Instruments for Improving Accountability and Governance in NGOs Dr Marilyn Wyatt [email_address]

Key assumptions Good governance is as important for NGOs as for the public and private sectors Boards have primary responsibility for organizational accountability Boards themselves must act in accountable ways Governance ≠ management The same people do not serve in both functions Conflict of interest and a lack of coherent approaches to governing are the main factors undermining board accountability

Good governance is as important for NGOs as for the public and private sectors

Boards have primary responsibility for organizational accountability

Boards themselves must act in accountable ways

Governance ≠ management

The same people do not serve in both functions

Conflict of interest and a lack of coherent approaches to governing are the main factors undermining board accountability

What will we cover? Basic definitions Key areas for improving board accountability

Basic definitions

Key areas for improving board accountability

Basic definitions

Basic definitions

What is accountability? “ An obligation or willingness to accept responsibility or to account for one’s actions” Merriam Webster Dictionary External accountability: Adherence to applicable regulations Open dialogue with stakeholders Information and transparency Internal accountability: Clear flow of authority Checks and balances, especially in finances Regularity in procedures Avoidance of conflict of interest

“ An obligation or willingness to accept responsibility or to account for one’s actions” Merriam Webster Dictionary

External accountability:

Adherence to applicable regulations

Open dialogue with stakeholders

Information and transparency

Internal accountability:

Clear flow of authority

Checks and balances, especially in finances

Regularity in procedures

Avoidance of conflict of interest

What is governance? “ To prevail or have decisive influence or control; to exercise authority” Merriam Webster Vested in a clearly identified governing body, which is: Distinct from and independent of management Engaged mainly in policy-making, monitoring and supervision, and long-term institutional development Steward of the mission and resources Usually has legal responsibility for the organization Supervisor of one employee: the chief executive

“ To prevail or have decisive influence or control; to exercise authority” Merriam Webster

Vested in a clearly identified governing body, which is:

Distinct from and independent of management

Engaged mainly in policy-making, monitoring and supervision, and long-term institutional development

Steward of the mission and resources

Usually has legal responsibility for the organization

Supervisor of one employee: the chief executive

Basic structure #1 Governing Body Faculty and Staff Chair Governance Management Executive Director

Variation #1 Governing Body Faculty and Staff Chair Ex Dir Governance Management

Variation #2 Governing Body Faculty and Staff Chair Governance Management General Assembly Executive Director

Variation #3 Governing Body Faculty and Staff Chair Governance Management Supervisory Board Executive Director

Variation #4 Governing Body Faculty and Staff Chair Governance Management Founders Executive Director

Variation #5 Governing Body Faculty and Staff Chair Governance Management Mother Organization Executive Director

Variation #6 Governing Body Faculty and Staff Chair Governance Management Advisory Council Executive Director

Variation #7 Governing Body Faculty and Staff Chair Governance Management Govt. regulators Executive Director

Basic structure Governing Body Faculty and Staff Chair Executive Director Governance Management

2. Key areas for improving board accountability

a. Statutes, bylaws, and policies Ensure adherence to regulatory environment Offer coherent, consistent framework for action -- avoidance of “ad hoc-ism” What’s the difference? Statutes give legal statues; describe organization’s purpose and structure Bylaws elaborate the function and operations of board and its relationship with the executive director Policies describe organizational goals and acceptable procedures for achieving them

Ensure adherence to regulatory environment

Offer coherent, consistent framework for action -- avoidance of “ad hoc-ism”

What’s the difference?

Statutes give legal statues; describe organization’s purpose and structure

Bylaws elaborate the function and operations of board and its relationship with the executive director

Policies describe organizational goals and acceptable procedures for achieving them

The importance of bylaws Document the flow of authority Codify board duties and procedures Define the board’s relationship with ED Offer guidance for resolving uncertain situations Promote collective leadership and continuity Help build a strong institution

Document the flow of authority

Codify board duties and procedures

Define the board’s relationship with ED

Offer guidance for resolving uncertain situations

Promote collective leadership and continuity

Help build a strong institution

Core content of bylaws Mission Names and duties of governing bodies Their relationships to each other and ED Duties of individual board members Minimum number of board members; method of selection and terms Conflict of interest policy Meetings: frequency, convening, quorums Decision-making procedures Committees Mergers, dissolutions

Mission

Names and duties of governing bodies

Their relationships to each other and ED

Duties of individual board members

Minimum number of board members; method of selection and terms

Conflict of interest policy

Meetings: frequency, convening, quorums

Decision-making procedures

Committees

Mergers, dissolutions

b. Avoiding conflict of interest Conflict of interest = Any situation in which competing personal interests are put above--or have the appearance of being put above--the interests of the organization Prevalent when: NGO sector is ingrown Public- and corporate-sector standards are lax Public mistrust of NGOs is high Sector-wide ethical standards Organizational values and ethical standards Duty of loyalty of individual board members

Conflict of interest = Any situation in which competing personal interests are put above--or have the appearance of being put above--the interests of the organization

Prevalent when:

NGO sector is ingrown

Public- and corporate-sector standards are lax

Public mistrust of NGOs is high

Sector-wide ethical standards

Organizational values and ethical standards

Duty of loyalty of individual board members

Elements of a conflict-of-interest policy Offers impartial guidance for handling ambiguous, uncomfortable or unfair conflict-of-interest situations Should include: Statement of purpose (definition, target audience) Disclosure requirement Appropriate behavior in case of conflict Method of enforcing Must be a living document!

Offers impartial guidance for handling ambiguous, uncomfortable or unfair conflict-of-interest situations

Should include:

Statement of purpose (definition, target audience)

Disclosure requirement

Appropriate behavior in case of conflict

Method of enforcing

Must be a living document!

c. Board and ED evaluations Performance vs. organizational evaluations Most important from the board’s perspective: Mission fulfillment Sustainability Leadership Sources of benchmarks: Job descriptions (in statutes, bylaws and contracts) Agreed annual and long-term goals Accepted standards and benchmarks Look to the future (what will we do next year?) as well as the past (how well did we do?)

Performance vs. organizational evaluations

Most important from the board’s perspective:

Mission fulfillment

Sustainability

Leadership

Sources of benchmarks:

Job descriptions (in statutes, bylaws and contracts)

Agreed annual and long-term goals

Accepted standards and benchmarks

Look to the future (what will we do next year?) as well as the past (how well did we do?)

Approaches to board-level evalutions Surveys, focus groups, and 360s Outside assessment Self-evaluation Should be annual event

Surveys, focus groups, and 360s

Outside assessment

Self-evaluation

Should be annual event

d. Annual board training Refreshes understanding of purpose and functioning of board Creates space for goal setting and planning Allows old members to reflect and new members to integrate Encourages higher-level thinking and dialogue Promotes social bonding

Refreshes understanding of purpose and functioning of board

Creates space for goal setting and planning

Allows old members to reflect and new members to integrate

Encourages higher-level thinking and dialogue

Promotes social bonding

Sample retreat agenda Board roles and responsibilities Board policies and procedures Board’s relationship with executive director Overview of programs and finances Long-term issues and goals Identification of board priorities for coming year Signing of disclosure statement Social event

Board roles and responsibilities

Board policies and procedures

Board’s relationship with executive director

Overview of programs and finances

Long-term issues and goals

Identification of board priorities for coming year

Signing of disclosure statement

Social event

Key board practices for better accountability Codify rules and expectations for behavior in writing Aim for predictability, consistency, flexibility Once the rules are written, enforce them Insist on annual training and evaluation Be serious about conflict of interest

Codify rules and expectations for behavior in writing

Aim for predictability, consistency, flexibility

Once the rules are written, enforce them

Insist on annual training and evaluation

Be serious about conflict of interest