Governance in NGO

Posted on 27 February, 2023 at 15:27

The apex of a Non-Governmental Organisation (NGO) generally comprises of the Board of Directors/Trustees and sometimes the General Assembly which oversees the activities of the Board.

 

One of the main functions of the board is setting up organisational direction. This involves drafting the organisation's mission statement that defines its fundamental purpose and reason to exist. This mission statement serves as part of the support mechanism for assessing how the organisational goals have been met and it defines the overall boundaries for course of action. The board also sets the standards and ethical guidelines and monitors organisational performance. The organisation’s management team reports to the Board usually through the Executive Director or Chief Executive Officer who is also a de facto member of the Board.

 

An NGO needs a board charter that clearly sets out the respective roles, responsibilities and authorities of the board of directors/trustees (both individually and collectively) and management in setting the direction, the management and the control of the organisation. The charter should also specify the roles and operation of various subcommittees such as the Audit, Nominations, Finance etc. These sub-committees are vital in examining the more technical issues to do with the performance of the organisation. Financial accountability is usually the responsibility of the Finance and Audit Committees whilst the Nominations and Human Resources Committees specialise in the personnel needs and processes. The number of sub-committees to be set up by the organisation depends on the size of the organisation, activities workload, reporting requirements by various stakeholders such as funding partners and the core business of the organisation.

 

Board selection is usually the responsibility of the General Assembly or the Founding members.  Finding the right composition of the Board could be one of the most important projects that an organisation can take on. A well established and committed board with the right skills can provide a solid platform that will enable the NGO to blossom. Board members with essential skills can reduce the burden on the organisation’s paid staff and volunteers that will liberate them and enable them to achieve more. They can also reduce costs to outside contractors and agencies by allowing the organisation to conduct certain operations such as accounting, fundraising and legal matters in house. Organisations that benefit from active, well informed and responsible trustees are often the best placed to fulfil their missions.

 

 

KFM Consultants is a company that provides financial management, governance and sustainability services for the not-for-profit sector. We are acutely aware of our role and responsibility in continuing to meet the needs of the NGO community.  We continue to offer our Financial Management, Governance and Sustainability service remotely and virtually.