As we’ve discussed in earlier blogs, the world of federated entities is complex in a governance sense, with regional baggage and partiality just two elements adding to an already tricky landscape.
So I thought it timely and beneficial to devote some time to sharing what I believe are the 10 steps to success for federated entities in the not-for-profit sector.
Firstly, there needs to be a common strategic direction, a plan for the entire country, with each entity’s strategic and annual plans aligning with the national direction and fitting in with the Australia-wide umbrella.
The second point takes some effort but pays back in spades – we need crystal clear definitions of the roles and the responsibilities of the entities and, in particular, the national body’s role relative to the states and territories…and all needs to be done in a way to avoid duplication of effort.
At number three, ensure that the national entity has a competent board, with the right mix of skills and sector knowledge rather than a ‘you get what you get’ group cobbled together from what’s available from each state and territory.
Fourthly, make every effort to see to it that there’s great communication and consultation between the state and territory bodies and their national counterpart, for without it you have a sure-fire recipe for war.
And when challenges arise, there’s point five: agree at the outset on a process for conflict resolution.
Coming in at number six is the need for clear rules on who can come into the federation and what happens when anyone needs to get out.
Now for a few big doozies at seven, eight and nine.
There must be a unanimously agreed and integrated federation revenue growth plan to ensure that you don’t have one party going off and doing something that may conflict with what another’s busy with. You don’t want the WA body having a deal with Coke when the national entity could line up a huge contract with Pepsi.
With who’s responsible for which revenue source agreed – usually on the basis of who’s best suited to the task – it’s paramount that there is a fair revenue allocation model and that just because a certain entity raised the funds doesn’t mean they get to keep them all.
In a similar vein, there needs to be clear rules in place regarding the use of the brand and any intellectual property.
And finally, at number 10, there are agreed areas in which there must be national policies, developed and approved by the national board…and all entities must comply.
These ten steps are usually too detailed for the constitutions so should be in a federation agreement, a legal document signed by all that lists in clear and unambiguous language what must happen.
Nirvana’s now in sight…
Until next time,