Membership and Governance modelling
In preparation of a constitution or rules for a not for profit it is important for you to consider the appropriate model of membership and governance.
Membership
- There are several different options for the membership model of a public company limited by guarantee. The number of members and the composition of the membership depends on the strategy considered to be best for the sustainability of the company moving forward.
- The optimum membership model for any company is best determined by having regard to the role of a member in a company and a consideration of which persons will have a vested interest in the long-term sustainability of the company, that is, those who care about the success of the company in meeting its altruistic purpose and will continue to engage with the company on an ongoing basis in the long term.
- It is important to consider whether you need a small or a large membership, whether they are all voters, whether there are to be body corporates as well as individuals. Lesleigh can help you consider the different dynamics of each of these models and what is appropriate for your organisation.
Governance
- The traditional governance model for a not-for-profit entity was representational where the members elected the board each year and there was a yearly turnover of the board in a very democratic way. For many not-for-profits there are limitations in the representational model including a lack of breadth in the skills, knowledge and experience of the members or the representatives chosen by the members.
- It is common now, for not-for-profits to have a skills- based board to allow for independence and the attraction of the skills and other qualities needed.
- The directors have the responsibility of governance - the oversight of the sustainability and performance of the company. The board is accountable to and must report to the members of the company to satisfy the members that the company is meeting its purpose and is sustainable. They also have duties under the Corporations Act, and if relevant the Australian charities and Not-for-profit Commission (ACNC).
Lesleigh can help you consider what is an appropriate governance group for your organisation including its size, the term of office, eligibility requirements.
