Navigating the key documents

The annual report

Annual reports provide information about an organisation's activities over the previous year and an outlook for the future. These are very important documents that help to keep members and other interested parties informed about the organisation's directions and priorities, helping the board fulfill its duty to be accountable and transparent.

Annual reports also provide an opportunity for an organisation (and its governing board) to showcase efficiency and effectiveness, as reflected in the past year's achievements and milestones.

Annual reports vary greatly from organisation to organisation, depending on their differing budgets, styles and responsibilities. They may be freely available to the public or produced just for internal reporting purposes. While one organisation may produce no more than a single, photocopied sheet, others will settle for no less than a many paged, glossy, professionally designed document.

Content can also vary. However, some of the more common elements include:

• General information about the organisation's mission and main roles, why and when it was formed and the rules it is subject to
• A board chair or president's report
• A report from the CEO or head person (if there is one)
• A summary of key activities and their results in the previous year
• Future plans
• Reports and statements detailing the financial status of the organisation

Rules/bylaws/constitution/statute

All organisations will be subject to rules of some sort. Many incorporated organisations will have adopted the "model rules" provided by the various state and territory governments, or a variation thereof. Others will have formulated their own rules, constitution or bylaws. Government boards and committees will be subject to rules set out in a particular Act of Parliament.

Whatever the format of an organisation's rules, they will generally cover all aspects of how an organisation must be set up and run. Specific items might cover:

• The organisation's name and purpose
• Definitions
• Membership procedures

Of particular relevance to boards, the rules should also stipulate:

• How the governance structure must be set up
• The governing board's power boundaries
• Responsibilities of office holders (secretary, public officer, president/chair, treasurer, etc.)
• Meeting procedures (voting rules, minute-taking etc.)
• The number of members the board must have
• How many board members are required at a meeting for a quorum
• Maximum lengths for board member terms
• How often the board must meet
• Procedures for dealing with a tied vote
• How and under what circumstances a special meeting can be held
• Minimum attendance requirements for members
• Any restrictions on who can serve as a board member

It is a good idea to make a thorough reading of these both before you agree to join a board and at regular periods during your board service.

Policies

Along with the rules and laws that govern their operations, boards will often have a set of policy documents to guide board members in their conduct and decision-making. The number and type of policies will differ from board to board, but some of the more common ones include:

• Mission and vision – detailing the purpose and directions of the board and what it hopes to achieve.
• Ethics/conduct policy – designed to set expectations for and guide the behaviour of board members, including disciplinary measures for non-compliance.
• Conflict of interest policy – designed to provide guidelines for identifying and dealing with potential or real conflicts of interest.
• Grievance policy – outlining procedures for dealing with complaints.
• Email Policy – outlining how and under what circumstances email can be used for official board business.
• Self-evaluation policy – detailing performance standards for the board and outlining measures for ensuring evaluation and improvement of performance.
• Board-staff relationship policy – outlining the various responsibilities of board and staff members.
• Volunteer policy – outlining how and under what circumstances volunteers can be recruited and their place within the organisation.
• Financial management practices – detailing minimum standards and practices for management and reporting of finances.
• Accountability policy – outlining standards for reporting of board information and to whom the board will be accountable.

All board members should have a copy of each of these policies and should ensure they are familiar with their content.

Meeting agenda

A meeting agenda is really no more than a list or outline of things to be considered during a meeting. Agenda styles will differ from board to board but there are usually some similarities. They will often include:

• A point form list or index showing the main items to be discussed during the meeting
• A copy of the minutes of the last meeting
• A president's report
• A financial report
• A CEO's report
• Committee reports
• General business, i.e. general items for discussion or action during that meeting. Each item is numbered separately and the agenda should include a summary of the issue and relevant supporting documents. Sometimes these items will be accompanied by a recommendation for action.
• An item allowing for introduction of "urgent business", which will include things not on the agenda that cannot wait until the next meeting.

Meeting agendas should be posted to board members well ahead of meetings to allow time for detailed reading and clarification if required. It is important that all members have read and understood the agenda and any supporting documents before any meetings take place.

Financial papers

Financial accountability requires that all transactions are recorded, all payments authorised and that the board does not authorise the expenditure of more money than it can afford. The board's financial documents should allow members to have on hand at any given moment what is owned, how much money is on hand and what needs to be paid. Board members should become familiar with all financial documents as financial accountability is one of the board's most important areas of supervision.

Financial procedures manual

Most boards will have a financial procedures manual, which outlines financial processes and systems, the responsibilities for administrative tasks, authorisation limits and procedures, and descriptions for how functions such as paying bills, depositing cash and transferring money between funds are handled.

Auditor's report

Most boards have their accounts audited every year. The auditor will produce a financial statement showing income and expenditure and a balance sheet showing the assets and liabilities.

While not always legally required, a properly conducted audit can assist the board to carry out forward planning, give valuable information to potential donors and generally lends credibility to the organisation.

Budget papers

Budgets usually coincide with financial years and cover the two main areas of expenditure and income, showing how much money is expected to be coming in and how much will be going out. As budgets are generally no more than an educated guess on incomings and outgoings, they are often reviewed during the year to take account of changes that may occur. Budgets are an invaluable tool for board members in carrying out their duty of financial oversight.

Financial plan

While a budget serves a short-term (12-month) function, a longer range financial plan is designed to allow boards to plan for the future, anticipating spending and income for the next three to five years. Like the budget, an organisation's financial plan is an invaluable tool for board members in carrying out their duty of financial oversight.

Insurance documents

There are a range of insurance policies regularly taken out by boards. Among the more common are policies that provide:

• Public liability insurance (to protect against negligence claims against the organisation); and
• Directors' liability insurance (to protect individual board members against negligence claims).

The higher the risk, the more insurance you and your board will require. The board should have on hand details of what insurance it holds for its board members, how much coverage is provided and for how long members will be covered. You should read the policies and familiarise yourself with the language they use. If in doubt, get someone to explain it to you.