A recent governance and performance study has found that the highest priority of school boards is their reputation. The Australian Institute of Company Directors recently published the 2014 NFP Governance and Performance Study (the Study), an annual look into the governance of not-for-profit entities (NFPs), including independent schools.

Managing reputation

The key finding of this Study was that the highest priority of school boards was managing the school's reputation. The reasons given for this were that a good reputation attracts the best teachers, students and community support and also brings steady donations. The Study also remarked that 'a school's reputation is also strongly influenced by the quality of its principal who is primarily responsible for building a culture of high standards and a loyal and stable workforce'.

However, reputations are fragile and the Study repeats the often acknowledged understanding that a reputation can 'take years to build, but be lost in a day' and any incident involving the safety of a child, particularly allegations of sexual abuse, can attract immediate media and public attention.

Interestingly, the Study has also stated that 'directors... have been told to plan what they will do when (not if) their school is involved in a case of sexual abuse, and how they will handle the impact on reputation... liability issues for abuse cases can extend for more than 50 years after a student has left the school' (emphasis added)'.

An example of this was recently reported by ABC News, where an ex-student has commenced legal action against a school more than 50 years after the alleged incidents (also see our article on this case).

Managing parents

With an increase in inter-connectivity, and as the boundaries between school and home becoming increasingly indistinct, the Study noted that parents can be both demanding and positively engaged in schools. Ensuring that parents were a part of their children's education, whilst providing boundaries for 'helicopter' parents, is an example of this. In addition, 'schools are increasingly being asked to deal with complex social, emotional and behavioural problems', the Study said.

School boards would be well familiar with this, especially if their school maintains a social media presence or has implemented a proper complaints-handling system.

Managing funding

School boards also reported that the lack of certainty in funding arrangements made it difficult to plan ahead, especially for large capital projects which often span several years. The Study reports that school directors would like the certainty of a five-year funding model so that better decisions could be made about the curriculum, support, infrastructure and staffing.

This aligns with the registration requirements of many states, which mandate that schools must provide medium and long-term strategic plans.

Managing challenges

According to the Study, the most important challenges for schools in the next three years as described by directors, in descending order of most important to least were:

• maintain or build our reputation;
• uncertainty about government funding;
• maintain or build out enrolments;
• cost management;
• raise capital to improve or replace infrastructure;
• management of risks to students; and
• maintain or replace existing infrastructure.

The future

A recurring theme of the Study was that the governance of NFPs is continuing to evolve. Directors of schools boards now face increased expectations, from the governance requirements imposed by the Australian Charities and Not-for-Profits Commission, to the increasing mandates of state registration requirements.

For example, in NSW new governance requirements are imposing a raft of obligations on school boards to abide by standards that are routinely observed by large corporations and ASX-listed entities. In Victoria, school boards must bear the burden of increasing financial scrutiny, in light of recent reforms.

Finally, the Study is clear on one important point: directors make a significant contribution to NFPs in terms of skills, time and even donations. Many school board directors were not remunerated for their time or skills, and many did not even claim expenses incurred in service to the schools. Without their generosity, the experiences and education of many students and parents would be poorer.

Do you agree with the findings in the Study?