A consultation on a draft of the updated governance code for the voluntary sector was published earlier this month. The draft code recognises that appropriate behaviour and culture are as important as structures and processes, and that it is important to get the right balance between appropriate oversight and day-to-day management.
Board members should delegate where possible, but in accepting their positions board members take on duties and responsibilities that they cannot abdicate. Their responsibility is a collective one, which is more readily satisfied if there is as much requisite experience presented around the table as is consistent with the effective working of the group. If the board believes that the requisite skills do not exist, it should re-evaluate its composition. However, it is important to recognise that existing skills within both the board and executive management team should be complementary and not necessarily duplicated.
Larger organisations are usually in the position where the board has had the foresight to appoint experienced and expert management. This sometimes causes a dilemma, and the charity board members’ position is in stark contrast to that of the non-executive director of a company in the private sector, who shares their responsibilities with their executive colleagues.
It is the reaction to the starkness of their position that often results in charity board members becoming over-involved in operational management to the detriment of their critical perspective. In some ways, the greater the competence and professionalism of management, the greater the challenge and the more difficult the role of the board.
In our sector we recognise the need for boards to empower senior management and for management to empower staff. Empowerment is important, but empowerment must be balanced with accountability. Too often there is unwarranted expectation that things are being done as they should be done and that good practice is being followed.
True empowerment requires an enabling environment, and this means that the organisation must ensure that those it is trying to empower have the aptitude, core competencies, values and skill base to properly use tools, methodologies and policies that must support both accountability and devolved decision-making. True empowerment is possible only when suitably experienced individuals take decisions within their competence and adhere to an agreed framework that does not require constant reference to or follow-up from others. In practice, this is effective only when individuals both follow and rely on clear procedures and policies that set the parameters and framework for decision-making and operations.
True and effective empowerment needs three components: responsibility, authority and accountability. As activities or tasks are delegated to teams or individuals, all three components need to be considered. The correct balance will be achieved only when individuals or teams have a clear understanding of responsibilities, the authority necessary to fulfil these responsibilities and the accountability for the consequences of what they have done or failed to do. This accountability is required not just from management but also from boards.
Getting the balance right is the challenge. While the board holds its brief to remain engaged, board members should take care to avoid over-involvement in the executive function. The board’s role is wide and encompasses many different issues that change and evolve over time. No board member should take for granted that established procedures, services and protocols are appropriate for the needs of today and tomorrow. It is by holding this frame that boards can best fulfil their obligations and make the greatest contribution. It is in this stance that their greatest value lies as they create and hold a space that is their true support to management.
Pesh Framjee is head of the not-for-profit unit at Crowe Clark Whitehill