Governance in Non Profit Organizations

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Governance in Non Profit
Organizations
Certificate Course in NGO
Management
IMS – University of Peshawar
Working of An Organization
Governance
Management
Operations
What is Governance
 The English word “governance” comes from the
Latin word meaning “to steer, guide, or direct.”
 The term generally refers to the way in which
power is assumed, conveyed, and exercised
within a society or an organization.
 It consists of either a separate process or part of
management or leadership processes.
How to Define Governance
 The World Bank defines governance as
 the exercise of political authority and the use of institutional resources to
manage society's (or an organization’s) problems and affairs.
 The Worldwide Governance Indicators project of the World Bank
defines governance as
 The traditions and institutions by which authority in a country (or an
organization) is exercised.
 An alternate definition sees governance as
 the use of institutions, structures of authority and even collaboration to
allocate resources and coordinate or control activity in society the
economy or an organization.
Peace Corps Defines Governance within an NGO as:
 System of oversight, exercise of authority or control within an NGO.
 Governance is the way in which an organization distributes power,
rights and accountability.
Types of Governance
 Global Governance: “Global governance or world governance is the political
interaction of transnational actors aimed at solving problems that affect more than
one state or region when there is no power of enforcing compliance.”
 Participatory Governance: “Participatory Governance focuses on deepening
democratic engagement through the participation of citizens in the processes of
governance with the state.”
 IT Governance: “IT Governance primarily deals with connections between business
focus and IT management. The goal of clear governance is to assure the investment
in IT generate business value and mitigate the risks that are associated with IT
projects.”
 Non Profit Governance: “Non-profit governance focuses primarily on the fiduciary
responsibility that a board of trustees has with respect to the exercise of authority
over the explicit public trust that is understood to exist between the mission of an
organization and those whom the organization serves.”
 Islamic Governance: “Islamic Governance is submission to the will of Allah in both
private and public life. Submission to the will of Allah is attained by governing
according to the Quran and the Sunnah (the actions and sayings of the prophet
Muhammed).”
Good Governance
 The Working Group on NGO Governance in Central and Eastern
Europe defines good governance as “a transparent decision-making
process in which the leadership of a nonprofit organization, in an effective
and accountable way, directs resources and exercises power on the basis
of shared values.”
Tools for increasing the effectiveness of
Governance
Committees
Reports
Boards and Governance Models
Committees
Standing Committees
Executive Committee
Nominating Committee
Finance Committee
Ongoing Committee
Marketing Committee
Program Committee
Community Relations Committee
Ad Hoc Committee/ Task Force
Advisory Committee
Reports and Documentation
 Government Laws and Regulations
 Memorandum of Association
 Articles of Association
 By Laws
 Audit report
 CEO’s Report
 Board Report
 Annual Report
 Minutes of the Meetings
Governance Models
Operational Model: The board manages, governs
and performs the work of the organization.
Role
Responsibility
Governance
Board
Management Board
Operation
Board
Governance Models
Collective Model: The board and staff operate as
a single team when making decisions about
governance and the work of the organization.
Board members may work with either or both
service operations or management functions.
Role
Responsibility
Governance Board + Staff
Management Board + Staff
Operation
Board + Staff
Governance Models
Management Model: The board manages operations
through functional committees that may or may not
have a staff coordinator.
Role
Responsibility
Governance Board
Management Committees +/ CEO
Operation
Staff
Governance Models
Constituent Representational Model: An approach used
by publicly elected officials. Federations or other
constituency-elected boards have the primary
responsibility of balancing the interests of their
constituents with the best interests of the organization.
Constituents
Board
Any Model
Governance Models
1.
Traditional Model: The board governs and oversees
operations through committees established along
functional lines (finance, human resources, and
programs) but delegates the management functions to
the executive director.
Role
Responsibility
Governance Board
Management CEO
Operation
Committees +
Staff
Governance Models
Results-based Model: The executive director is a non-voting member of
the board, carries substantial influence over policy making, and is
viewed as a full partner with the board. Committees, organized
around board responsibilities and lead planning, would guide
governance, and monitor and audit performance of the board,
executive director and organization.
Role
Responsibility
Governance
Board + CEO + Committees
Management CEO + Committees
Operation
Staff
Governance Models
Policy Governance (Carver) Model: The board governs through policies that establish
organizational aims (ends), governance approaches, and management limitations.
These policies also should define the relationship of the board with the executive
director. The executive director has broad freedom to determine the means that will
be used to achieve organizational aims.
Role
Responsibility
Governance
Board
Management
Operation
CEO
Staff
Governance Models
Advisory Board Model: A board selected and dominated by the
executive director. This board provides prima facie legitimacy to the
organization but governs only in a nominal sense. Board members
provide advice and may rubber-stamp the executive director's
recommendations.
CEO
Board
CEO + Staff
Role
Responsibility
Governance
Board
Management
CEO
Operation
Staff
Governance Models
Patron Board: Similar to the Advisory Board model, the board of directors in the Patron Model has
even less influence over the organization than an advisory board. Composed of wealthy and
influential individuals with a commitment to the mission of the organization, the Patron Board
serves primarily as a figurehead for fund raising purposes. Such boards meet infrequently as
their real work is done outside board meetings. Writing cheques and getting their friends to
write cheques is their contribution to the organization. Many organizations maintain a Patron
Board in addition to their governing boards. For capital campaigns and to establish credibility
of a newly formed organizations, Patron Boards can be especially helpful. They cannot be
relied upon, however, for governance tasks such as vision development, organizational
planning, or program monitoring.
CEO
Board/ Patron
Board
CEO + Staff
Which Model is Best for your Organization
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Do we have a clear understanding and agreement on the purpose of our organization? Is it written down?
What are the basic values which guide our organization and our board? Are they written down?
How do we know whether the good our organization does is worth what it costs to operate it?
What financial resources do we have and can we reasonably count on for the next few years?
To what extent are board members expected to contribute money and labour to fundraising efforts?
Do we believe that the organization should be run as a cooperative or collective - with staff participating along
with board members in the governing of the organization?
How much time is each board member willing to give to the organization in the next year (or until the end of their
term)
How much trust does the board have in the ability of the CEO to ensure that the organization operates in an
effective and ethical manner?
What are our expectations about attendance at board and committee meetings?
What is the attendance record of each board member?
How do we hold board members accountable?
What is the record of each board member and committee with respect to meetings and results?
How useful has each committee proven to be?
To what extent do committees duplicate staff jobs? How satisfied are our members with the current board
performance?
Who thinks we should change our governance model?
How much time and money are we willing to devote to increasing our own knowledge and skills to improve our
performance as board members?
How does our board deal with differences of opinion?
How do members deal with decisions when we disagree?
To what extent is it necessary for us (board members) to be involved in the delivery of programs and services,
marketing, public speaking, etc.
Who attends our Annual General Meeting? Why do they come?
As board members, to whom do we wish to be accountable?
How effective is our current recruitment method in getting excellent board members?
Fruit for Thought
(and its your Next weeks Assignment too)
Describe two or more activities a Volunteer
might institute with his or her
Counterpart(s) or coworkers to improve
the governance of an NGO.
Study an Non Profit organization’s
Governance Model and Identify its flaws;
and with which model you will replace the
existing model and why?
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