DGMT NGO Commons - A Resource for Enhancing Good Governance and Accountability

A Resource for Enhancing Good Governance and Accountability

Role of an Organisation’s Governing Body

It is the organisation’s founding document that provides the framework for the general attributes of an individual organisation’s Governing Body, such as a Board. Overall, these attributes aim to ensure that the Board is able to provide effective, collective oversight of the organisation’s activities with respect to four key areas:

Ensuring Legal Compliance:

As a legal structure it is necessary for an NPO to adhere to relevant legislation (some of these requirements are dictated by the Companies Act and the Income Tax Act, depending on how the organisation has been legally established). The Board is, therefore, responsible for establishing a legal compliance framework and for the ongoing review of legislation to ensure that the organisation is not in breach of current laws. Where organisations are also registered as a Public Benefit Organisation (PBO), the Board is responsible for ensuring that the organisation complies with all relevant South African Revenue Services (Sars) regulations.

The Board also holds responsibility for drawing up relevant governance documents for the organisation which outlines how the organisation will operate. Included in these documents are the broad principles of basic internal structures as well as guidelines of how the finances and assets of the organisation will be dealt with.

Guiding Strategic Direction and Annual Planning:

The Board plays a very important role in annually reviewing, guiding and endorsing the strategic goals of the NGO. Critical to this process is reviewing and/or evaluating the organisation’s implementation of its strategy during the previous year, and providing guidance and support to help the organisation reach the goals it has set. During this review process, it is important to ask critical questions, such as; what did we set out to do this year; what have we actually been able to achieve and what not; do we need to do anything differently; will the services that the organisation provide still be needed in this community, next year?

Such review, allows for effective forward planning and importantly, ensures that fund-raising strategies are aligned with a clear sense of direction (what the organisation is wanting to achieve) and with a good justification for resources that will be needed.

Providing Financial Oversight:

The responsibility for ensuring that the organisation has the resources and funds it requires to do its work effectively rests with the Board. Equally, therefore, the Board also holds responsibility for monitoring how the organisation uses its resources and how it spends its money. It is for this reason that the Board is required to establish a financial policy and budget guidelines, which is in keeping with the spirit and founding mission of the organisation, and to which the organisation must adhere.

Also at this level, the Board also appoints the organisations leader (Head/CEO/Director), assesses whether the organisation’s leadership is performing its management function efficiently; determines salary structures; and commissions, reviews and approves annual audited financial statements.

Conducting Programmatic Review:

While it is the organisation’s vision, mission and goals that provide direction and focus for its work, it is important to note that  they are also the basis on which the organisation’s programmes are planned.   A programme relates to the structures, processes and practices that have been put in place to deliver activities (which may be services, projects, campaigns, research) that meets  the needs of beneficiaries and collectively, contributes to the organisation’s mission. The Board holds responsibility for ensuring that a strategic plan is developed that maps out the organisation’s strategy for what it wants to achieve over a three to five year period. Such a plan brings structure and coherence to the organisation’s work and provides an extremely useful measure for tracking performance. Strategic planning also forces the organisation to make important decisions: can the programme be implemented in the way the organisation would like it to, given the resources available to them; where is the programme likely to add the most value and hence, the greatest impact?

It is worth remembering that because the Board has in-depth knowledge of the organisation, but is generally not involved in the implementation or delivery of services, it is well placed to review the quality of service provided by the organisation and, therefore, to provide guidance and support for improvement.