Large PBCs often employ a CEO sometimes called a ‘general manager’ or ‘executive manager’. While the directors are responsible for their corporation’s performance, they often hire a CEO to manage day-to-day operations.
It is advisable to recruit an experienced CEO who can provide leadership and direction for a corporation. The CEO is the ‘face' of a corporation who outsiders meet and deal with. The CEO should have a wide range of skills and substantial knowledge with a very good 'head' for business and dealing with people. The CEO continually reports to the directors on the corporation’s activities and current situation. Before any action can be taken on goals, policies or strategies the CEO/manager must have the approval of the corporation’s board of directors.
ORIC provides free recruitment assistance (ORA) to find a suitable CEO. They help to develop a job description, advertising a vacancy, vetting applicants, conducting interviews and preparing a selection report. Contracts for CEOs can differ across jurisdictions but ORIC provides templates.
Attributes and duties
The CEO is the highest staff appointment in the corporation and whoever sits in this position has a large impact on its progress and wellbeing. The CEO’s job is to manage the corporation as the head administrator and under direction from the board sets the corporation’s goals, develops a business plan, formulates the corporate strategy and lays down the standards and guidelines for the corporation staff.
The CEO looks after the corporation’s operations, for example:
- monitors the financial outlook to ensure it remains favourable
- allocates the corporation’s resources in such a way that the corporation can achieve its goals and, at the same time, maintain financial stability
- provides the directors with regular status reports on individual programs to show how they are performing against targets outlined in the business plan.
- creates an organisational structure for clear lines of reporting and defining areas of responsibility
- prepares a report for the annual general meeting (AGM) to inform members about the past year’s activities and to explain key decisions made by the directors.
The legal duties of a CEO are:
- a duty of care and diligence - for example, officers should prepare accurate and timely reports for the directors so that they are well informed and in a conﬁdent position to make decisions in the best interests of the corporation
- a duty of good faith - officers should always make decisions in the best interests of the corporation as a whole, never for their own personal advantage
- a duty to not improperly use position or information - officers must not misuse their position, or use information obtained as a result of their position, to gain a beneﬁt for themselves, someone else or to cause harm to the corporation.
The CEO is personally responsible to meet them and needs to be accountable to the directors, members, community and stakeholders such as funding bodies, partners, government, and the public.
Separation of roles
The roles and responsibilities of the board and the CEO are very different, and it’s important to keep them separate. The directors’ role is to:
- recruit the CEO and induct them into the culture of the corporation and the communities it represents
- share their vision and support the CEO to translate it into action
- regularly assess the CEO’s performance.
The CEO’s role is to realise the directors’ vision and enable them to see what progress has been made:
- be the champion—generate enthusiasm for the mission among staff, funding bodies and other stakeholders
- convert the vision into a step-by-step plan and secure staff and resources to carry it out
- track progress—and income and expenditure—and provide regular reports to all the directors.
Because a CEO can have a significant impact on the success and results of the corporation, it's vital that directors have a way to keep the CEO accountable for their performance outcomes. It's best to have a mix of informal feedback (both ways) and a formal evaluation process, usually six-monthly or annually, to check how the CEO is going in fulfilling the role set out in their position description and duty statement.
Training and mentorship
CEOs can grow and develop their personal and professional skills. Training opportunities can be found on the PBC website.
CEOs can also build their capability through mentorship with a more experienced person. For example, an experienced business person can support the CEO’s development by sharing resources, expertise, skills, perspectives and values. A mentor can also provide a sounding board for ideas and give advice or guidance.
For more information on mentoring including templates on mentorship agreement, mentoring plans, checklist and evaluation see this board mentoring toolkit that is also relevant for mentoring CEO’s.
CEO and management tools
- Maps to success - Successful strategies in Indigenous organisations, AIATSIS, 2007
- Remuneration - a report benchmarking the salaries of Aboriginal and Torres Strait Islander corporations, ORIC, 2013
- Top tips for CEOs of Aboriginal organisations, Forum for Directors of Indigenous Organisations, 2018
- The vital role of a CEO, ORIC, 2013
- Factsheet on duties and of directors and other officers, ORIC, 2017
- CEO accountability, ORIC, 2018
Training and mentorship
- A range of courses for the not-for-profit sector are offered across Australia, Australian Institute for Company Directors
- Board mentoring toolkit, Department of Environment, Land, Water & Planning, VIC, 2016