Trust, goodwill and a desire to help others sit at the heart of all NFP organisations. These values drive passionate teams to work long hours for causes they believe in, volunteers to give their time freely, and communities to support missions that matter. But trust without structure leaves room for misguided decisions that put people (and your purpose) at risk.
The unfortunate reality of misconduct is that it often isn't caused by malicious intent. Instead, it's a symptom of unclear expectations, blurred lines, well-intentioned shortcuts, or processes that haven't kept pace with the organisation's growth. These symptoms are often reflective of poor habits around organisational decision-making, which eventually lead to misconduct, despite the best intentions.
When good intentions meet poor systems
Many NFPs, especially smaller or community-based ones, rely heavily on informal processes, relationships and goodwill to get things done. In these environments, trust is often favoured over procedure. While this approach can lead to innovation, flexibility and time-saving, it also creates vulnerabilities. As a result, governance is often reactive and rarely consistent, leaving organisations exposed to unintentional misconduct.
Consider this scenario: A senior staff member hires someone whom they already know, stating that they'd be perfect for the job, so no need to do detailed pre-employment checks.
Could this decision be motivated purely by good intentions? Yes, absolutely.
Is this decision, however, the result of practising good NFP governance? Unfortunately, no.
Could this decision lead to possible misconduct? Yes, absolutely.
As NFPs are often required to meet expectations from regulatory bodies and communities alike, special care must be taken to ensure the organisation's mission and hard-earned reputation is not jeopardised.
What unintentional misconduct looks like in practice
In a previous article on how to recognise the early signs of misconduct in NFPs, we listed some common workplace misconduct examples for NFPs. When the misconduct is unintentional, however, it manifests in different ways. Unintentional misconduct often emerges when there is a gap between organisational values and operational realities. In NFPs, especially those where the pressure to deliver services to vulnerable populations is constant, these situations become even more complex. Beyond the (lack of) hiring process example above, some other examples of unintentional misconduct are:
Misguided account balancing - A program manager uses funds from one grant to cover an urgent expense in another program, intending to "balance it out" later. What starts as temporary cash flow management becomes ongoing misallocation that violates funding agreements and jeopardises future revenue sources.
Operational compromises - Staff skip mandatory training or bypass safety protocols to meet service delivery deadlines, reasoning that helping clients takes priority over administrative requirements. Over time, this creates systemic non-compliance and work, health & safety risks.
Decision process informality - Key decisions are made in corridor conversations or quick phone calls between trusted colleagues, with formal Board approval treated as a rubber-stamp process. Critical oversight mechanisms are effectively bypassed.
These situations typically start with people genuinely trying to do the right thing within challenging circumstances. But without proper governance structures, good intentions can lead to serious consequences.
Beyond policies on paper
NFPs need more than policies gathering dust in filing cabinets. They need practical governance structures that are lived, understood and applied in daily operations. This is especially critical in resource-challenged environments where staff wear multiple hats and processes must be both thorough and efficient.
Staff and volunteers need to know not just what is expected of them, but also why – especially in environments where passion for mission outcomes can override attention to process. When people understand that governance protects both the organisation and its ability to serve the community, compliance becomes less about bureaucracy and more about stewardship.
Embedding governance into daily practice
Creating effective governance doesn't require complex systems or expensive consultants. It requires thoughtful approaches that embed ethical decision-making into everyday operations. Some actions we recommend:
Start with real-life scenarios - Develop practical examples specific to your organisation's daily operations. How should staff handle grant fund allocation decisions? What does proper recruitment look like when you need to fill a position quickly? How should performance concerns be addressed in small teams? Use these scenarios in team meetings, volunteer onboarding, and internal communications to make governance tangible and relevant.
Create simple decision-making tools - Develop straightforward checklists for common situations like procurement approvals and conflict of interest declarations. Implement a three-question decision guide for all key initiatives: Does this align with our values? Are there rules or agreements this could breach? Would I be comfortable if this were made public?
Make the 'why' clear - Help your team understand that governance isn't about creating barriers – it's about protecting the organisation's ability to achieve its mission. When people understand the reasoning behind processes, they're more likely to follow them, even under pressure.
The clear governance advantage
As you can see, misconduct doesn't always begin with ill intent – but without clear governance, it can lead to serious consequences that threaten everything your organisation has worked to build. Damaged relationships, lost funding, regulatory sanctions, and community trust that take years to rebuild.
The NFPs best positioned to protect their people, reputation and impact are those that invest in governance not as a compliance exercise, but as a daily practice. They understand that strong governance doesn't stifle mission delivery – it enables it by creating clear frameworks for ethical decision-making.
When governance becomes part of organisational DNA rather than an afterthought, teams make better decisions under pressure, stakeholders have confidence in organisational integrity, and the mission remains protected even when challenging situations arise.
Moving from reactive to preventative
Effective governance is ultimately about shifting mindsets from reactive crisis management to preventative stewardship. It's about recognising that unintentional misconduct is often a byproduct of unclear systems, not bad people, and taking proactive steps to address the root causes.
This means regularly reviewing processes to ensure they're still fit for purpose, providing ongoing training that helps people navigate grey areas, and creating environments where asking "is this the right way to handle this?" is welcomed rather than seen as slowing things down.
The organisations that thrive are those that see governance as an investment in their long-term sustainability and community impact, not a burden that detracts from their mission.
How Centium can help
At Centium, we understand that effective governance in NFPs requires more than template policies – it requires practical systems that work within resource-constrained, mission-driven environments.
Our experienced team helps organisations develop governance frameworks that embed ethical decision-making into daily operations. We work with Boards and management teams to identify potential risk areas, create practical tools for common scenarios, and build organisational capacity for ongoing governance improvement.
Whether you need support developing organisation-specific guidance, training your leadership team in effective governance practices, or conducting reviews to identify areas for improvement, we're here to help your NFP build strong foundations that protect and enable your mission.
To learn more about our governance and risk management services, or to discuss your specific needs, please contact our Managing Partner, Phil O'Toole, directly at the contact details below.
By Phil O'Toole
Managing Partner
