AICD governance study released

The Australian Institute of Company Directors has released its annual not-for-profit governance and performance study, which reveals that, while Covid’s effects on the sector were not as damaging as predicted, many organisations could take years to recover.

The institutes NFP Governance and Performance Study 2021 is in its 12th year and remains the biggest governance report in the NFP sector. More than 1900 responded this year.

The 2020 study highlighted that, in many areas, the pandemic had intensified financial pressures that had existed before the pandemic, some of them caused by the bushfires of 2019-20.

The 2021 study paints a more optimistic picture. Eighty-four per cent of respondents reported making a profit or breaking even in the 2020-21 financial year.

But 40 per cent said it would take at least two years to recover fully from the pandemic’s effects.

Eighty-one per cent of NFP directors worried about the strength of the Australian economy, and 95 per cent of organisations changed their business models to deliver services.

Other key findings were:

• 20 per cent of NFP directors were remunerated (highest in the life of the study)
• 33 per cent reported that their boards had been operationally involved in their organisation’s responses to Covid
• 83 per cent of directors agreed that they were confident in their leadership team’s decision making
• Merger activity was at a 10-year low, only 18 per cent of NFPs discussed merging in the next year, with only 1 per cent reported to be winding up their organisation, and
• 49 per cent of respondents believed that a post-Covid environment would create more opportunities for their organisation.
  

The key priorities for the next 12 months included responding to post-pandemic opportunities, dealing with workforce issues and focusing on innovation.

The study will include an online dashboard, enabling readers to delve deeper into emerging trends. It is due to be launched in 2022.