“Art lives on constraint and dies of freedom”
[Michelangelo]

Paraphrasing Michelangelo, we might also say that the art of governance is catalysed by constraints and lacks focus or coherence when directors are free to do what they want.

For those of us who think of governance as a system of controls, it may seem that the term ‘governance freedoms‘ is a non sequitur. Just as rights and responsibilities are a ‘bound pair’, so too are governance freedoms and constraints. Autonomy and accountability are continuously being balanced in the art of governance – for example when seeking the ‘sweet spot’ trade-off between strategy and risk.

As illustrated in the header image above, the sphere in which we exercise our freedoms is circumscribed by the sphere of constraints which surrounds it.

Constrained freedoms

The Australian Law Reform Commission commentary on justifying limits on rights and freedoms notes that:

“Important rights often clash with each other, so that some must necessarily give way, at least partly, to others. Freedom of movement, for example, does not give a person unlimited access to another person’s private property, and convicted murderers must generally lose their liberty, in part to protect the lives and liberties of others. Individual rights and freedoms will also sometimes clash with a broader public interest—such as public health or safety, or national security.”
https://www.alrc.gov.au/publication/traditional-rights-and-freedoms-encroachments-by-commonwealth-laws-alrc-interim-report-127/1-the-inquiry-in-context/justifying-limits-on-rights-and-freedoms/

While rights often serve to protect specific freedoms, not all freedoms are explicitly codified as rights within legal or social frameworks. For instance, one might have the freedom to choose a particular lifestyle without it being enshrined as a specific legal right.

The authority granted to directors by their constitution is often framed quite broadly as follows:

“Subject to the Act, the Association has power to do all things incidental or conducive to achieve its purposes.”
“The Committee may exercise all the powers of the Association except those powers that these Rules or the Act require to be exercised by general meetings of the members of the Association.”
(Model Rules for an Incorporated Association, Associations Incorporation Reform Regulations 2023)
https://www.consumer.vic.gov.au/clubs-and-fundraising/incorporated-associations/running-an-incorporated-association/rules

These clauses permit wide discretion, while also referring to legal and constitutional limits on powers. These include the core director duties, which are expressed a little differently for companies limited by guarantee compared with charities.

The choices we are ‘willing’ to make

“Philosophers who distinguish freedom of action and freedom of will do so because our success in carrying out our ends depends in part on factors wholly beyond our control. Furthermore, there are always external constraints on the range of options we can meaningfully try to undertake. As the presence or absence of these conditions and constraints are not (usually) our responsibility, it is plausible that the central loci of our responsibility are our choices, or “willings.”
https://plato.stanford.edu/archIves/win2006/entries/freewill/

Board decision making is the expression of collective will. The mere process of having to accommodate a range of perspectives to arrive at a consensus (or a majority view) means that this is not the same thing as ‘free will’. The decisions we make as directors are shared ones, indicating our willing-ness to act in a manner consistent with the policy or intention defined by the decision.

NFP Freedoms (and Constraints)

Nonprofit, community, and public sector boards operate within a spectrum of ‘governance freedoms’, reflecting the balance between autonomy and accountability. These freedoms are influenced by various factors and constraints, including regulatory and ethical frameworks, organisational missions, resource limits, and stakeholder expectations.

• Mission Alignment

The core mission of an organisation serves as a guiding compass for governance decisions. Boards have the freedom to strategise and innovate within the scope of their mission. However, deviating from the mission can lead to mission drift, undermining organisational integrity and stakeholder trust. Therefore, while boards possess strategic freedom, this is bounded by the necessity to remain true to their foundational purpose.

• Stakeholder Engagement

Effective governance involves engaging with various stakeholders, including donors, beneficiaries, employees, and the broader community. Boards have the autonomy to determine the extent and manner of this engagement. Proactively involving stakeholders can enhance decision-making and legitimacy, whereas neglecting stakeholder perspectives can constrain the board’s effectiveness and freedom to operate.

• Resource Allocation

Boards exercise discretion in allocating financial and human resources to fulfill organisational objectives. This includes setting budgets, approving major expenditures, and overseeing fundraising efforts. While boards have the freedom to make these decisions, they are constrained by fiduciary duties to act prudently and in the organisation’s best interest.

• Policy Development

Boards are responsible for developing policies that govern organisational operations. This encompasses establishing ethical guidelines, operational procedures, and performance metrics. The freedom to craft these policies allows boards to tailor governance structures to their unique contexts. However, policies must align with legal standards and ethical norms, ensuring accountability and public trust.

• Leadership Selection

Selecting and evaluating executive leadership is a critical function of boards. They have the autonomy to define leadership criteria, conduct recruitment, and assess performance. This freedom enables boards to shape organisational culture and direction. Nonetheless, this autonomy is balanced by the responsibility to ensure leadership aligns with the mission and values.

• Strategic Planning

Boards engage in strategic planning to set long-term goals and objectives. This process involves analysing internal capabilities and external environments to chart a course for the future. While boards have the freedom to envision and plan, they must manage risks, remain adaptable to changing circumstances and responsive to stakeholder needs.

A taxonomy of freedoms

Freedom of association, freewill, and free speech are just three of a large array of freedoms that we relate to according to our cultural, social and personal circumstances. The partial taxonomy below highlights many of these.

Different modes of freedom (freedom of / freedom to / freedom from) are illustrated in the next chart, along with the point that often, all three modes are invoked in the exercise of certain freedoms.

The kind of freedom we are referring to in any given context can usually be inferred by the antonyms we use alongside the term. For example, slavery, tyranny, incarceration, access, fear, addiction, censorship and prohibition each invoke a different counterpart freedom. A listing of selected freedoms and their antonyms are offered below.

Various reflections on freedom in the next chart invite us to think further about what we mean when we say we seek freedom – for ourselves or for others.

Degrees of Freedom

Varying degrees of freedom in both speech and association shape the practical exercise of these rights. While they are protected in principle, the context, setting, and regulation determine their real-world application, making each type of freedom a spectrum rather than a binary state.

The degrees of freedom of speech determine the balance between expression and responsibility, shaping how, where, and to what extent individuals can communicate their ideas. Legal limitations, platform rules, social consequences, and national security concerns are just some of the constraints on this freedom.

The degrees of freedom of association dictate how inclusive, autonomous, and politically unrestricted group formation and participation can be. Legal status, restrictions on extremism, employment and political affiliations, and international constraints (e.g. trade restrictions) are amongst the factors that can affect the degrees of freedom of association.

Conclusion

The governance freedoms available to nonprofit, community, and public sector boards are characterised by a dynamic interplay between autonomy and accountability. Boards possess the freedom to make decisions across various domains, yet this autonomy is framed by legal obligations, ethical considerations, and the imperative to serve the public good.

Navigating this balance effectively is essential for achieving organisational success and maintaining stakeholder trust.

See also:
The Scales of Governance: Weighing options, arguments, evidence and consequences
Circles of Control: Personal, Group and Organisational
Governance Guardrails and Guiderails
Golden Means or Ends
Moral Governance – Part 1
Social Capital and the Thickness of Trust