensed with in a clean sweep every year or at every general meeting.

This isn’t good for planning, continuity and certainty. It might be best to stagger elections and terms so that less than half the board is up for re-election in any given year.

  1. Maximum continuing terms

We know that there are long term directors that have given a large part of their lives to not-for-profits. This is excellent but there can be a downside.

The organisation can become closed in its thinking and strategic initiatives. Research would indicate that around 9-12 years of continual service is optimum.

  1. Mandatory Governance Training

Governance training is best completed on a repetitive basis; a reminder every year of the pitfalls of not assiduously following the hard rules of governance.

  1. Board elects its own Chairman

We think that boards work best when they get to select their own leader, the Chairman.

  1. No need for an “Executive”

Some constitutions still establish an “executive” committee of the board, often comprised of the Chairman, Deputy Chairman, Finance Director etc.

It’s often provided for that this group of individuals may collectively hold additional decision making powers. This approach is dangerous and may create a division on the board.

All directors are, for the most part, equally responsible for the governance and sound management of the organisation. It sends a confusing message to other directors when some directors have more powers than others.

  1. Appointment of the Secretary

We believe that the Secretary should be appointed by the Board.

  1. Separation of the Secretary role from the Board

We believe that it’s better to have a Secretary who is not also a director. The Secretary has specific powers and responsibilities.

A directors who is also a Secretary may find it confusing to determine what “hat” the person is wearing at any given time.

There is training on risk management in our online learning platform at https://clubgovernance.com.au/elearning-platform to assist you and your Board.

Who Needs Club Governance Training?

In our opinion every club and Association across Australia need Club Governance Training.

Governing a Club, Charity or any Not-for-profit is a big responsibility, and it cannot be done by well-meaning volunteers who do not understand their role.

Club Governance Training will;

  1. Board Members will know their responsibilities.
  2. You’ll have more productive Board Meetings.
  3. Help improve your Club’s growth and sustainability.
  4. Your Club will be more legally compliant.

Club Governance has developed an online training program for all Board and Committee members to ensure they know how to do their job.

It is available in 15 modules of about 15 minutes each and covers all the necessary knowledge they must have, based on our 30+ years of assisting organisations like yours around Australia.