Not so long ago, I came across an NFP which had been stripped of nearly $300,000, thanks to a recalcitrant director. It left everyone distressed and dismayed. The police were called in and the director sued. The organisation was left in disarray and people were asking: how could this have happened to us?

This organisation either had no values or its values were well and truly buried such as to create deep systemic issues, resulting in fraud and theft. It is an extreme example of what can go wrong. Of greater prevalence and concern are the subtle weakening of like organisations where values are relatively unimportant and are not 'lived out', commonly resulting in ineffectiveness, low morale, poor productivity, conflict or dysfunction and delivering less than optimal outcomes.

Probably all NFP's have values in their constitutions or policy documents where perhaps they are: 'done and dusted, best forgotten'. Some go further and have their values displayed on boardroom walls, looking like bland wallpaper. Some are even good at promoting their values. But, promoting them is one thing. Living them out so they inform and shape all organisational attitudes, decisions and behaviours is quite another.

Organisational values are core beliefs which are immutable, inviolable and non-negotiable. As such, they are to be embraced and actioned by everyone within an NFP. They should give the organisation focus and direction toward its better future. They are to act like super glue, holding the NFP together to reveal its true identity. External stakeholders should be made aware of the NFP's values and depend upon them.

If the values of any NFP are to become valuable at all, essentially they must be re-captured in terms of importance, be 'lived out' day by day, and become part of the heart and soul of the organisation. How so?

One of the most diabolical things that should not be done is to download a list of 100 popular corporate values (undoubtedly, including the ubiquitous word: 'integrity'!), and have the full team select their ten top preferred values. Instead, the leaders first need to agree upon five core values by asking:

Which beliefs form the super glue holding our NFP together?
Which beliefs go to the very essence of our NFP's identity, as evidenced in day by day activity?
Which beliefs impact our key external stakeholders giving them value and benefit, instead of beliefs merely providing us with an internal benefit?
Which beliefs best serve our mission and purpose, contribute to the fulfilment of our vision, and shape our culture as an NFP?

But, words are words. How can the values be remembered and actioned? This is where the leaders must become creative. Each value is to come alive and be of practical effect, as follows:

First, create a short descriptor and an image or picture for each value. With a value of 'character', say, the descriptor might be: 'stand firm" and the picture might be of an individual standing on a cliff top, with legs firmly planted, and looking out. People can then visualize and relate to that value
Secondly, briefly describe what this value of 'character' actually means within the organisation so as to give it a life of its own, within its own context. For example: "We stand firm. For us, this means that we will not compromise our ethical standards or our honesty and integrity, never, ever. This goes to our character."

Having done this in words and pictures with all five values, they can be distributed far and wide within the NFP for additional input. The purpose is for everyone to suggest "I" statements, giving the practical outworking of each value. In this way, the values become well entrenched to intentionally shape the organisation and everyone in it. The best five "I" statements, as judged by the leaders for each of the five values, then become a practical, important part of each value. The following "I" statements are illustrative for a value of 'character':

"As a result:

I will always be fully candid with my customers, my colleagues and others on a daily basis
I will speak and write only that which is 100% the truth and never lie or deceive others
I will be open and transparent in my words and actions so that my customers, my colleagues and others come to trust me implicitly and know that I am always dependable
I will always do the right thing by my customers, my colleagues and others, and always act ethically
I will always be true to myself and honour and respect all others".

Having brought values to life in this way, an NFP might then make its values prominent by:

The five values, pictures, descriptors and "I" statements being plastered around the walls of the NFP as a constant reminder
Meetings of the board, leaders and team members becoming focussed on the values and any remedial action for adherence, with the CEO becoming the 'overseer of values' as part of their job description and reporting regularly on organisational values
Recruitment of new people being determined by their values and fit within the organisation and not just by their antecedents and qualifications (ask them at interview about the three personal values which sustain them in life)
Performance being reviewed for adherence to values
People being exited for incompatibility with organisational values
Relationships with external stakeholders being based on congruity with values
Values being disseminated via promotional material, on social media and on web sites.

In these ways, everyone will be constantly reminded and held to account for adherence to values in respect to their attitudes, words, behaviour and decisions. The NFP will be shaped and transformed as the five values are 'lived out' day by day.

CEO's, does your NFP value its values? If not, maybe try some super glue!

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by a member of our Legal Team

David Sharrock

For further information contact

Mitchell Zadow

Mitchell is the Managing Principal of our law practice.

He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate. For further information, contact Mitchell on his direct line (03) 8561 3318.

ACNC Governance Standards for Charities

Leaving a Gift to a Charity

Important changes to Charity Fundraising

Not so long ago, I came across an NFP which had been stripped of nearly $300,000, thanks to a recalcitrant director. It left everyone distressed and dismayed. The police were called in and the director sued. The organisation was left in disarray and people were asking: how could this have happened to us?

However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Supreme Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be published on the Supreme Court website for at least 14 days prior to any application being lodged.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself usually does not take long to process the application (maybe another 1 to 2 weeks) and this is completed using the electronic Supreme Court filing system. This means you do not have to go to a Court hearing. The timeframe for processing applications for Letters of Administration is even less, given that there is no Will document for the Court to consider. There is also a general discretion for the Court to raise a 'Requisition' asking for more information before they review the application - this can sometimes delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate or Letters of Administration. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.

You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE:

(03) 8561 3318

Free Property Law webinar -

Land Development and Joint Ventures