Cyber-risk key concern for NFPs

The findings from a US study into the concerns of not-for-profit (NFP) organisations have found strategic planning and oversight, coupled with cyber-security risk, is a key concern for many NFPs in the coming year.

The 2014–2015 NACD Nonprofit Governance Survey presents a wide variety of current, relevant data on governance trends and practices at NFP organisations, with responses from 750 directors.

From a list of 21 issues, respondents were asked to select their board’s leading priorities for the year. “Strategic planning and oversight” was the most frequently selected priority issue by NFPs.

Another big issue was cyber-security risk with sizable portions of respondents saying they were “not satisfied” with the quality or quantity of information their board received from management regarding such critical issues as strategy and non-financial risk.

Forty-two per cent of respondents feel that their boards have “little knowledge” regarding cyber-security risks. This compares with 32 per cent of respondents from private companies and 19 per cent of respondents from public companies.

Forty-three per cent of respondents said they were dissatisfied with the quality of information, and 59 per cent said they were dissatisfied with the quantity of information their boards receive.

Nancy Milne OAM FAICD, a Sydney-based director, says cyber security and risk differs from board to board and this is also likely to be the case between different countries. “My experience has been that we have received good information. This was due to a solid focus on governance. This is the benefit of applying that governance discipline to a not-for-profit.

“One of the real issues we face here in Australia is the measurement of outcome for NFPs. At a recent AICD seminar, we discussed precisely this point. It’s really an important issue in terms of working out whether objectives are achieved. This comes back to the issue of strategy and oversight as mentioned earlier.

“Being able to measure and focus on outcomes seems to be the most important issue and this is tied in with funding. I would imagine we have far more government funding of NFPs than in the US. This could be a differentiator between what we have learned in the commercial and private sectors about governance and applying this appropriately in the NFP sector to enhance results.”

For more information, see 2014–2015 NACD Nonprofit Governance Survey