Governance in the Not-For-Profit Sector: In International Perspective

Abstract

The Global Financial Crisis demonstrated the importance of accountability, transparency and good corporate governance for both not-for-profit (NFP) or for-profit organisations. Not-for-profit entities on an international basis play a significant role in world economies in relation to welfare, economic growth and employment (OECD 2009). This research explores the current type of governance mechanisms used to monitor and control international not-for-profit (NFP) entities and to compare to current practices for Australian NFPs. The question explored is how much control is exercised by mainly voluntary directors in a sector dominated by time and budgetary constraints. NFP entities were analysed for their corporate governance in terms of accountability in their annual reports, which also includes analysis of the board of directors. Although international not-for-profit entities are a significant contributor to international social responsibility as well as employment and GDP, this research shows a significant lack of accountability by reviewing their 2010 annual reports. The Australian NFPs demonstrated greater transparency and governance in their annual reports than international NFPs.