Are Not-For-Profits a Corporate Governance No-go Zone?

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The Australian Institute of Company Directors has released a report investigating the relative levels of corporate governance in For-Profit (FP) and Not-For-Profit (NFP) boards. They concluded that there was no discernible difference between the governance effectiveness of the two, despite the fact that 86 per cent of the directors of not for profit organisations are not paid. There was, however,  a difference in the general perception of governance in the two sectors, the AICD found.

The AICD based its findings on a survey, to which 2065 members responded. Of those, 637 were currently directors of both NFP and FP organisations, a further 726 were directors of one or more NFP organisations and 470 were directors of one or more FP organisations. The survey found that 80 per cent of NFP directors believed that the Australian Charities and Not-for-profit Commission reforms will have no effect or will negatively impact NFP governance.

You can read more about the Institute’s findings in its “Directors Social Impact Study 2012” report.

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