Australian study reveals importance of non-executives to third sector

A study from the Australian Institute of Company Directors has highlighted the vital role played by non-executive directors in the not-for-profit (NFP) sector.

The Directors Social Impact Study 2011 has shown that on average, non-executive directors of third sector organisations in Australia spend around seven working weeks a year on their role as a director, with 89 per cent operating on a voluntary basis.

In doing so, they play a crucial role in upholding corporate governance standards, while assisting in areas that build capability among organisations, such staff mentoring.

John Colvin, chief executive officer of the institute, said these functions are vital, especially given the limited funding and resources afforded to NFP bodies.

"NFPs need to be able to tailor a set of governance arrangements to suit their individual circumstances and adapt these arrangements over time as circumstances warrant," he noted.

Earlier this year, the organisation published a report showing that companies across Australia could benefit from an improved commitment to boardroom diversity.