Governance in Non Profit Organizations

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Governance in Non Profit Organizations

• Certificate Course in NGO Management
• IMS University of Peshawar

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Working of An Organization
Governance
Management
Operations
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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.

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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 organizations) 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.

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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).

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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.

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Tools for increasing the effectiveness of
Governance

• Committees
• Reports
• Boards and Governance Models

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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

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Reports and Documentation

• Government Laws and Regulations
• Memorandum of Association
• Articles of Association
• By Laws
• Audit report
• CEOs Report
• Board Report
• Annual Report
• Minutes of the Meetings

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Governance Models

• Operational Model The board manages, governs and
  performs the work of the organization.

Role Responsibility
Governance Board
Management Board
Operation Board
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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
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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
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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
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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
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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
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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 CEO
Operation Staff
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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
Role Responsibility
Governance Board
Management CEO
Operation Staff
Board
CEO Staff
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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
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Which Model is Best for your Organization

• 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.

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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 organizations Governance
  Model and Identify its flaws and with which
  model you will replace the existing model and why?