Jon Fox of the Home Office Active Community Unit has now produced summary proposals for governance in the voluntary and community sector, and is inviting comments. These are based on the work of The Foundation for Good Governance, featured on this site.
Download the Home Office proposals here or read on below.
Review original proposals here.
You can comments directly to Jon - see below - or by clicking 'Comments' under this item.
Jon writes in an introductory note:
This summary is based on work by The Foundation for Good Governance, commissioned by the Home Office Active Community Unit to develop the Strategy for Governance, and informed by extensive consultation events, discussion and debate
The Foundation engaged a team of consultants to develop the work. The methodology aimed to ‘grow’ a strategy reflecting the interests of a wide range of organisations, testing issues and themes already identified, draw on existing research, experience and expertise, and provide an opportunity for wide discussion. From the outset, the strategy was viewed as a ‘first step’ in a longer process of developing sector ownership for change and development.
This paper highlights key elements of the draft strategy, and the recommendations being fed in to the Capacity Building and Infrastructure Framework, which will be agreed by the VCS and Government in the coming months. The consultants’ papers explore implementation of individual recommendations in more detail.
Ministers will consider priorities for funding from within the ACU’s capacity building and infrastructure budget (around £80m between 2003-6) alongside proposals developed as part of the infrastructure, performance improvement and skills strategies, and in the context of the broader Framework and Government priorities.
Comments on this summary paper can be sent to Jon Fox at the Active Community Unit: jon.fox@homeofice.gsi.gov.uk by Wednesday 18th February.
Note on terminology
The term ‘board’ has been used throughout this paper for consistency; we do recognise that many organisations will not recognise or choose this terminology for their management committee, council of management, trustee group or other structure at the apex of an organisation’s structure. Similarly the term ‘board member’ has been used, rather than trustee, director or committee member.
A Governance Strategy for the Voluntary and Community Sector
Summary of current draft (February 2004)
Note on this Draft:
This summary is based on work by The Foundation for Good Governance, commissioned by the Home Office Active Community Unit to develop the Strategy for Governance, and informed by extensive consultation events, discussion and debate.
The Foundation engaged a team of consultants to develop the work. The methodology aimed to ‘grow’ a strategy reflecting the interests of a wide range of organisations, testing issues and themes already identified, draw on existing research, experience and expertise, and provide an opportunity for wide discussion. From the outset, the strategy was viewed as a ‘first step’ in a longer process of developing sector ownership for change and development.
This paper highlights key elements of the draft strategy, and the recommendations being fed in to the Capacity Building and Infrastructure Framework, which will be agreed by the VCS and Government in the coming months. The consultants’ papers explore implementation of individual recommendations in more detail.
Ministers will consider priorities for funding from within the ACU’s capacity building and infrastructure budget (around £80m between 2003-6) alongside proposals developed as part of the infrastructure, performance improvement and skills strategies, and in the context of the broader Framework and Government priorities.
Comments on this summary paper can be sent to Jon Fox at the Active Community Unit: jon.fox@homeofice.gsi.gov.uk by Wednesday 18th February.
Note on terminology
The term ‘board’ has been used throughout this paper for consistency; we do recognise that many organisations will not recognise or choose this terminology for their management committee, council of management, trustee group or other structure at the apex of an organisation’s structure. Similarly the term ‘board member’ has been used, rather than trustee, director or committee member.
The problem to be addressed
Organisational governance describes ‘the systems and processes concerned with the overall direction, effectiveness, supervision, and accountability of an organisation.’ [1]
Importantly, this understanding of governance reaches across an organisation, beyond a sole focus on the board, and includes relationships with stakeholders and the broader environment. However, the board remains central to the practice governance in voluntary and community organisations on a day-to-day basis. It is also clear that across a diverse sector and that a ‘one size fits all’ approach will not work across the differing needs groups and organisations, and at different stages of organisational life-cycles.
Effective governance is central to current debates in and about the VCS including:
* Maintaining the independence of the VSC, safeguarding the mission and values of organisations,
* Contributing to public trust, funder confidence and a focus on outcomes
* Citizen engagement in civil society
* Diversity, representation and accountability
* The effectiveness of existing support and ‘infrastructure services’
* Appropriate and proportionate regulation
* Maintaining a focus on organisational performance
Many stakeholders have an interest in effective governance, including voluntary and community organisations themselves, infrastructure agencies, regulators, funders, advisers, professional bodies, and the Government. In practice, they may have different understanding and requirements for effective governance, and the differing weight and emphases of these expectations can result in conflicting pressures regarding structures, priorities and process.
There is however, consensus that ‘getting governance right’ and addressing key weaknesses is an essential component of any strategy to build the capacity of voluntary and community organisations, and the role of the VCS.
A framework for action
A successful strategy must help to reconcile the sometimes conflicting pressures on the governance of voluntary and community organisations. It must integrate disparate strands that support the emergence of effective governance in the VCS into a coherent system where different parts can be seen as contributing towards the whole. The starting point of analysis is to understand the ‘governance system’.
Key to this understanding are:
* Different spheres of influence on an organisation’s governance, from internal structures and systems, to the immediate operating environment and wider policy context in which groups operate. Again these spheres can exert different ‘pulls’ on governance.
* The different levels of awareness, understanding and commitment that an organisation of any size or type may travel through in developing its governance. These levels form a ‘governance ladder’ from initial engagement to a high performing organisation.
The challenge is to ensure that action and policy in all spheres acts to support and nurture the development of sound governance.
Strengthening governance in the VCS
The vision
This strategy aims to support an enabling environment which encourages the development of effective organisational governance in the voluntary and community sector, as it fits the values, beliefs and circumstances of individual organisations, and the needs of stakeholders.
Principles
* Respect for independence of voluntary and community organisations and the legitimacy of a range of stakeholders’ interests in the governance of voluntary and community organisations, including appropriate and proportionate regulation.
* High quality support, information and advice should be readily available to support governance, across geographical locations, organisational forms and diverse communities.
* New developments should build on existing work and structures
Seven high level objectives have been identified as central to this vision:
A. A shared understanding of and commitment to effective governance.
Many people and organisations struggle not only with the concept of governance but also its meaning when applied to different contexts and roles. There is a risk is that governance is perceived as a ‘test’, a ‘necessary evil’ or something that is lacking or imposed from outside. These fears are especially strong among small and emerging organisations. These perceptions act as a disincentive to engage with governance, and to the recruitment and retention of current and potential board members. Greater understanding of the systems, processes and language of governance would create a positive ‘climate’ within which organisations can continue to develop their governance.
Key issues are listed below in italic, with number recommended actions following each.
Limited shared understanding of what constitutes ‘good governance;’ or ‘benchmarks’ for funders, policy makers, organisations and board members.
1 Work towards an agreed set of principles of practice for all aspects of governance across diverse voluntary and community organisations.
A range of organisations, and particularly larger and national charities, have invested heavily in the development of their governance systems. This provides a body of knowledge and expertise that is largely ‘untapped’.
2 A secondment and mentoring scheme should be developed to facilitate the sharing of expertise and knowledge between organisations, and across sectors, including secondments between larger and smaller organisations
B. Diverse citizens are willing and able to act as members of boards
Board membership is an act of citizenship; the vast majority of board members in the VCS are unpaid. Yet board membership has a relatively low profile as an opportunity to volunteer and affect change. There is scope to explore more incentives for, and tackle barriers to, volunteering.
Poor profile of board memberships as a form of community involvement
3. There should be greater promotion of board membership as an opportunity to influence and change communities and broader society, and as one of many volunteering opportunities.
Boards need to attract diverse and skilled involvement
4. Improved and clearer incentives for volunteering would broaden the ‘pool’ of prospective board members.
Personal liability acts a particular deterrent to potential board members
5. The VCS should explore the establishment of a brokerage scheme that improve the quality of insurance products available to VCS organisations.
C: Board members and voluntary and community organisations across the country should have access to:
* appropriate training and development opportunities that will equip them for the tasks associated with governance.
* information and advice that can assist and underpin effective decision-making
There are a multitude of initiatives supporting governance across the country, often focused on different forms, sizes and interests of organisations. These do not constitute an effective and reliable level of support and advice available to board members across the country. A series of actions are recommended to address specific concerns identified during research and consultation.
Action and peer learning have proved themselves to be highly effective ways of supporting and developing governance within organisations.
6. These methods should be promoted through intermediary and support organisations to ensure wider availability, supported by learning materials.
Lack of direct channels for communication with board members.
7. Support for the further development of forums, associations and networks dedicated to the needs and interests of board members.
The training and support needs of different organisations at different stages of development are poorly understood
8. Action research project(s) to explore and describe in detail the training and support needs as experienced by a range of organisations
Clarifying and strengthening membership and participation in governance
9. A pilot project should be developed with six membership organisations to re-engage people with organisations and to ensure membership participation is meaningful, and develop training and education programmes for members.
Accreditation offers one method for ensuring that individuals can continue to learn from experience and practice.
10. A system of learning targeted at board members and members should be established. Learning would link theory and practice within a particular field (for example, social enterprise, charitable organisations
There is need to 'join-up' various interests in the field of governance.
11. A community of practice (CoP) should be established as a hub for those individuals and organisations interested in effective governance, building on and linking existing networks; operating through a mix of face-to-face, print, phone and online communications.
A shortage of ‘specialist’ knowledge and expertise particularly in the areas of legal advice, employment practice, finance, health and safety and other legal requirements.
12. An accredited apprenticeship system should be established to train development workers and others who wish to concentrate on a particular area of governance advice.
The lack of access and variable quality of legal advice is a key concern.
13. That investment is made to ensure that board members are able to access affordable and appropriate legal advice as it relates to their duties as board members.
There is limited advice and assistance for boards and organisations in the specialist area of employment practice and employment law.
14. That investment is made to improve access to mediation, arbitration and advice services, particularly for employment matters.
D: Appropriate and proportionate regulation, and action by other intermediaries, that encourages effective governance
The Government’s response to Private Action, Public Benefit sets out its intentions to ensure a legal and regulatory framework which will allow charities and the broader not-for-profit sector to flourish. The Charity Commission and other regulators are working to ensure a strategic and proportionate approach to regulation. There is, however, widespread concern that burdensome regulation can and is having a negative effect on many voluntary and community sector organisations in terms of costs, time and culture. There is scope for further co-operation between regulators and other intermediaries, and to integrate external monitoring requirements with organisations’ own governance processes.
Information requirements from regulators can add considerable burden to charities.
15. Progress towards the synchronisation of overlapping requirements of intermediaries, and development of ‘passporting’ of information between regulators.
External monitoring and assessments by intermediaries such as funders and auditors are often seen as separate to internal information regimes.
16. Assistance for organisations in understanding how the information requirements placed on organisations by intermediaries could inform governance decisions.
The Charity Commission’s process of visits to individual charities has proved useful and popular.
17. The model used by the Charity Commission for individual reviews should be extended to be available at key stages of organisational development.
E: Resources should be focused to underpin and strengthen governance.
Good governance requires investment, in individual skills but also in development of the board as a whole. The need for and the investment in governance and board development is not yet universally accepted across the VCS, nor by funders. Other organisational priorities, including direct delivery, may not encourage strategic investment in governance capacity.
Limited evidence to support the assumption that investment in the development of effective governance in VCS organisations has a positive impact on an organisation’s ability to deliver.
18. A longitudinal study is established that describes the impact of effective governance in the VCS.
Board development requires investment.
19. Funders should be encouraged to recognise and encourage the inclusion of the costs of board development within budgets as part of a commitment to full cost recovery.
20. Bursary schemes and small grants for board and governance development should be available from variety of funders
F: A shared and evolving strategy, with implementation effectively monitored
In the complex system in which governance operates, new policies and unforseen development will require adaption of priorities. The success or otherwise of some recommendations will influence the implementation of others. There are also areas of concern that require more developed thinking. For example, a range of government initiatives have increasingly relied on partnership mechanisms for delivery, and there is increasing attention on merger and collaboration.
A process is required through which the strategy can be promoted, implementation monitored, resourcing considered and the strategy itself can be developed and modified.
21. A secretariat should be recruited and charged with responsibility for implementation and development of governance
Implementation
The recommendations for action above broadly divide into three categories.
* Actions that can move forward as discrete pieces of work
* Recommendations which require more work with stakeholders to develop more specific proposals, achieve more ‘buy-in’ and co-operation, and agree an appropriate and effective delivery mechanism that can harness existing skills, knowledge and capacity within the sector.
* Recommendations that will be most usefully integrated or combined with emerging thinking and proposals relating to other strategies or policy development.
[1] Based on Chris Cornforth (2003) The Governance of Voluntary and Community Organisations: An Overview, Co-operativesUK
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