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Afternoon keynote - Margaret Casely-Hayford, Chair, Action Aid

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Presented on Monday 2 November at NCVO/BWB Trustee Conference 2015.

Afternoon keynote - Margaret Casely-Hayford, Chair, Action Aid

If you would like to find out more about our 2016 Trustee Conference email us at ncvoevents@ncvo.org.uk or call us on 020 750 3153.

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Afternoon keynote - Margaret Casely-Hayford, Chair, Action Aid

  1. 1. NCVOConference – Speech 1. Introduction  Thank youto the NCVOfor invitingme tospeakatthis conference. Itsaysmuch formodern societythatgovernance canbe the central focusfor suchan event!  My talkwill take the followingbroadshape: An overview An unpackingof thatoverviewbyreference tothe governance structure and governance activitywithinActionAid Andthree proposalsonwhichI wouldwelcomequestionsandcommentsindue course Evenas a personwho’sbeeninvolvedingovernance inone wayoranotherall my life,whetherasa lawyerinthe City,or as Directorof Legal andCo Sec at JohnLewisor as Chairof ActionAid,the last fewmonthshave beenasurprise forme.I’ve heardthe word‘governance’usedsoofteninthe mediaalmostona dailybasis,andparticularlycharitygovernance,thatinfashiontermsone might say governance isthe newblack! My backgroundisthat of a lawyerspecializinginplanninganddevelopment,workedinthe City for 20 yearsbothopposite andwithcentral andlocal government inprocurementandinmany regulatedareas;andthenas Co Secand GC forJLP for almost10 years. I am delightednow to be Chair of the AAUK board. As youcan imagine –withthat background,almostthe firstthing that I embarkedupononarrival at AAUKwas to initiate agovernance review.NotbecauseI suspectedanythingof beingwrong! Butbecause Ineededtoassure myself of quite how right thingswere! We as a board of trusteesare,withmanagementof AA are notonly entrustedwithdonor’s money;butalsothe outcome of the terrificinputfrom volunteers’andthe staff’s time and energy – but there is alsoa huge value tothe reputationandethicof the enterprisethathas beenbuiltupoverthe years.Andthis isas importanta part of the organizationasthe people and as the financial assets. Thatbecomespartof the Brand. That we as a boardare requiredto protect. That’s whatgood governance isabout. Protectionof the assets,includingthe reputational asset. We onlyhave toconsiderVolkswagon orthe Co-optorecognise the importance of protectingthat. What I bringwithme is a keennessforeffective lighttouchgovernance; afervourfora system that isopenand transparentanda passionfora systemthat is easyenoughforpeople tosee and understandata glance. A systemthatmakesit clearwhohas whatresponsibilitiesand accountabilitysothat the relationships are obvious.Itshouldbe easytosee whodelegatedthe responsibility;whogave the dutyandto whomthere istherefore adutyowed. Itshouldbe clearwho receivesandhasoversightoverreports aboutthe wayinwhich functionsare being carriedout. What doesthat mean?Itmeansthat we needto have arrangedour enterprise so that itsverydifferentfromFIFA!  AccountabilityforAAUKhasmultipledimensions –because like anyothercharity,ActionAidis responsible tothe beneficiaries, sohasto ensure continuityof fundingsothatcommitted programmesdonot endsuddenly and can be properlyplanned;andhastobe accountable to donorswhethertheyare governments,foundationsorindividuals and inadditionbecause of our decentralizationAAUKlikethe otherassociatesandaffiliates withinthe Federation, is
  2. 2. accountable tothe International Secretariat. Asa memberof the federation hasadutyto complywiththe rulesof the widerorganization,andtocarry out whateverfunctionsithasbeen askedto carry out to itas part of the delegations andthismakesaccountabilityvery differentin the AA context,because of the Federation. More aboutthat later.   Role of the board in accountability An Organizationhasoftenbeendescribedasa body. The managementandstaff are the heart and the hands and the boardis the head. The boardoperatestoreflectthe viewsof stakeholdersandtoquestionthe heartwhichwill have discretionastohow the resourcesare applied. Youwill onlyhave toconsiderwithKidsCompanywhatcanhappenwhenthe head doesn’tquestionthe heartsufficientlyrigorously. Whywere there noreserves? How longhad such a systempertained?Asaboardof trusteeswe have tolookbothto protectingand promotingthe interestsof the beneficiariesandensuringthe donorsbe they institutional or individualreceive sufficientassurance aboutthe wayinwhichthe resourcesare beingapplied and where the prioritieslie fromprogrammesandthose whobenefitthroughthe campaigning and advocacy. The role of the charitable sectorin the civil space gradually disappears and is increasinglyrestricted by governmentaction. Toldtosticktoour knitting! LobbyingActhastriedto curtail our advocacy and political work.Butthe Quakershistoricallyfamouslybuiltandlobbiedforaffordable housing; and lobbiedforanendto the slave trade.Sothere isclearlyroomfor the rightsort of advocacyto underpincharitable operations. Ischeckingthat we operate appropriately withinthe political sphere also part ofour good governance mandate? Surelyit must be! The CharitySector has beenluckyinnotbeingexternallyinvestigateduptonow. Shouldwe now be on the frontfoot,rather thanbeingpurelyreactive. Andif so, how do we persuade the publicthat governance is a priorityforand howdo we decide whatresource implications thisshouldcarry? In myviewthe distinctionbetween the wayinwhichthe public,charitableand private sectors considerandreact to governance requirements isarbitrary! There are appallingconsequencesfor failure todeal appropriatelywiththisineachsector. Let’s unpack that a bit! Last Thursdaymorningon the Radio4 Todayprogramme there wasa segmentonKids’Company – some of you mighthave heardit.Tim Loughton,whohadbeenMinisterforChildrenwithoversight of the relationshipbetweenthe DepartmentforEducationandKids’Companyuntil 2012, said(andI quote): WheneveryouaskKids’ Company: “Let’shave the data, let’shave the performance indicators” You’re told: “We’re not goingtowaste time on all that bureaucracyandif youforce us then there’ll be some notveryfavourablemediastoriessuggesting thatyouwantto waste moneyonbureaucracyrather thanspendingitonthe kids. NowI don’twant to getintothe rightsand wrongsof whosaidwhat,because there’salready enoughflyingaroundaboutthe demise of Kids’Company.Butonits’ownI foundthisvery interesting,because itsuggeststhat‘bureaucracy’ –that is,monitoringandevaluation,governance
  3. 3. and the like – isconsideredinthe mindof the mediaandthe publictobe a waste of money.More worryingly,itsuggeststhatsome charityleadersfeel thisway.  Governance hasbecome a “dirtyword”and there needstobe realignmentinthe mindof the publicand mediaaboutit. 2.1 Pressure on the Charity sector  It’sbeenan awfulyearfor the charitysector.A recentCAFsurveyfoundthatthe public’strustin the sector hasdeclinedto57%, downfrom71% inthe CharityCommission’ssurveyayear earlier.Thisisa shockingchange.  Perhapswe shouldnotbe so surprisedthattrustin charitieshasdeclined - somanymajor institutionsare losingpublic'strustcomparedwith20 yearsgo. o Police - followingPlebgate anddetailswhichhave emergedfromStephenLawrence enquiry. o Politicians –the expensesscandal andmore recentlycasessuchasLord Sewell. o Banksand businesses - aftertheirappallinglackof goodgovernance andlackof transparencyledto2008 crash, the Co-op'scrashingfailure due tolackof goodgovernance and lackof effectiveNEDscrutinyof the Board. o International organisationssuchas FIFA. [elaborationonFIFA ‘slackof transparency] (Importanceof joining thedotsbetween understanding you Mission,assessing theRisks attached to its implementation,creating thestructureto deliver and to overseethat delivery; and importantly creating transparency around thejoining of thosedots - asone speakerreferred to earlier)  It seemsit’snowthe charitysector’sturnto come underthe scrutinyof the publicandmedia. The Olive Cooktragedy, fundraisingmethods,CEOsalariesandgovernance have all beeninthe firingline.  While the popularmediacoverage hasbeenanythingbutbalanced,there isnoquestionthat there have beensome shabbypracticesgoingon,andif we wantto retainthe public’strustthen we shouldbe beyondreproach.  The common denominatorinthese casesislackof appropriate scrutinybythe Board,and a lack of transparency. 2.2 What is governance for?  What isgovernance for?To give the publictrustand confidence thatthe charityisdoingthe rightthing  Trusteesspeakforthe beneficiariesof the charity  Accountable notjustto beneficiariesbutalsotosupporters.Charitiesdon’talwaysdoenoughto listentoour supportersandtell themhow we spendtheirmoney(eg.AAUKAccountabilitywork here inthe UK). 2.3 What is the board for?  Make decisionsaboutrisk  Holdthe staff toaccount
  4. 4.  Blue-skythinking–ActionAidcurrentstrategyperiodwillcome toan endsoonand plansare well underwaytomake sure the Boardhas sufficienttime andspace tothink aboutthis,and to leadthe organisationforwardittermsof whatwe prioritise overthe nextfew years. 2.4 The questionis: howcan we asa sector move to prioritiseimproving governancepractice in charities? Some suggestions! 3.1.1 Needfor regular changes incharities  The Cass review Delivering EffectiveGovernance:Insightsfromtheboardsof largercharities foundthat a fifthof themhave nomaximumtermsof office fortheirtrustees.How isthe Board meantto bringinfreshideasandmove withthe timesif thisisthe case? AlanYentobhascome infor a lot of criticismforbeingChairof Kids’Companyfor20 years.  Thisis reallyworrying,giventhatrotationandrenewal isone of the mostbasicpreceptsof good governance.Itratherputspaid to the ideathatbig charitieswiththe resource toinvestin governance alwaysgetitright. 3.1.2 Investmentin Governance  As I saidat the start, it usedtobe consideredthatgovernance isboring.  Who can affordto take that viewnow?If the DailyMail thinkscharitygovernance is sexy enough to reporton thenthe ideathat it’sboringislongpast,and now it’swhat mightgetyou inreal trouble.  The big issue is whetherwe can put more time and resource into governance while showing proudly how little we spendon governance.  We’re all guiltyof it– almostall charitiesproduce neatlittle tablesdesignedtoshow how little we spendongovernance.  I’mnot suggestingthatwe should all ditchthattype of performance reporting because Ithink the publicdoesfindituseful, - infactit underlinesthe sortof transparencythatperhapsFIFA coldhave done with – givingline of sighttoexpenditure onthe bureaucracy butwe all playour part inencouragingthe myththat expenditure ongovernanceisabad thing.  By all means keepcosts as low as possible,butbe clear that for the publicto have trust and confidence incharities,you needstrong, professional governance,andthis does cost money.  The short answeristhat we shouldall be spendingmore ongovernance, andinparticular in making sure there’ssomeone whoknows about this at the charity. o For largercharities,there shouldbe someone onthe staff.EarlierthisyearActionAid decidedtocreate a newrole fora technical governance specialisttomake sure thatwe’re doingthe rightthing. o Smallercharitiesthismightensure theyhave Trustee withexperienceingovernance – perhapsa lawyerbutnot necessarily –whohas particulardelegatedresponsibilityfor governance withinthe organisation.Getthema copyof the NCVOGuide toGood Governance – it’sonly£5.00!  It’stime for donorsto growup and to recognise thatpartof the Trustees’dutyisto have a good governance function,and thishasa cost.  It's a matter of lawthat corporateshave to have a good governance functionasaresponse to the Auditcommittee oversight. Manycharitieshave a turnovernotunlike majorcorporates,and evenwhere theydon'ttheyshouldbe expectedtotake similarcare because theirstakeholders are bydefinitionthe vulnerable. It'sbizarre thatlegislationexpectsmore whenone islooking
  5. 5. afterthe moneyof shareholdersthanof those donatinginthe interestsof the mostvulnerable insociety!  Kids’Companyistestamenttothis.The cost of not havingthisfunctionoperatingeffectively withinacharity istoo muchfor the beneficiariestobear. Andof course inthe longrunit isthey that have to bearthe costwhenprogrammeshave tocome to an abruptand dramaticend. 3.1.3 Governance Reviews  In fairness, ActionAidhasalwaysbeenproactive aboutgovernance,andcarriesoutregular reviews sothere wasn’tanyresistance tothe requestImade onarrival!So,our last review was carriedout inFebruary2015 and the Board agreedhow we wouldtake itforwardat its March meeting.Justafewmonthslaterthe KidsCompanystorybroke.  There are plentyof people outthere whocancome inand lookat your governance and tell you where the problemsare:we hadtwopeople fromCassCentre forCharityEffectivenesswho produceda thoroughanduseful report,andthe cost wasreasonable.  Thankfullytheydidn’tfindanygovernance gremlinsinourcloset,buttheyidentifieda number of areaswhere improvementscouldbe made. What didthe reviewconsist of?  As part of the review Cassbenchmarkedus againsttheir2012 report Delivering Charity Effectiveness:Insightsfromtheboardsof largercharities.It was effectivelyagap analysis– where doour practicesdifferfromthose of othercharities?  But as has beensaidcomparisonscanbe odious: governance needstobe bespoke to the individualcharityanda largercharityis rightlyexpectedtodomore than a smallercharity.  Howeveritwasa relativelystraight-forwardwaytodiscoverwhetheranythingwe’re doingis patently wrong,andI thinksmallercharitieswhichcan’tjustifyhiringconsultantscoulddoalot of thisthemselves.  Whenyoucarry out a reviewyouneedtobe clearfromthe start about how you’ll take it forward.If you have a governance committeealreadyinplace,aswe did,thismakesiteasier, but otherwise considercreatingatemporarypanel of Trustees,andmake sure theyhave designatedstaff support. How has thisimprovedtrust and confidence at ActionAid?  Part of the problemof a governance review isthatitcan feel like it’snotmakingmuch difference tosupportersandbeneficiaries.There certainlyaren’tchildreninMozambique thinkinghowgreatitis thatActionAid’scommittee structure isfitforpurpose!  Good governance shouldmake the charitymore flexiblebetterpreparedforthe slingsand arrows of the difficulttimeswe’re all experiencing. If peopleunderstandtheirresponsibilitythey can exercise theirdiscretionmore readily  Good governance isalsoanaid to transparency,makingiteasierforyoursupporterstoknow whatyou are doingwiththeirmoney.  More to the point,itwill meanthatyour charityisnot the Tabloids’nextvictim, withall the diversionof energythatittakestotry to deal withanddefendyourselffromsuchaccusations; and youcan carry on doingwhatyoudo best;servingyourbeneficiaries.  [If youhave not yetdone so I wouldencourage everyone tocarryout a review,evenif youare froma small charity.Atworstit will give Trusteesandstaff comfortthattheyare doingthe right thingand won’tbe the nextheadline,andatbestit mightuncoversomethingreallynastythat youweren’taware andcan fix before it’stoolate.]
  6. 6. Role of governance inthe Federation:  The focus ongovernance at ActionAiddoesn’tjustrelate towhatwe’re doinghere inthe UK. Our belief inthe strengthof local governancesystemshasledustocreate these aroundthe world.  ActionAidwasinitiallysetusasa UK charityin the 1970s, andsince thenwe have grownto operate in45 countriesaroundthe world.In2003 we decidedtostoprunningprogrammesfrom the UK andto create a federal structure,ineffectaunioncomprisedof self-governingaffiliates, one ineach country.  The Federationis overseenbyActionAidInternational,based in Johannesburg,andwe are the onlyinternationaldevelopmentcharitytobe headquarteredinadevelopingcountry.  DifferentActionAidcountriesare at differentstagesoftheir development,withsome still directlymanagedbyActionAidInternational.Howeverthe aimisthateverycountryprogresses up the ladderfromcountryprogramme directlymanagedbyActionAidInternationaltoAssociate and finallyAffiliate.  Affiliates have a legal structure and governance similar to that of the UK, witha Board of independentnon-executivedirectorsoverseeingthe workof national staff and steeringthe strategicdirectionof the charity. [There are 19 Affiliates,of whichtenare developingcountries includingGuatemala,NigeriaandMalawi.]  In thiswaythe UK isjustone outof 45, anddecisionsaboutwhere aidmoneyisspentare made by the communitiesthatbenefit.  Thismodel does meanthere needsto be additional scrutiny of what the other Federation membersare doing, since they’re effectivelyourpartners,andthisneedstobe even-handed and notpatronising.Howeverknowingthat there is a board in country doing justwhat we do here in the UK offersa great deal of assurance.  The ActionAid International staff provide an additional level assurance,actingas the machinery for effective oversightof the compliance mechanismforthe organisationasa whole.  Efficiencyinone stoppolicysettingandoversight of implementation  The UK Board doesplay a role in the governance of other Federationmembers bytakingpart inthe reviewprocess whichseescountriesdeveloptheirowngovernance structures.  To progressup eachstepin the ladder,towardsindependence, eachcountrymustundergopeer review.A panel of expertscoveringareasincludingfinance andgovernance isconvenedandwill spendat leasta weekin-countrylookingathow thingsare beingdone.Atthe endof thisthey will produce areportidentifying strengthsandweaknessesandsettingoutwhat(if anything) shouldbe done toimprove. Thuswe protectthe brand.  It wouldbe good for the sector if charitiesin the UK could do somethingsimilarfor each other: a peer reviewtoprotect the industry. 4. Conclusion Boards needto stand up and be countedabout governance.  Questionmanagement  Carry out reviews  Don’tbe worriedaboutquestioning oldpractices  Don’tworry aboutshiftingthe oldguard. It’sno personal reflectiononthem.Lawsand expectationschange.  Recognise brandandreputationasan asset
  7. 7.  Educate your donorsaboutthe benefitsof spendingtime andmoneyprotectingall the assets I want to be a governance evangelistto you all, as important as the brand ActionAidisto the Federation,soshould the term Charity be to the Industry: somethingvaluable;and asset to be protected! Let’s operate as a charitable Federationhere inthe UK – sharing best practice and reviewingeach other. Three proposals: 1. Our governance people shouldbe meetinginformallyeverysooftentodiscusssector developments,share bestpractice,andhelpeachother – we couldhostthe firstmeetingat ActionAid. The ActionAidGovernance Coordinator wouldlove tohearfromyourgovernance person.In manycharitiesthatwill be the PA to the CEO, , so whetherthey’re atechnical specialistornot we want to hearfromthem. 2. Shouldwe be clubbingtogetherto review each other,asActionAidFederationmembersdo? Surrenderingastaff member’stime foraweekisnot feasible,butwhatif itwas a day,possible a day anda half allowingfortime toreadrelevantdocumentsinadvance?Thatwouldbe feasible for mostof us.I alsothinkthat the act of carrying outthe review will givethe reviewerpause for thoughtaboutwhat theyare doing,so I don’tthinkitwouldjustbe the charitythat is reviewed whichbenefits. 3. Learn lessons:There’sa tendencytoscapegoatwhencharitiesgodown,withnoproperreview aimedat learninglessonsfromit.The Commissionmaycarry out an investigationwherethere’s evidence of malfeasance butthisiscloselytiedupwithitsstatutorypowerstoregulate charities. What we,the sector,reallyneedisareview aimedatlearninglessons.Theysayyoushouldlearn fromyour mistakes,butwhatI’dpreferisthat we all learnfromotherpeople’smistakes! When thingsgo wrongthat learningshouldbe captured,perhapsasa case studyor similar.The NCVO mightbe in a goodpositiontodo this,perhapswithasmall subscriptionfromcharitiestopayfor it. Thank youagainfor havingme;I’ll nowtake questionsandcommentsfromthe floor.Idon’tjust wantto answeryour questions –I’dreallylike tohearfromyouwhat youthinkaboutthe three proposalsI’ve made – isthere appetite forusto move forwardwithone ormore of them?

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