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Governance in Non-Profit Organisation

Governance in Non-Profit Organisation. Presenter: Siziwe Ngcwabe CABSA CONFERENCE 2010. Take Home!!. What is good governance? Who should serve on your board? Orientation Roles and responsibilities of a board Focus areas Successful board

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Governance in Non-Profit Organisation

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  1. Governance in Non-Profit Organisation Presenter: SiziweNgcwabe CABSA CONFERENCE 2010

  2. Take Home!! What is good governance? Who should serve on your board? Orientation Roles and responsibilities of a board Focus areas Successful board How to ensure a successful board meeting What board focuses on? Why board fails? Assessment

  3. Governance • A process to help directors discharge and be seen to be discharging their responsibilities created by their duties (The Corporate Citizen, King, M) • The manner of directing and controlling the actions and affairs of an entity (The Corporate Citizen, King, M) • Intent is to improve quality, but what exactly is good governance?

  4. What is good Governance? Involves: Fairness Accountability Responsibility Transparency On a foundation of intellectual honesty (The Corporate Citizen, King, M)

  5. Who should serve on the Board? What skills should they have? How many do you need? How long should they serve? Orientation and training of board members

  6. Role of the Board Performance:This is achieved by the board being involved in policy formulation and strategic thinking, both long term activities that are needed to ensure the success and sustainability of the organisation.

  7. Role of the Board • Conformance:This is achieved by the board ensuring • by supervision of management in terms of conformance to key performance targets, budgets and outcomes. • accountability in terms of legislative requirements and member’s (stakeholders) wishes.

  8. Separation of Responsibilities The chairperson should be the “boss” of the board while the CEO should be the “boss” of the staff The CEO is the only employee of the board, the rest of the staff work for the CEO. The CEO is accountable for all aspects of the organization’s activities except for the board and its’ functions.

  9. Role clarity: Chairperson • It is further deemed critical that the chairpersons must understand their job description. The chairperson has a responsibility to: • Determine the format of the agenda and work with the CEO in preparing documentation for board meetings. • Chair the process of the board meeting. • Influence and control the strong personalities amongst board members in order to move business along. • Ensure directors/trustees are trained and competent. • Decide when to fire the CEO.

  10. Role clarity: Chairperson As important as it is for the Chairperson to know what his or her job description is, is also the understanding that their job does notentail running the organisation neither directly or by proxy. An unacceptable situation is where the CEO has to take instructions from the chairperson individuallyinstead of from the board collectively or is expected to report individually to the chairperson.

  11. Members: Roles and responsibilities Individual Obligations Apart from the legal duties that attend board membership, individual responsibilities are also described. These include: • To attend all board and committee meetings and functions. • To be informed about the organisation’s mission, services, policies and programmes (products). • To review the agenda and supporting materials prior the board and committee meetings. • To serve on committees or task forces and offer to take on special assignments. • To suggest possible nominees to the board who can make significant contributions to the work of the board and organisation.

  12. Members: Roles and responsibilities • To keep up-to-date on developments in the organisation’s field. • To follow conflict of interest and confidentiality policies. • To refrain from making special requests of the staff. • To ask insightful questions on issues of governance if these issues are not tabled at meetings. • To allocate sufficient time for their duties. • To be independent and free from external influence. • Maintain confidentiality. • Seek expert advice if needed.

  13. FOCUS AREAS/OUTPUT The Board fulfills its role by having specific focus areas that are programmed into the cycle of board meetings. These are: • formulating policy • strategic thinking • supervision • ensuring accountability • In addition to this, is also the role of the board to appoint and reward the Chief Executive.

  14. FOCUS AREAS 1: Formulating Policy Organisational policyis developed by : • Determining organisational purpose, vision and values. • Developing corporate culture. -Purposeis determined by the board answering questions such as: • What is the reason for the organisation existing? • How will the organisation make a difference in the world? • How does the organisation ensure that it stays relevant?

  15. FOCUS AREAS 1: Formulating Policy cont… Policy formulation does not refer to policies regarding operational aspects of the organisation (e.g. leave policies) it refers to policies that provide strategic direction and set organisational culture.

  16. Focus Areas 2: Strategic thinking • The board focuses on how to meet the organisations’ purpose through undertaking the following tasks: • Position the organisationin an ever-changing environment. • Set organisationaldirection. • Review and allocate resources. • Formulate corporate strategy around organisational and staff development. • The role of the board is not to undertake the actual strategic planning process

  17. Focus Areas 3: Supervision • This includes: • Review executive performance. • Review organizational results. • Monitoring budgetary control. • Monitoring and managing risk. • Requirement that the board is sufficiently knowledgeable about the working of the organisation to be answerable for its actions. • This requires the development of management information systems that it will allow board members to have such insight. Indicators are critical

  18. Focus Areas 4: Accountability • The board is held, usually by law, ultimately accountable for the activities of the organisation. In order to ensure accountability the board must undertake the following tasks: • Report to members/shareholders/stakeholders. • Ensure regulatory compliance in terms of relevant national laws. • Review audit reports.

  19. Focus Areas 5: Appointing and rewarding the CEO The CEO is the only employee of the Board (all other staff work for the CEO) and some board time should be spent on hiring and firing the CEO and determining his/her remuneration.

  20. Successful Boards • Ensuring the quality of the information supplied . • Role clarity between the board and the CEO. • Developing criteria for evaluating outcomes. • Clearly articulating organizational purpose, vision and values. • A focus on the external environment rather that the internal. organizational mechanics. • A focus on the outcomes rather than the process. • Achieving a balance between over- and under-control.

  21. How do you ensure a good board meeting? Plan Participate Record (who/what/when etc)

  22. What Boards often focus on 1. Meddling • This is when the CEO usually co-opts the Chair in decisions…..this involvement in management activities reduces the degree to which the CEO can be held accountable for outcomes. 2. Micro-management 3. Rubberstamping • This is characteristic of when the board takes their governance role lightly.

  23. Why Boards Fail • Lack of experience • Dictatorships • Non-participative members • Inadequate size or diversity • Ineffective time allocation • Inappropriate time orientation • Reactive instead of proactive focus • Reviewing the past

  24. Assessment How well did we do it? What went wrong? What went right? How will we know? What tools did we use? What process did we follow?

  25. Guiding documents (RSA) King Report in South Africa 1994 King II Report 2002 King III Report 2007 (pending) The Corporate Citizen. King, M

  26. Word of encouragement Word of encouragement “Winning is the science of preparation and preparation can be defined in three actions: • Leave nothing undone • No detail is too small • No task is too large Most of the time the difference between winning and losing, success and failure, can be the smallest detail” Reggie Jackson

  27. THANK YOU!!!!!!!!!!!Cell: 0838658708E-Mail: ithubalethu@webmail.co.za

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