Why you should trust and verify for good governance

Posted on 18 Nov 2019

By Matthew Schulz, journalist, Our Community

The executive director of the Institute of Community Directors Australia, Patrick Moriarty, says one thing every organisation can do to improve the quality of its decisions is to employ the institute's mantra: "Trust and verify".

Years of dealing with and training not-for-profit organisations of all kinds has highlighted to him the power of verification checks, whether they relate to your finances, your culture, or your compliance with relevant legislation.

Mr Moriarty says that too often, not-for-profit directors rely too heavily on second-hand reports rather than seeking original documents to verify that the organisation really is on the right track.

He cites a conversation he had recently with a board member from an aged care provider. The conversation, during a governance diploma training session, went something like this:

Patrick Moriarty: So, how do you know you're complying with occupational health and safety laws?

Board member: Well, because we get a report from the CEO.

PM: And how do you know the CEO is telling the truth?

Board member: Ah …

Mr Moriarty suggests engaging an external provider to check compliance, and using a staff working group or subcommittee to cross-check such things.

Asking to see actual bank statements occasionally or establishing a compliance register - checked at least twice a year - might also be appropriate mechanisms for verification.

And one way to check that you really are complying with your stated mission and culture might be to conduct a survey of staff.

He says board members don't need to be "interfering", but they are obligated to ensure an organisation is complying with the rules.

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