Sunday, 23 August 2015

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.

The workshop culminated with a group exercise where real experiences where shared with examples on collaborative efforts and how risks were assessed and mitigated or circumstances under where risks far outweighed the potential benefits. 

  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.

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