Governance is not the Paperwork. It’s the Responsibility we accept.

18 Sept

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Completing the Diploma of Governance with the Institute of Community Directors Australia (ICDA) has been an interesting experience for me, not because governance itself is new to my world, but because it reinforced something I believe we need to speak about far more openly across the social enterprise and not-for-profit sectors.

I have spent more than three decades working across governance, compliance, financial services, licensing, business growth and organisational risk. I have established governance and compliance frameworks, held responsibilities attached to financial licences and worked in environments where accountability was never optional.

Yet, throughout this Diploma, one thing continued to stand out.

It was the conversations around me. Repeatedly, participants shared how little exposure they had previously had to the actual responsibilities that come with governance.

Many had joined boards because they cared deeply about the mission.

Some had stepped into leadership because they wanted to contribute.

Others had established organisations because they could see a problem that needed solving.

What was far less understood was the weight of responsibility that sits behind those decisions.

A Board position isn’t an honorary title

Sitting on a board is not simply an opportunity to contribute ideas, attend meetings or support a cause.

We accept legal, financial, ethical and fiduciary responsibilities.

We are expected to understand the organisation's financial position, ask questions, recognise risks, manage conflicts of interest, understand our delegations and make decisions in the best interests of the organisation.

The ICDA Diploma consistently reinforces that responsibility. Board members cannot simply delegate financial understanding to the Treasurer or operational responsibility to the Executive Director and assume their own accountability disappears.

That distinction matters.

A title may give us a seat at the table. Governance determines what we are responsible for once we sit there.

The gap I believe we need to address

For me, one of the most important reflections from this learning was not about my own technical knowledge. It was recognising how significant the governance literacy gap remains.

In the social enterprise and NFP sectors, we rightly attract people driven by purpose. That commitment is one of the sector's greatest strengths. Purpose, however, does not replace governance capability. Good intentions do not protect an organisation from insolvency.

Passion does not remove fiduciary duties.

A commitment to impact does not remove the need for financial controls, policies, clear delegations, risk management or accountability.

The course reinforces that board members must understand the organisation's affairs sufficiently to form an informed view of its financial capacity and respond when that capacity changes.

This is not something we should discover only after accepting a board position.

Governance begins earlier than the Boardroom

I believe this conversation also needs to extend beyond boards.

When we establish a business, charity or social enterprise, governance begins from the moment we start making decisions about:

who holds authority;
how money is controlled;
what happens when something goes wrong;
how conflicts are managed;
what information is reported and to whom;
where accountability ultimately sits.

Governance is the architecture that allows purpose to survive growth.

Without it, organisations can become overly dependent on individuals, unclear about decision-making authority or exposed to risks they did not realise they were carrying.

What this Diploma reinforced for me

The Diploma did not change my belief in governance.

It strengthened my belief that governance education needs to become more accessible, more practical and far more normalised, particularly for organisations built around social impact.

We need board members who are willing to ask:

What don't I understand?

What responsibility am I accepting?

What information do I need before I can make this decision?

What happens if this goes wrong?

Are we acting in the best interests of the organisation and the people it exists to serve?

Those questions are not signs of mistrust. They are governance.

Where I leave this learning

My strongest reflection from the Diploma is simple:

We cannot build sustainable impact without building governance capability alongside it.

If we want stronger social enterprises, stronger NFPs and stronger community organisations, then governance cannot remain something we introduce after growth, funding or crisis demands it.

It must sit alongside purpose from the beginning.

For those already sitting on boards, the question is not simply whether we care about the organisation. The question is whether we fully understand what we have agreed to be responsible for.

That is a very different conversation and one I believe our sector needs to keep having.

Cathy Dimarcho

CEO

Solutions2You Pty Ltd