Tuesday, 11 February 2014

GOOD GOVERNANCE

INTRODUCTION: 

Mahatma Gandhi had proposed the trusteeship approach for managing the public charitable trusts. A trustee is one who holds property in trust for another or others. The concept of trusteeship implies stewardship without ownership. Such stewardship is not for private profit, but for the greatest good of all. 

The existing laws in India on Public Trusts and Societiesestablished for betterment of life and public good have adopted the concept of Trusteeship. Each Trustee of such an organization, in whatsoever designation, either as .Trustee or as Member of the Board, Executive Committee, Managing Committee or General Body is responsible for the proper management of the properties and programmes of the Trust. The moment one accepts responsibility as a Trustee, one by implication accepts the responsibility of properly managing the activities of the concerned body without any scope of causing “Loss to the Trust”.

Thus every Trustee or the Manager by implication is duty bound to ensure proper functioning of the Trust/Society within the legal framework applicable to such Trust/Society. Trustees are expected to ensure adequate, appropriate and prudent use of all financial, material, intangible and human resources and apply them solely for achieving the objectives of the Trust/Society. The Trustees are thus duty bound to ensure effective and efficient functioning of the organization. To achieve these obligations, it is important to maintain and enhance organizational credibility by evolving and observing various accounting procedures, disclosure standards and monitoring mechanisms. And this in turn, can be achieved by adopting and promoting good governance of the organization.

GOVERNANCE:

In the case of a non-profit organization, governance relates to consistent management, cohesive policies, guidance, processes and right decision for a given area of responsibility.

Governance refers to how an organization controls its actions. Governance describes the mechanisms an organization uses to ensure that its constituents follow its established processes and policies. It is the primary means of maintaining oversight and accountability of the organization. Proper governance strategy implements systems to monitor and record what is going on, takes steps to ensure compliance with agreed policies, and provides for corrective action in cases where the rules have been ignored or misconstrued.

GOOD GOVERNANCE:

Good Governance has eight major characteristics. It is (i) Participatory, (ii) Consensus oriented, (iii) Accountable, (iv) Transparent, (v) Responsive, (vi) Equitable & Inclusive, (vii) Effective & Efficient, and (viii) Follows the rule of law.

• Participatory: Participation by members of the General Body and Managing Committee is a key corner stone of good governance. It could be either direct or through representatives and needs to be informed and organized. This means active involvement and participation of all the members in the management of the organization. We need to do away with the concept of “show-pieces”, “glory seekers” and those who only turn up to sign the attendance register during formal meetings.

• Consensus oriented: There are several actors and many view points each in and every organization. Good governance requires mediation of the different interests in society to reach a broad consensus in society on what is in the best interest of the whole community and how this can be achieved. It also requires a broad and long-term perspective on what is needed for sustainable management of activities and programs and how to achieve the goals of such development.

• Accountable: Accountability is a key requirement of good governance. The NGOs must be accountable to the public and to their institutional stakeholders. Who is accountable to whom varies, depending on whether decisions or actions taken in an organization or institution are internal or external. An organization or an institution is generally accountable to those who will be affected by its decisions or actions. Accountability cannot be enforced without transparency and the rule of law.

• Transparent: Transparency means that decisions are taken and enforced in a manner that follows rules and regulations. It also means that information is freely available and directly accessible to those who will be affected by such decisions and their enforcement. It also means that enough information is provided and that it is provided in easily understandable forms and media.

• Responsive: Good governance requires that organizations serve all stakeholders within a reasonable timeframe. This component could well be supported by ensuring accountability of all activities and accounting entries of the organization. This component would require projecting all the activities and dealings in the manner that accountability of operations is properly reflected.

• Equity and inclusiveness: A society’s well being depends on ensuring that all its members feel that they have a stake in it and do not feel excluded from the mainstream of society. This requires all groups, particularly the most vulnerable, to have opportunities to improve or maintain their well being. It would mean the active involvement and participation of all the stakeholders and specially the members of General Body and the Managing Committee in all decision making, policy matters and the planning process. To achieve inclusiveness, the organizations need to develop a system of reporting back to members through appropriate formal or informal means.

• Effectiveness and efficiency: Good governance means that processes and institutions show results that meet the objectives of organizations while making the best use of resources at their disposal. The concept of efficiency in the context of good governance also covers the sustainable use of community resources and available financial, material and human resources. The concepts of keeping Trustees motivated and involved and seeking support and participation of volunteers are very important in this context.

• Rule of law: Good governance requires fair legal frameworks that are enforced impartially. The members must be aware about their legal responsibilities, liabilities and obligations of becoming members.. They should be aware about the key provision of the Act which govern roles, responsibilities and liabilities of the members of different classes.

WHAT CAN BE DONE TO ENSURE GOOD GOVERNANCE?

Good government depends on an ability to exercise power, and to make good decisions over time, across a spectrum of economic, social, environmental and other areas. This is linked with the organization’s capacity for knowledge, mediation, resource allocation, implementation and maintenance of key relationships. Part of the institutionalisation of civil society participation is the setting of norms by which to regulate participation in development processes. Here are some of the tools available to respond to the governance challenge: self-assessment, self-regulation, accreditation and adherence to international standards.

• Self-assessment: Self-assessment is a first tool for monitoring whether an organization is using its resources and capacities effectively towards its stated mission and objectives. One approach to self-assessment is for an organization to launch a critical survey amongst key internal and external stakeholders, so as to reveal any substantial differences of perception.

• Self-regulation: Since the late 1990s, civil societies - particularly NGOs - have engaged in self-regulation schemes geared to improve openness, accountability and public confidence in the sector. A first step towards self-regulation is setting up standards for moral, social and ethical behaviour in the form of a code of conduct. This lays out guidelines applicable not only to civil society organizations, but also to their members, officials, employees and volunteers. Most codes of conduct acknowledge that to ensure 'good governance' within civil society, organizations require appropriate institutions through which the principles of accountability, transparency, fairness and equity can be implemented.

• Accreditation: Moving one step further is the setting up of an independent and professional body that verifies compliance with a widely recognised code of conduct. Such a certification agency would be in charge of monitoring that civil society organizations endorse the code and certifying that they meet minimum criteria with regard to financial management, accountability, programme delivery and internal governance. To be effective, accreditation would need to be voluntary and subject to minimum eligibility criteria. The ultimate aim would be to guarantee that certified civil society organizations are reliable, efficient and soundly managed.

• International standards: Recent years have witnessed increased pressure for organizations to demonstrate good practice in accountability and management. The result has been a proliferation of standards and guidelines to support and enhance stakeholder dialogue, social and ethical reporting, organizational culture, working conditions, human resources management, planning, accounting, auditing and reporting. ISO standards, the Global Reporting Initiative and the AccountAbility (AA1000) series are three interesting initiatives that apply generally to the corporate sector but which can be useful to civil society as well. What is important to note is that international standards play a key role in supporting an organization's governance by providing common measurement methods for accountability processes.