Boards
Not-For-Profit vs Listed Governance
Kogan.com and Life Without Barriers Chair Greg Ridder on NFP governance complexity, client-centricity when clients can't advocate, and director...
Balancing Representation and Risk on NFP Boards
Mike Gonski on NFP director liability, stakeholder representation risks, and what actually works when board decisions go against your community
Richard Conway
Mar 7, 2026
"I think dealing with risk is really hard — especially without good experience or good mentors around you."
I recently had a conversation with Mike Gonski that I think will resonate with anyone involved in NFP governance — particularly those who've navigated the competing pressures of representation, board risk, and resource constraints that come with the territory.
Mike chairs ReachOut Australia and Carriageworks and is a partner at Herbert Smith Freehills. His experience spans the full arc of NFP governance, from painting the walls of Story Factory as its founding chair through to overseeing multi-million dollar organisations with sophisticated governance requirements. That breadth gives him an unusually clear view of where NFP boards tend to get these issues right and wrong.
The Hidden Risks in Well-Intentioned Representation
There's a genuine tension in NFP governance between the aspiration to represent the communities you serve and the legal realities of what board membership actually demands.
Mike worked through this directly at ReachOut, which for a period mandated that a young person with lived mental health experience sit as a full board director. The intent was sound. The challenge was that board governance involves obligations — personal liability for safety risks, wage theft, and a growing list of directors' duties — that require experience and mentoring support to navigate safely.
"You worry that while they're there for their perspective — and that's clearly of use — is it not better to be able to ask their perspective outside of board, in a safe place where they can express their opinions?" Mike puts it clearly. The question isn't whether those perspectives matter. They do. It's whether a formal board seat is the right mechanism for capturing them.
ReachOut has since moved away from the mandatory directorship. The stakeholders are still heard — just differently.
What Actually Works
Mike describes an AICD observer program that he considers a genuinely useful pathway: a year's placement on an NFP board as an observer, running alongside a governance training course and a cohort of peers. If the fit is right, the board has the option to invite that person to join as a director once they've built some experience. It's a considered pathway rather than a direct appointment, and it protects both the organisation and the individual.
For organisations that can't accommodate even an observer arrangement, Mike is pragmatic about the empty chair approach — using it as a discipline to ask what a key stakeholder would think of a given decision, without requiring their physical presence.
Managing Stakeholders When the Decision Goes Against Them
This is where Mike's legal and governance instincts converge. NFP stakeholders — donors, service users, community advocates — are often deeply passionate about the mission, and that passion doesn't disappear when the board makes a decision they disagree with.
Mike's view is that the quality of the relationship — built on transparency and open communication — determines whether a difficult decision can be navigated or becomes a governance crisis. "If you are open and transparent and you have great relationships with those stakeholders, hopefully even if you are giving bad news to the stakeholder about what you are going to do, then there is a path to take this forward."
He also sees large boards as a practical tool here: more perspectives in the room means more robust debate before a call is made, and that process legitimacy matters when you then have to explain your decision to stakeholders.
Richard Conway is the founder of boardcycle, the board meeting platform designed for Company Secretaries. Create, manage and automate your board agendas, run sheets, shell minutes, action tracking and more with boardcycle CoSec.
[00:00:00] In this episode, host Richard Conway talks to Mike Gonski, chair of NFPs ReachOut, and Carriageworks about how to ensure that stakeholder perspectives are heard in NFP board rooms.
[00:00:14] Richard Conway: Hello and welcome to Minutes by boardcycle. I'm your host Richard Conway and today I am joined by Mike Gonski.
[00:00:20] Mike, welcome to the podcast.
[00:00:23] Michael Gonski: Thanks for having me.
[00:00:25] Richard Conway: So, Mike's a highly experienced director and chair in the NFP space. He's currently the chair of Carriageworks, which is a former rail yard that's been converted into an amazing event performance and exhibition space here in Sydney.
[00:00:39] And he also chairs ReachOut Australia, which is focused on young people's mental health and wellbeing.
[00:00:45] Mike's also a partner at law firm, Herbert Smith Freehills, and has agreed to speak with me today about how NFPS and Charities can make sure that the perspectives of their stakeholders are heard in the boardroom.
[00:00:56] So, Mike, at ReachOut Australia, you are serving young people with mental health challenges. Previously at Story Factory you were serving children and so those are groups that can't directly serve on the board.
[00:01:09] So, I wanted to ask, how do you ensure that they are represented in board decision making or can they be in a boardroom?
[00:01:15] Michael Gonski: It is an excellent question. And interestingly, at ReachOut in particular, we've actually been through the circumstances to we had mandated for a period that a young person did sit on our board as a full board director rather than as an observer.
[00:01:31] And what was interesting is, is we debated this at the time and actually did come to fruition that while this person might be someone aged, say 18 to 25. I think that by sometimes putting someone on the board of that age, unless you put around them the right mechanisms to help them on a board, I think it can be quite daunting to be a young person on a board. And clearly I can see the irony that I was 25 when I was chair of Story Factory for the first time. I do think that the luck that I had was to have better mentors around me and people who would be there to make sure that I was actually okay, in the role that I needed to do.
[00:02:11] And so if you think of say a youth ambassador at ReachOut, it's quite tricky that for them, you know, they might be a university student, and also may have had lived mental health experience. And unless they have some assistance of people that they can speak to directly, I think some of the concepts they have to deal with at board are very tricky.
[00:02:30] I think dealing with risk is really hard. There would be times where clearly when a safety risk or a risk say about things like wage theft or all these new things that have personal liability for directors are raised.
[00:02:43] I'm not sure without good experience or good mentors around you, it's that easy to work out. How risky is the thing that I'm about to agree to, you worry that while they're there for their perspective and that's clearly of use, is it not better to be able to ask their perspective outside of board in a safe place where they can express their opinions, rather than putting them in a place where they have to take on a governance role as well, with the inexperience and the risk, you know, would say that if you do decide as a board to do that, you should make sure that at least the chair has the time and capacity to be able to very closely assist that young person or make sure that they have the right mentor around them, that they can ask the questions. 'Cause I've seen it as a tricky issue if you can't.
[00:03:33] Interestingly, we now at ReachOut, have moved away and while clearly our youth ambassadors are a very key stakeholder in what we do and I think we do engage very closely with them and take on their feedback. We don't currently have someone on our board and there's no more mandated board directorship for that young person.
[00:03:53] Richard Conway: Yeah, that's interesting Mike.
[00:03:54] So, a follow up on that is, I guess we see in NFPs, but also in commercial organisations, this concept of the voice of a customer type thing being in a boardroom whether it's an actual director or an observer or even that empty chair concept which you sometimes hear about.
[00:04:13] And what I wanted to ask you on that is, it seems to me there's a risk that those things can become tokenistic. They can become form over substance and what do you think needs to be done to make sure that those approaches are actually effective?
[00:04:28] Michael Gonski: Yeah. So I mean things like making sure that if, for example, if we talk of age diversity, which I think is the easiest one to look at, of young people on boards, is we need to make sure that those young people have the right training.
[00:04:43] So, I've love, like sadly, you know, when I started this program didn't exist, but there's this program right now where people can go for a year and sit as an observer on a not-for-profit board and they do an AICD abridged course for the year with a cohort of other young people.
[00:05:02] And if things work out, that board might accept that person onto the board. And it just gives people that ability, I think, to be able to grow and learn and create mentors and connections and things that will make it safe for those younger people to be on boards.
[00:05:19] I think if you can find someone for a board, if you were trying to look for age diversification, who has experience, because maybe they did that program age 25, but now with age 30 and have had five years of board experience, that would be a much safer way to bring one of those people onto the board.
[00:05:37] You know, I think to your empty chair, I think that's an excellent approach to make sure that you are asking that question as a board of saying, what do I think my customer is going to be wanting? But I don't know if you need that person in the board. Clearly the interesting part is often the people in the boardroom will be a potential customer, so they'll always have their ability to give their view on what they think about something.
[00:06:03] But equally if from a diversification perspective, it's a good test to say where do we think we are missing an area.
[00:06:10] Richard Conway: And going to stakeholder, I guess taking into account the views of stakeholders more broadly. One, I guess any stakeholder that you're listening to in the board is usually going to be quite passionate about the mission of an organisation. But the board obviously has to balance everything with things like financial viability, etc.
[00:06:31] So, I guess there can be situations that come up where your stakeholders want the board to do something that the board may decide is actually not in the long term best interests of the organisation.
[00:06:43] How do you navigate those kind of tensions and, can you please both sides in that scenario?
[00:06:49] Michael Gonski: Yeah, of course. I think it's one of the trickiest situations. But, by the way, so common. In terms, especially in the not-for-profit world. Because you might have very vocal people who have a view because of their lived experience in terms of what they're saying.
[00:07:03] But equally, I think that is the role of the chair to actually, clearly you're going to be able to listen to what the stakeholder has to say, and as you say, weigh up all of the different competing interests. But then you've gotta make a call. And sometimes this is really tricky if the call is going against what that relevant stakeholder has suggested.
[00:07:23] But then again, I always think, if you are open and transparent and you have great relationships with those stakeholders, hopefully even if you are giving bad news to the stakeholder about what you are going to do, then there is a path to take this forward.
[00:07:38] And, yet again, that's why I think it's useful to have large boards where you can have great debate and be able to go through each of the issues.
[00:07:47] Richard Conway: And Mike, going back to a ReachOut type scenario, do you ever have a problem of finding it difficult to get input from your stakeholders or from a broad enough range of your stakeholders?
[00:07:58] I guess the question there is, they, obviously they may have problems ReachOut, can help with. But do they really care about how ReachOut is governed or how ReachOut makes its decisions.
[00:08:10] Michael Gonski: Yeah, I mean, it's interesting. I mean, clearly we look after young people now from 8 to 25. And so, there's some very young people that we won't be having interaction with, but again, like for something like a board of a ReachOut, like I need to be comfortable with things like the clinical governance of what we do.
[00:08:31] And so, I would suspect that the clinical governance experts that we have would probably engage with the very young people. If not directly, they would presumably be reading transcripts of some of the peer chat chats that our peer workers are having with the young people. All of that is recorded and clearly anonymous, so it can be provided in a safe way to those clinical governance boards.
[00:08:54] So, I feel like, that is something if you have an expert involved, they can have the interaction with the relevant person to determine if you are what you are doing is working or not, which I just think comes to a general thing that not-for-profit boards need to look at. Which is actually working out how do you show return on investment in what you're doing or how do you actually prove that what you are doing is having a good impact on society?
[00:09:20] Interestingly, I've had to look at how do you actually evaluate in a not-for-profit sense what you are doing? And over time I've seen very different ways of doing that. I've seen the ways where a board might spend a hundred thousand dollars on a university specific review of what you do through to can you get a pro bono piece from a big four accounting firm on an issue. And what has been really interesting is clearly if you're doing things like clinical governance, you need to be able to make sure that that expertise is very tight and has been done properly and to a level that can have the right tick.
[00:10:01] But in some things, I think boards go too far in terms of the spend they have on what they're trying to get as an achievement. So, I'll give you an example. On a board I was on, they did go and get a university view on something that did cost a hundred thousand dollars. And I don't think enough work was done on what was the product that we were gonna get. Yes, it was great that we had a great university brand name on the report, but the report was a thousand pages long. And our stakeholders, which at the time were probably donors, if you had to look at who this really was important to are not gonna read the thousand pages. The universities in the way they'd done it actually had a different reason why they wanted to do this research. It was not to do an executive summary that would say that what we were doing at the charity was working. It actually was very specific to a very specific issue that they were interested in from a research perspective. And I actually think the big four accounting firm, three page glossy thing that could have been given to the donors actually had a better impact and was done on a pro bono way to that fancy report that we had.
[00:11:13] I just think if you're a board, you really need to think through that and get some expertise on, people have been through the evaluation process to work out, do we need the Rolls Royce for what we're doing or not? Clearly in the mental health space, I might need Black Dog and very good researchers to say something is safe because safety is so paramount versus me trying to say, if I need to do a report on how many people use ReachOut services in a particular period, I don't need a fancy researcher to tell me that's something that data can be done by a big four and put in a glossy report.
[00:11:52] Richard Conway: Yeah. And finally, Mike, I wanted to ask you personally as a chair if there's any steps that you try to take to make sure that you understand the perspective of your key stakeholders and if so, are they systematic? Are they ad hoc? And could you run us through what some of them are?
[00:12:10] Michael Gonski: Such an interesting question. I've never actually thought about that. I mean, I was lucky.
[00:12:15] So if you go back to things like Story Factory, I was so close to the ground that I painted the walls of Story Factory because it was just two founders and me at the beginning. So, in terms of the touch points, I was everywhere involved in absolutely everything in that scenario. Whereas I think at Carriageworks, because we have such sophisticated exec, it would be quite rare that I would be, actually going and speaking to artists and performers about what we're doing.
[00:12:44] I think especially in the arts, I think it's important for boards to stay out of the artistic side because clearly I'm gonna have a view on what I think is good and what I think is boring and yeah, I'll probably tell my CEO that, but equally say it in the nice way of saying, I hired you on purpose because you are the person who is good at working out what we should be putting on and what not. I'm not gonna have a view on that other than I'll give my opinion on if I thought it was boring or not.
[00:13:11] I did say to the CEO of Carriageworks’ wife, you need to make sure that Fergus puts on stuff that you and I are not snoring in the front row. Which maybe I shouldn't have said, but was actually really lovely. And to be honest, I think he's put on excellent things. I've never had something where I've been hoping to walk out.
[00:13:29] But again, I feel like by going to things I get a much better feel of what is going on. I really love that last Year our CEO, you know, took some risks, which again, is a theme of, I always go on boards where there is the opportunity for risk taking, but high reward from the risks.
[00:13:49] So again, at ReachOut, I came on at a time where it had been a website for 20 years, and I'm coming in at a time where AI could change this in such a significant way and take it from 2000 people we help a year to 2 million people a year.
[00:14:04] Same at Carriageworks, a time where Carriageworks had been in administration coming out has low amount of funding, but equally the most amazing bones of an organisation. I am super excited about what we can do from there.
[00:14:20] And so, last year Fergus said, well we wanna experiment with some things like a kids program. And so, I took my kids to the circus, then I took them to the roller rink, I took them to all of the things, the First Nations work we were doing, so that I could see do my kids enjoy it. And they did. And that was super interesting to see that clearly, we're on a winner as to what did the public want.
[00:14:45] The hardest part was that you look, you're in a place like Redfern, where if we want to, again, democratise access to the arts, which again, I'm always on my high horse about, I wanna democratise access to law.
[00:14:57] I want democratise access to the arts and access to mental health. It's really tricky at a time where things are expensive to put on. Unless government or philanthropists will pay for the gap to put on free things at Carriageworks, Carriageworks will be an administration again if it continues to put on things that don't make money.
[00:15:17] And that is a very tricky balance and I love being part of that balance because, I can see a way through it.