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By Nick Koerbin
No matter the size of your association, risk management is one of the significant challenges facing volunteer boards. Often, Boards are
expected to meet and decide there and then to enter into contracts with suppliers, sometimes worth thousands of dollars, without a proper
risk assessment.
The latest research by Association Executive Services of over
100 Associations in Australia has revealed that very few associations have a structure for conducting a risk assessment on proposed
partnerships or contracts with suppliers.
Most association board members are volunteers and time-poor and are often vulnerable to poor decision-making when entering agreements with
third parties.
To reduce risk to your association, set up a risk management committee.
Here is how to go about it!
💡 Get sign-off from the Board and develop terms of reference for the risk committee. What risks will the committee assess, and how
will they report to the Board?
💡 Identify who should be on the risk committee; it is typically the treasurer and about three other volunteer members who may have
financial, legal, supplier management or similar skills.
💡 Define responsibilities, reporting structure, and duties. When do they meet? Who do they report to?
💡 Develop a risk management framework and risk assessment structure. For example, the risk management committee may need to review
contracts over a certain amount in value.
💡 Identify the assessment process and timelines for reporting to the Board.
💡 Finally, could you ensure there is a Board policy supporting the roles and functions of the risk committee, which forms part of the
compliance under board governance?
The association sector is in the middle of a leadership handover.
Across Australia and New Zealand, CEOs and Executive Directors are moving on. Some are retiring. Some have gone to larger organisations.
Some have left because the relationship with their Board ran out of puff. The reasons vary, but the movement is noticeable, and Boards are
appointing replacements.
The encouraging part is the calibre of the people coming in. Many are genuinely well suited to the job — capable executives with strong
records behind them. A good number are stepping into an association CEO role for the first time.
Most associations can provide a long list of membership benefits. They may include professional development, advocacy, networking, industry information, events, resources, accreditation, discounts and access to specialist advice. However, a list of benefits does not necessarily explain why someone makes the decision to join.
While every Board is different, the same governance issues appear time and again. One of the most common is allowing one person’s behaviour
to dominate the Board table.
Almost every Board has experienced it at some point. One director who seems to consume more time and energy than everyone else combined.
How we help membership based, not-for-profit associations now and into the future.
