Recent scandals have placed national and international NGOs (non-governmental organisations) and NGO governance in the uncomfortable glare of press scrutiny. Whether it is over misuse of funds, inappropriate behaviour or high-pressure tactics, trust in NGOs has been undermined.
Public outcry has placed a focus on reforming NGO governance. This has tended to concentrate on topics such as accountability and transparency. But there are more strategic challenges to NGO governance, particularly international NGOs (INGOs) as they become ever more complex organisations attempting to deliver increasingly critical services, operating in multiple locations around the world during highly challenging events.
NGOs are not, however, without solutions. A recent brainstorming event—billed as the first ‘INGO Governance Hackathon’, devised by London-based governance advisory Nestor Advisors—brought together some of the sector’s brightest minds to explore how to address the governance challenges of the future.
The event, which was supported by Board Agenda, uncovered key insights and some potential solutions. The options that emerged provide a starting point for further discussion on how the sector might develop governance thinking to put itself in the best shape to adapt to changing circumstances, but also restore trust.
The idea that trust has been undermined is now well established. When the Charity Commission undertook research last year it found that trust has been steady since 2016, but has fallen since 2014. The commission found a long-term increase in the number of people who report falling trust in charities, from 18% in 2014 to 45% last year. People reported that they suspected charities have fallen short of “good financial stewardship”, failed to “live their values” and of not having a “demonstrable impact”. “For the public,” the report said, “recent news stories have shown charities exemplifying the opposite of the characteristics they want charities to display.”
Governance, however, underpins NGO operations. When Nestor polled participants ahead of the hackathon they found four key issues in need of attention: network governance, balancing global and local presence, effective accountability and board effectiveness. Each issue was brainstormed by a small team of practitioners.
Expansion means many INGOs have operations in distant locations, as a result prompting difficulties for less well-established network members in having their voices heard. The experts concluded this required a “shift away” from a mindset that relies on a hierarchy of network members to recognising all branches as having strengths and a responsibility to support members elsewhere.
Three essential ingredients were identified for building a successful network. Firstly, NGOs should learn how to build a community of network members open to constructive disagreement and discussion. This should be supported by communications across the organisation rather than only coming from the centre.
Secondly, INGOs should work in ways that allow all network members to participate equally in building organisational culture that enables support between locations.
Lastly, to build an effective culture, local standards must be fed into a global processes, alongside minimum standards that can be “domesticated” in ways that allow members to be accountable for their own culture. There should be peer reviews for monitoring compliance with global policies. Stakeholders could be used as “reality checks”.
Global vs local presence
Here the question is how a global organisation can govern efficiency, consistency and relevance in a multitude of locations, and how local operations can remain connected to global governance given diverse cultures and aspirations.
Three options emerged. Organisational values should be set by all members to secure buy-in from local organisations. A global board should ensure values are observed and should set a tone from the top. But there was movement away from using newsletters, online platforms or webinars to support these values. Instead it was proposed that INGOs develop mobile teams—as flexible as a “drone”—to work across an international network. The team—dubbed a DVDD, or dynamic value-driven drone—would investigate when locations hit difficulties, drawing on expertise from other locations or the board. The individual team members might differ depending on the expertise or experience required.
NGOs—whether national or international—must answer to a wide range of external stakeholders, some of whom may even have competing interests. This makes accountability difficult, but NGOs must nevertheless ensure that have solid accountability mechanisms and functioning sanctions if things go wrong.
One proposal for improving accountability was sharing more information and participation of stakeholders in performance assessment, strategic development, learning or even providing representation boards. NGOs could also consider inclusion of alumni—previous programme participants or beneficiaries—in decision-making bodies.
When it comes to accountability between an NGO’s network members, boards should consider clarifying to whom and for what people are accountable; submit to performance assessments against agreed benchmarks; provide a clear escalation process for managing problems; and identify top performers and foster a culture of positive peer pressure for continuous improvement.
But there was also a more radical proposal for accountability: NGOs could consider switching from a donor-focused model to one in which accountability is first and foremost to programme beneficiaries, who would become a “decisive feedback source”. Such a move would address public doubts that charities have failed to have an impact.
The concern identified here is that boards can become weighed down by trying to represent all stakeholders—so-called constituency boards—and in the process sacrifice effectiveness. NGOs should therefore properly define the role of directors and ensure regular assessments take place looking at the board’s role, tasks and practices. Internal discussions should be used to identify gaps in a board’s skills or knowledge.
NGOs should also consider other ways stakeholders can be heard at board level. This could include direct engagement, either face-to-face or virtually. NGOs should also investigate the increasing use of tech, such as board portals, as a means of improving effectiveness.
There are no easy answers to NGO governance. Recent scandals have raised the stakes and undermined trust. Addressing those issues is important. A charity that loses the faith of its donors could soon find itself out of the picture. Those who suffer most are beneficiaries whose lives would otherwise be worse off without the intervention of effective NGOs. At the root of trust, however, is good governance. Put that in place and the good work can continue without distractions.
This article has been prepared in collaboration with Nestor Advisors, supporters of Board Agenda.