Half of All Aussie NPOs are Failing to Manage Culture

By Andrew Heaton

(image via Just Resources)

Around half of all Australian charities and not-for-profit organisations (NPOs) lack a formal plan or agenda to manage organisational culture, a national survey of NPOs has found.

In its 2017 NFP Governance and Performance Study involving a survey of almost NPO 2,000 directors and senior executives as well as nine focus groups, the Australian Institute of Company Directors found that whilst directors recognised the importance of organisational culture, many were not taking formal steps to actively manage that culture.

According to the survey:

  • Only just over half (52 percent) of all boards have received one or more formal reports or KPIs about organisational culture over the past year.
  • Less than half (48 percent) have had culture as a formal part of the board agenda at any stage over the past year
  • Only 33 percent agree that their board monitors culture closely
  • Less than half (43 percent) say that culture is managed well
  • Less than half (45 percent) say the culture of their organisation is clearly defined.

According to the report, strong culture is critical to the success of organisations.

Whereas positive organisation culture builds cohesion and drives high standards and integrity, poor culture impacts workplace moral, trust of donors and government and ultimately, the safety and well-being of clients.

Signs of a poor culture, it said, including high staff turnover or disengagement; bullying or workplace injuries; frequent stakeholder complaints; a lack of respect for organisational policy; a lack of tolerance for different opinions; and a reluctance to talk about culture.

“Getting culture right is fundamental to achieving an organisation’s mission and strategic objectives,” the report said.

“Strong culture is critical to building morale within a workforce, creating cohesive teams, and ensuring high standards of integrity.”

“By comparison, poor culture can undermine an organisation’s ability to achieve its goals.”

In other findings, the report found that:

  • Only one third (33 percent) of all directors and executives felt their organisation was taking on sufficient levels of risk.
  • Many directors in focus groups expressed misgivings about the appropriateness of NFPs making a surplus or profit.
  • Reputation management is stronger, with more than two-third saying that the desired reputation of their charity is agreed to by the board and either is or is expected to be considered in major decision making.

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