NGO Governance Blog

A New Accountability Resource

Marilyn Wyatt — Tue, 09 Jun 2009 18:24:14 +0000

It’s always exciting when new resources appear on the web aimed at those of us interested in nonprofit governance. I just received word of such a new resource that you’ll want to check out right away.

The One World Trust is a UK-based NGO devoted to “making global governance more accountable.” It’s probably best known for its Global Accountability Report, an annual assessment of the accountability practices of some of the world's most prominent corporations, inter-government organizations, and NGOs.

The One World Trust has just announced the start of a path-breaking project to map nonprofit self-regulatory initiatives around the globe. This initiative documents national, regional, and international efforts to increase NGO accountability through codes of conduct, certification schemes, reporting frameworks, working groups, and other mechanisms.

Underlying all of these efforts is a focus on common norms and standards for NGOs. The effect of these sector-level self-regulatory initiatives, writes the One World Trust, is to build public trust, protect the political space in which NGOs operate, and support the sharing of good practice and learning.

The newly launched portal (www.oneworldtrust.org/csoproject ) includes an interactive map of country initiatives. It’s fascinating to click on individual countries and receive a pop-up summary of accountability initiatives in each location.

Altogether the One World Trust has mapped 309 initiatives worldwide. An accompanying report notes that this is many more than experts had thought existed, but in turn may be only a fraction of actual self-regulatory efforts among the world’s NGOs.

What does this have to do with good governance? Nearly all of the accountability initiatives the One World Trust catalogs include a central focus on the governance of organizations and the behavior of boards. And with good reason: boards are the innermost agent of accountability within organizations. On the micro-level, they are guarantors of accountability much in the way seals of approval and other approaches are guarantors of accountability on the macro- or sector-wide level.

Boards that are doing their jobs guarantee accountability by ensuring that internal processes (especially financial processes) are directed toward fulfilling the nonprofit mission. They give a voice to all stakeholders in major decisions. And they both enforce and demonstrate the norms of transparency, engagement, ethical behavior, and dedication to the common good that lie at the very heart of civil society.

For the moment, the One World Trust database of self-regulatory initiatives is concerned mostly with their geographic spread and scope. One hopes that in the future the portal will include more information and analysis about each initiative’s content.

Personally, I’d love to know how each self-regulatory initiative defines good governance, what it says about the role of a board, and how it seeks to regulate board-like functions such as internal checks and balances and oversight of the chief executive.

But meanwhile, what a great contribution to our resources on governance! Have a look at the site and see what it says about initiatives in your country. The site’s authors are looking for more information, so be sure to contact them if there’s an initiative you know about that should be included.

Three Key Questions

Marilyn Wyatt — Tue, 19 May 2009 05:55:33 +0000

I was Africa last week facilitating a workshop with the executive directors and chairs of about 10 organizations. On the morning of the second day, we turned to the three key questions I believe are the essential questions for a board to ask:

· How do we know if we are fulfilling our mission?

· Are we talking about what’s really important?

· How do we make sure our organization is sustainable and resources are directed towards fulfilling the mission?

I asked the group how their boards would go about addressing each question, and it was fascinating to hear their responses.

The first question about mission was by far the most difficult. At first the group was stumped as to how to respond. Finally someone ventured to say that given the large and idealistic mission statements of most of their organizations, this was an impossible question to answer.

Prodding a bit, I asked how, in that case, the mission could possibly serve as the North Star for board decisions and strategies, as we are taught in all codes of good practice. A long silence followed, and then another participant remarked that it was important to break the mission down into concrete and measurable chunks.

This led into a productive conversation about the types and quantity of information a board needs to measure organizational performance. The group agreed that there is much a board doesn’t need to know in order to gauge mission fulfillment. Whether the board prefers KPIs, written reports, a dashboard, or another approach to data collection, it must work hard and steadily with the executive director to come up with a reporting format that allows it to keep addressing this fundamental question.

The second question about what’s important to talk about elicited three important comments. First, a board must constantly ensure that its conversations focus on governance rather than management issues. This is not easy and takes ongoing practice and discipline, as well as effective leadership from the chair. Second, the board should key its main concerns off of its strategic goals for the organization. Therefore a longer-term strategic plan is essential to structuring the board’s work. Third, the board needs to constantly check itself to make sure it is working on the right issues and doing a good job. Annual evaluations must focus on promoting a solid understanding of governance and effective goal-setting for the organization, the executive director, and the board.

Finally, the topic of sustainability and utilization of resources led to a discussion of the budgeting process. One participant observed that the board of an NGO should be every bit as jealous of resources as the owners of a profit-making business. Only then can there be a surplus — whether it’s financial, knowledge-based, or a network of contacts — to invest in the future of the organization. Another participant added that longer-term strategies, including financial strategies, can be regarded as a form of mission fulfillment deferred into the future.

When we broke for lunch, the group agreed that even though there are no easy answers, all boards must continue to ask themselves how they are going to answer these three key questions. Are there other key questions you feel boards should ask?

Bylaws? Yes, bylaws!

Marilyn Wyatt — Thu, 09 Apr 2009 07:31:18 +0000

My husband’s eyes glaze over when I talk about the beauty of well-written bylaws. For that matter, so do most board members’.

Anyone who bothers to join a nonprofit board is usually a doer rather than an expert in parliamentary procedure. So for them (as for the rest of the world), there’s no item more synonymous with boredom and bureaucracy than an organization’s bylaws, or internal rules of procedure.

Yet for me a good set of bylaws can be strangely moving. When I work with the board of any organization, I always look first at the bylaws to see what rules the board has set for itself. The satisfaction comes from seeing a board that treats its bylaws respectfully as a set of instructions for board behavior. Even more rewarding is a board that has put thought and effort into crafting the bylaws into a definitive, adaptable, realistic guide to good governance.

I often launch discussions at board retreats with a glance at the bylaws, comparing them to current practices. It’s amazing how often significant dissonances emerge. Typically it turns out that board members have never read the bylaws but accept as authoritative however the board currently goes about selecting new members, or making decisions, or even establishing quorums.

When it’s revealed that they’re breaking their own rules, some board members grow disturbed. Others dismiss the relevance of outdated rules, or documents that were needed only for registration. A third group will rail against bureaucratic attitudes in general and insist their board needs to be able to act quickly, with its hands untied.

I admit I’m in the first group. I don’t believe in slavishly sticking to useless regulations, but I do see bylaws as the main foundation for ensuring equal, fair, and objective participation by everyone sitting around the board table.

Disregard for bylaws can lead to sloppy or illegitimate decisions, or board passivity, or abuses of power by the chair, executive director, or a faction on the board. It encourages an “ad hoc-ism” that undermines every principle of governance by design.

So that’s why I’m always ready to talk through with board members where the gap exists between their bylaws and practices and which of the two should be changed. Important as this conversation is, it almost never fails to lead into a higher-level discussion that gets at the heart of what the board does, why it exists, and how it sets the standard for the entire organization.

Glazed eyes? Yes, initially, until we get into these questions of "why?" And "to what end?" Then, if I’m able to open even a few board members’ eyes to the beauty of a well-written set of bylaws, I consider the job a success.

The Ambivalent Chief Executive

Marilyn Wyatt — Sun, 08 Mar 2009 13:42:23 +0000

We often complain about the challenge of having board members who don’t know their duties or don’t set aside enough time to provide support or undergo training.

But there’s another challenge on nonprofit boards doesn’t get the attention it deserves. It’s executive directors who prefer to keep their boards weak and underperforming because it enhances their own control over their organizations.

I’ve been reminded of how difficult this situation is to deal with in a couple of recent consulting jobs. In both cases, I was hired ostensibly to help board members better understand their fiduciary responsibilities and engage in planning for the year. But during the assignment it became clear that the chief executive in fact had ambivalent attitudes about achieving these goals.

At one NGO, the executive director was slow in providing me with the background information I needed to prepare for the board retreat. At first I attributed this to her hectic schedule, but as the date of the board retreat grow closer and the information still wasn’t forthcoming, I began to wonder about other motives. I eventually received a portion of the materials I’d requested, but not enough to give me a full picture of what was really going on in the organization. I also wasn’t prepared for a certain board member—a close friend of the executive director—who conveyed surprising hostility about the training and sought to undermine my effectiveness as a facilitator.

At the other NGO, I received plenty of information to show that the organization was well managed and financially sound. What was missing were board members who could provide checks and balances to the executive director. He was obviously the dominant presence in the organization, and board members lacked either the character or the professional skills that would equip them to question, probe, prod, or criticize his performance. On the day of the retreat he showed great skill at keeping the board busy with small but knotty issues that were off-topic from their main business of governance. It was a glimpse of a tactic that allowed him to run the organization unimpeded.

How did I deal with these situations? In the first case, I was able to guide the discussion towards the reporting requirements of the chief executive. It turned out that some of the board members were unhappy with the brevity and blurry focus of her reports but had never found a way to raise their concerns. By the end of the day their feelings were aired, a new set of reporting expectations were agreed, and the hostile board member was chastised for his rudeness.

The second case was harder, because it was so much a matter of personality. The best I could do was guide the board to focus on their need for new board members, what kind of qualities they sought in them, and why. We talked about the relationships between boards and chief executives and the issues the board should engage in. But I had no real hopes that the situation on this particular board would change until new and stronger board members came on.

Overall, it’s not uncommon for me to encounter NGOs whose chief executive say they’re committed to good governance but don’t really manifest that commitment in their leadership style. I have to admit it’s one of the most challenging situations I face.

The Passionate Board Member

Marilyn Wyatt — Tue, 10 Feb 2009 11:20:46 +0000

Around the world, NGOs are facing massive cutbacks in support. Urgent discussions are taking place about how to weather the economic storm. Chief executives and staff are considering an ever-narrowing range of options—none of them good. Many organizations will not survive.

From my perspective, the crucial question is not only whether, but how board members have joined the discussion. Board members can play an important role during times of economic distress. They can provide a sounding board for chief executives to discuss challenges and priorities; they can bring an objective perspective to proposals for saving money or improving efficiency; they can make phone calls to potential sources of support.

But these are ways that highly effective boards always engage, even when the times are good. In times of trouble, board members can do even more. Sometimes, they can even offer a lifeline to an organization that’s about to go under. But to do so, they must radiate passion for the job.

Here’s an example. Irene, the executive director of small local NGO, asks if I could facilitate a planning session. She’s facing a dire situation. A major grant is coming to a close, and the donor has told her it will not be renewed. She’s beginning to fear the organization will have to shut down.

At the meeting are three board members, Irene, and two staff. Two out of five board members don’t show up—a typical situation. Irene announces that the goal of the day is to come up with a rescue plan or address the possibility of closure. She outlines the current state of affairs and asks board members for their views.

The discussion could have stayed on a speculative level, were it not for Marie, the board chair. She’s been on the board since the beginning and feels the NGO’s downfall would take a part of her with it. Marie grasps that this is a time when the board must offer more than advice and consent. The organization may fail unless board members act.

Marie gives an impassioned statement about the importance the NGO has for her and the board’s duty to ensure it survives. She vows to role up her sleeves and help—for example, by updating the website herself (rather than farming it out to a paid consultant) and publicizing the organization’s activities at the university where she works. Painful cost-cutting measures are agreed—including a modest cut in pay for staff. But Marie offers to contribute a useful sum of money to the NGO and asks other board members to do the same.

Caught up in Marie’s enthusiasm—and blatantly put on the spot—other board members agree to make a donation. They commit to further steps, too: soliciting funds from local businesses, approaching the landlord about a reduction in rent. The day ends with board members planning to get together soon to measure their progress. Meanwhile, Marie will call the two absent members and request they join the rescue plan or get off the board.

I don’t know how they day would have gone without Marie there, but her passion for the NGO was infectious. Board members and staff finished the day with a renewed sense of focus and a determination to succeed.

If you don’t have a natural Marie on your board, is it possible to ask one of your board members to take on this double role of inspiring leader and whip? I’d be interested in hearing your thoughts.

Happy New Year, Global Forum Members!

Marilyn Wyatt — Mon, 12 Jan 2009 12:30:33 +0000

It’s the time for New Year’s resolutions, and I offer these to all nonprofit boards:

Re-read your statutes, articles of association, bylaws, and other governing documents. Are they up to date and current? Do you operate in conformity with them? If there’s a discrepancy between what your governing documents say and the way your board or organization actually behaves, formulate a plan for bringing them into alignment."
Develop a board succession plan. Too many organizations complain about the shortage of good board members but don’t do anything about it. If you have empty positions on your board or certain board members are ready to retire, start a discussion about who to recruit and how best to draw them in. Get a commitment from every board member to help in the search for new members. Don’t give up until you have filled the positions.
Make board orientations an annual event, starting this year. Even if you have long-standing members, it doesn’t hurt to review expectations for the board and individual members on a regular basis. Use the orientation as an opportunity to evaluate the board’s performance, listen to the chief executive’s concerns, fine-tune board processes, and set goals for the coming year. It’s a great way to start the New Year!
Talk to your chief executive about something new. Communications between the board and the top managers can get ritualized and stale, especially in the absence of an urgent crisis. Ask yourself whether relationships in your organizations are stuck in a rut. Does the board take the chief executive for granted? For that matter, does the chief executive take the board for granted? If the answer is yes, what can you do about it? The best antidote may be to take a fresh look at some obvious but often overlooked topics—job descriptions, the 10- or 20-year horizon, or even the organization’s mission.
Shake up board meetings. Meetings are another area where routine can bog down and turn to cement. To get board members’ juices flowing, try something unexpected: a presentation by a special guest; a planning session facilitated by someone other than the chair; a change of location or format. Even if the innovation isn’t as satisfying as hoped, it’s bound to get participants’ attention. A quick feed-back session at the end can pinpoint what works and what doesn’t.
Hold a social event. Board members need to bond as individuals, not just members of a team. Meeting each other’s partners, talking about something other than board’s work on the, and enjoying a good meal together are great ways to reinforce the glue holding the group together. A fun activity is to award small but thoughtful or witty prizes commemorating the special contribution each person makes to the board.

I’d better stop there before the list gets too long. Has your board made any resolution for 2009?

Boards and Fundraising

Marilyn Wyatt — Tue, 09 Dec 2008 11:44:24 +0000

A friend wrote me recently asking about my views on governance and fundraising. For NGOs this is always an important topic—and a difficult one, because the involvement of board members in fundraising differs so much around the world.

At the moment my friend wrote I'd just finished contributing to a study of NGO self-regulatory initiatives in Europe. So my thoughts were focused on the board's responsibility to ensure accountability and transparency in organizations that raise funds. There's a lot of work being done in this area, mostly in response to recent or planned regulatory efforts that aim to ensure ethical fundraising practices and prevent NGOs from being used to finance terrorist or criminal activities.

On the national level, many European countries have watchdog organizations that monitor fundraising practices. These are tightening up their standards, especially regarding external communications, accounting, and the use of funds. Meeting these standards is recognized as a board responsibility ultimately, and many codes and standards are making expectations for internal governing bodies more explicit. This is a welcome development which, one hopes, will lead to more pro-active oversight activities by boards.

A good place to start looking at such standards is the International Committee on Fundraising Organizations, a group composed of accrediting bodies that set fundraising standards in member countries--mostly European, but non-European countries are also members. ICFO's standards are a bit older and general but apply in most contexts. IFCO has issued international standards for fundraising that start with expectations of the board (http://www.icfo.de/standards.htm). Since implementing international standards can be so challenging, most of the action in this area is taking place at the national level.

Another important effort is the INGO accountability charter put out by large international NGOs. The charter, which can be found at at http://www.ingoaccountabilitycharter.org/read-the-charter.php, addresses governance and ethical fundraising. Counter-terrorist regulations are addressed in a recent article by Mark Sidel at www.icnl.org/knowledge/ijnl/vol10iss3/special_2.htm.

Of course, a whole other track of conversation is whether the board should part in fundraising, and if so how. BoardSource is still the best source of advice on this topic. In my experience most boards outside the U.S. don’t see fundraising as one of their duties. This goes for highly professional and active boards as well as those that simply aren’t very involved. My own belief is that there’s no right or wrong answer on the topic and there’s no point in trying to convince boards to fundraise if it’s not part of the local culture.

I’d be interested in hearing from readers whether your country has a national body that determines fundraising standards and if so, what they say about governance.

Boards as Community Builders

Marilyn Wyatt — Tue, 11 Nov 2008 10:58:19 +0000

It was a great time to be in the United States last week. Not only the BoardSource Leadership Forum, but the U.S. presidential elections were taking place. At the Leadership Forum there was an excitement in the air that gave all of the sessions a special charge. I enjoyed the succession of super speakers and social events, spiced up with networking opportunities (best of all with other Global Forum members).

For me the big take-away from the meeting was how much we can learn about governance in big and small ways from other nonprofit leaders, even if they’re working in completely different countries and mission areas. For example, a Native American talked to me about how a simple handshake in her community is done so much differently than in mainstream America. Outsiders who learn to shake hands properly are regarded as showing deep respect for and acceptance of her culture and are welcomed the same way in return.

Isn’t this true all over the world--that working effectively in groups and on teams means learning to take each other’s hands and bind together with respect and acceptance? This at least was the message of the moment in Washington last week, and now back home I’ve continued to think about and delight in this insight. In the nonprofit world all of us in some way take the hands of strangers and offer goodwill and dignity along with more concrete forms of assistance. It’s not hard to extend this image to our boards and realize that, even metaphorically speaking, a board that joins hands around the table has taken the first step to building a warm and effective community within their organization.

Then the next question to ask is: What form does this handshake take?

Please stop by the poll on the home page and let us know whether your organization has a code of conduct. Feel free to post your own message on this site about whether it’s effective or not!

Governance Review

Daniela Costa — Thu, 23 Oct 2008 10:11:13 +0000

My name is Daniela Costa and I work for ActionAid International, an international anti-poverty agency whose aim is to fight poverty worldwide. Formed in 1972, for over 30 years we have been growing and expanding to where we are today - helping over 13 million of the world's poorest and most disadvantaged people in 42 countries worldwide.

We believe that poverty and injustice must be tackled at local, national and international levels. We can do this more effectively if we have a truly international ActionAid which is collectively owned and governed by the various national ActionAids.

My work mainly focuses on institutional governance and my Unit supports the development of our international and national governance structures.

Whithin AAI we require every Board to undergo a governance review annually and I have been involved in few of them. We have written an article on it and I would like to share with you why we believe a Board should asses itself, what this assessment should entail and tips that we usually share with our Boards. There we go….

One of the main roles of the Board besides governing the organisation is to ensure self-governance. An effective Board ensures good governance practices, which is essential for effective organisational performance.

Regular Board evaluation provides a unique opportunity for the Board to see if it is adding value to the effectiveness of the organisation and it is also an important tool for continuous learning in the organisation.

An effective evaluation must:

· assess the performance of the Board in relation to its duties, responsibilities and clearly stated objectives;

· encourage accountability, identify required organisational changes and potential new governance initiatives;

· identify areas which require development and support/skills needs for the Board;

· evaluate the current and future leadership needs of the organisation;

· build trust and enable Board members to work more effectively as a team;

· provide a strategic approach for Board evolution;

· recognise and identify opportunities for motivating and retaining Board members

· help the Board to review its annual plan;

· recognise and reinforce success.

Few tips

1. Bear in mind that the most important evaluative question is this: “Is the Board adding value to the effectiveness of the organisation?”

2. The objective of an evaluation should be clearly defined, and all aspects of the evaluation should be linked to the stated objectives.

3. The Board should take time to identify what it would consider as ‘good performance’ while setting objectives to build a framework for the evaluation

4. The Chair, Vice Chair and members of the Governance Committee have a fundamental role to play in the Board evaluation.

5. The Terms of Reference for external consultants must be very clear about the objectives, time frame for execution and the methodology.

6. Evaluation must lead to tangible improvements and an action plan based on recommendations.

7. The evaluation is not an end-in-itself. The follow up requires significant time and commitment.

8. Evaluating your own Board may seem to be easy. However, it may also raise complex issues.

Do you have anything to add to it? I would like the community to treat this document as a working in progress. If you have experience with Board assessment, please share your thoughts with us.

Ate mais,

Daniela

Source: ABC newsletter , ActionAid International

The Effectiveness of Codes of Conduct

Marilyn Wyatt — Sun, 12 Oct 2008 11:05:37 +0000

Many thanks to all of you again who shared ideas about introducing codes of conduct to boards. I worked with a board last weekend that wanted to adopt such a code. We spent nearly three hours discussing what its content might be and the best ways to enforce it. I shared several of the samples you sent as well as other that I found on the Global Forum on NGO Governance.

In the end the group opted for a combination of elements from several of the shorter codes. They also signed a “memorandum of understanding” with each other that outlined some expectations for respectful behavior, confidentiality, chair authority, and so forth. Let’s hope it works for this board! They’ve had some problems with disruptive behavior.

The question of whether boards should write their own codes or sign on to ones promoted throughout a larger community is an interesting one. In my view it goes to the heart of the issue of self-regulation. Most of you voiced a preference for codes that boards write themselves. But I’m not convinced that community-wide codes aren’t more effective in promoting ethical standards and best practices. Aren’t stakeholders better served and better able to exert influence by having a common measuring stick rather than one that’s customized for each organization?

I’m not sure what the answer is. But I do know that in recent years in the U.S. we saw a proliferation of codes of conduct, on the principle that no one size fits all. One need only look at the website of Independent Sector to get a feel for how many are out there. But then with the big scandals among foundations and other nonprofits a few years back, which were followed by the threat of Congressional action, a common set of expectations suddenly seemed a lot more palatable—and a safe bet at warding off new regulation. The Panel on the Nonprofit Sector convened by IS issued its Principles for Good Governance and Ethical Practice, and similar efforts followed, such as the Council of Foundation and European Foundation Center’s Principles of Accountability.

These are great documents but I don’t know how big an impact they’ve had in terms of actually promoting more ethical behavior. Do any of you have good examples of community-wide (i.e., sectoral or sub-sectoral) codes that have actually worked?