CAP Workshop – Good Governance & Management for NPOS

Often,
‘Good Governance’ is a term that most pay lip service to. Many
feel that it ‘looks good’ to mention it in Annual Reports — “we
believe in good governance best practices”, little knowing what
these “best practices” could be.

Often
NPO Boards have ‘conflict of interest’, but, refuse to disclose
it let alone resolve conflict. Also, most often NPOs think ‘Risk
Management’ is what business enterprises should be concerned about,
little knowing that NPOs encounter far greater risks be it in terms
of human and financial resources or programs and sustainability.

Keeping
all these and other factors in mind CAP organised a workshop on 20th
August 2015 with an internationally accomplished expert in the field,
Mr. Pesh
Framjee.
Pesh is the Partner leading the
International Not For Profit Group at Crowe Horwath International a
role he previously carried out at Deloitte and Arthur Andersen. 

Pesh
set the tone of the session by stating that being a non-profit is
never an excuse for tardy management. 

  Whether the organisation is
for-profit or non-profit it must focus on raising adequate resources
and managing them effectively. Just as business houses are ‘profit
driven’, NPOs are ‘value driven’. However, both need to be
financially healthy. He
emphasised that continuous learning and improvement is something that
all Boards and Management need to consider. The organisations that
are succeeding have recognized this and know that they need to be
nimble and able to change and adapt. 

 

Boards and
management of NGOs and other not for profit organisations need to be
able to constantly respond to a number of questions:

What is good governance and what are
the necessary attributes for boards of the future?

Structures, behaviors and competencies
need to be fit for practice and understanding of what successful
organisations are doing.

In effect ‘good governance’ is
looking even beyond legal and fiscal compliance to ensure
effectiveness. It’s about integrated transparent and accountable
systems and processes that permeate across organizational silos.

We often think in terms of financial or
legal audits and at times on program performance audits. However,
Pesh brought up the interesting issue of ‘Skills Audit’ to which
a participant pointed out that if they tried recruiting after a
skills audit it would take more than a year as the people with the
necessary skills often don’t have the time, passion or shared
vision. Another participant said, “While we formally may not have
that process here in India we do it subconsciously”.

Why we are here and where are we
going to?

This requires clear understanding of
the mandate, mission, vision and values of the organization. It was
emphasized that everyone must have a ‘buy in’ to all these and in
the absence of ownership it would fail. Unless there is a ‘buy in’
by the CEO and staff a ‘Board driven’ agenda could fail and
conversely, without Board ‘buy in’ and support a CEO driven
agenda may not be effective.

  

There were several other thought
provoking issues:

How do we get there? This
requires a coherent strategy and operational plan to deliver against
objectives.

What might prevent us from getting
there? This is the risk management piece. Risk management is not
about being risk averse but about understanding the uncertainties
that can prevent the organization from achieving its goals.

How do we know we are getting there?
This is the performance measurement piece, tying into effective
processes and delivering impact.

How do we remain nimble? This
requires recognition that change is constant and managing change
needs to be understood at all levels. 

 

Participants discussed how to implement
risk management that focuses on both value protection and value
creation, linking strategy to risk. They also discussed aspects of
measuring performance and impact and the importance of useful
research on change management and strategy facing NGOs.

Participants also discussed what leads
to successful change, lessons learned, how to go about it and how to
recognize when change is needed. Most concluded that change efforts
do not deliver up to expectations.  Pesh pointed out the
difference between successful transformational change and simple
tweaking initiatives.  He felt that Boards and senior management
need to ensure that they can lead and shape change efforts big and
small.

ABOUT
THE SPEAKER – 
  Pesh
Framjee is the Partner leading the International Not For Profit Group
at Crowe Horwath International. A role he previously carried out at
Deloitte and Arthur Andersen. Pesh is a Chartered Accountant working
in the UK with Crowe Clark Whitehill which is has been recognized by
independent surveys as the leading provider of audit and related
services to charities. Crowe Horwath International is ranked number 9
among global accounting firms and associations, with over 720 offices
throughout the world, has specialist teams working with Not for
Profit Organisations and those that fund them.
  

Pesh
has been working in UK for over 35 years and writes and lectures
internationally on matters facing NGOs and Civil Society. Pesh works
with NGOs around the world and therefore understands the different
contexts – he is an Indian citizen who is regularly in India and he
has an understanding of the opportunities and challenges facing
Indian NGOs.

He
is an acknowledged expert in the field and a thought leader in areas
of financial management, financial reporting, effective governance,
strategy and risk management and performance measurement.

 Pesh
is past board member of the Institute of Risk Management,
Special Advisor to the Charity Finance Group (A UK umbrella body with
more than 1,350 charities in membership, managing over £21.1
billion). He has been a member for 22 year of the SORP Committee that
produces the accounting and narrative reporting guidelines for UK
charities  and is also a member  of the working group
considering the development of an International Financial Reporting
Standard for Not for Profit Entities.