Good Governance for Non-Profits and Regulators: Maintaining Public Trust and Confidence

In an environment of constant change, rapid evolution of technology, funding challenges, and increased scrutiny and oversight from government and the public, how are non-profit (NFP) and professional regulation entities and their Boards supposed to ensure ongoing adherence to good governance standards? What are these anyway and why do they matter?

Good governance infrastructures and standards should form the foundation for every organization, regardless of size, budget or mandate. While statutes and by-laws describe the purpose, mandate, and authority of an organization, the governance structure and principles adopted help define how the mandates will be achieved. These are essential for Boards, committees, and staff to carry out their roles in transparent, fair, and accountable ways that create public trust and confidence in how the work is done.

Lack of a good governance framework has led to the downfall of too many NFPs and professional regulators. Prime examples of this can be found in the Law Society of British Columbia Governance 2021 Review[1] led by Harry Cayton, which concluded that the regulator was unfit to regulate in the public interest, leading to the creation of a new legal regulator with significant government oversight; and the Real Estate Commission of Ontario’s experience in 2024-2025 where the provincial government determined the Commission had failed to adequately protect the public from harm, resulting in termination of the Registrar and CEO, replacement of the Board and installation of government oversight through a Superintendent[2].

Good Governance Standards

There are a range of legislative standards that apply to most organizations, including generally accepted accounting practices (GAAP), the Not-for-Profit Corporations Act, the Societies Act, PIPEDA and others. These and regulator-specific legislation including regulations and by-laws create the legislative and due diligence foundations for a Board’s and CEO/ED’s fiduciary duties.

Harry Cayton[3] has articulated what are generally accepted as the key principles for good governance for professional regulators in the form of a Checklist for Regulatory Boards (much of which can be applied to NFPs as well):

• Be clear about your purpose as a regulator; keep the public interest as your unremitting focus
• Set long-term aims and shorter-term objectives
• Agree how to deliver and monitor those aims and objectives
• Have competencies for board members whether elected or appointed and apply them to everyone through a selection or nominations process, induction, and regular appraisal
• Have a code of conduct for board members and enforce it
• Declare conflicts of interest, keep a register of interests, and ensure that decisions are not tainted by partiality or bias
• Behave with respect and courtesy towards board members and others
• Commit to corporate decision-making and to corporate responsibility for decisions made
• Appoint a competent CEO and trust them
• Ask for reports that include what you need to know not everything you might want to know
• Make clear decisions and follow-up on their implementation
• Provide the resources needed to deliver your objectives
• Make independence, fairness, and justice for the public and registrants the core values of registration and complaints and discipline
• Continue to keep the public interest as your unremitting focus

Applying the Standards

✓ Boards can implement and monitor these principles and standards through a variety of means including:

✓ Clearly articulated strategic plans and annual workplans

✓ Board Governance Toolkits, and documented policies and procedures

✓ Board and committee Codes of Conduct

✓ Clear terms of reference and skills matrices for Boards and committees

✓ Effective monitoring and evaluation of the work of Boards, committees and the CEO/ED geared toward  demonstrating support of the strategic plans, workplans and governance principles

✓ Documented communication plans

✓ Conflicts Registers

✓ Accountability mechanisms including committee and staff reporting templates, schedules and decision-making supports

While these tools and practices require a certain amount of effort and commitment at all levels, the benefits are significant: clarity and consistency in decision-making; avoidance of conflicts and procedural challenges that can derail effective and constructive debate and decision-making; transparency of purpose and process; accountability; increased staff and volunteer satisfaction and retention; and confidence by the public and government that your organization is achieving its mandate in accordance with good governance standards.

Pink Larkin has a team of knowledgeable and highly experienced lawyers able to assist your organization with adopting these good governance standards in your specific context, training your Board, committees and staff, and developing and implementing appropriate by-laws, policies and procedures to support an effective good governance structure.

The information provided here does not constitute legal advice and is based on details available at time of writing. Perspectives and interpretations around this information will vary depending on the individual circumstances to which they may apply. Consult legal counsel for information and advice relevant to your individual circumstances.