Governance or Corporate Governance as it is commonly called in the business world refers to a set of principles, policies and processes by which an institution is run. It defines the values with which an institution conducts itself while it goes about achieving its goals and objectives. Governance not only plays an important role in defining how a company is run, it also helps to instill confidence among donors, participants and society at large. A good governance policy coupled with effective management is a hallmark of successful institutes.
Most NGO’s start small, with day to day management, budgeting and operations being run by founders using hands on approach. They are involved in all matters as both financial and human resources are in acute supply.
Eventually the NGO grows and there are both funds and human resource that require professional management and guidance. The founders gradually step back to allow the management professionals to run the day to day affairs. The founders take up the role of board members and overlook into the functioning of NGO as the head of a large family would. But this is easier said than done though. Often the founders maintain interest in day to day functioning and thus do not give the professionals a free hand to manage the operations.
In our numerous engagements with founders, we have often realized that such conflicts arise due to their fear of loss of organization spirit and culture rather than from lack of trust in operational capabilities of management. This is where a strong governance policy can help. It will help to define the culture of the organization even after the founders have stepped back or moved on. Not only will it instill confidence in the stakeholders but will also prevent missteps on the way.
Importance of adoption of Governance:
- Enhances overall performance of the organization.
- Prevents malpractices and corruption.
- Improves better compliance to various legal regulations and procedures.
- Enhances accountability amongst all the employees and board members.
- Improves financial and strategic planning.
- Facilitates better communication with all stakeholders (donors, project staff, beneficiaries, authorities).
- Donor agencies support organizations that have proper systems in place.
- Enhances stability and sustainability of the organization.
- Improves coordination and collaboration at various levels.
Policies develop due to good governance of an Organization:
- Finance and Accounting Policy
- Human Resource Policy
- Communication policy
- Conflict Resolution Policy
- Procurement Policy
- Leadership Succession Policy
- Fixed Asset Policy
- Membership Policy
For more information, visit https://premium.fundsforngos.org/premium-download-an-ngo-template-for-effective-governance/
