Corporate Governance in the NGOs
The orientations of NGOs are defined, updated and widely communicated: Like other nonprofit organizations, NGOs cannot escape from the need and requirement to explain and make known their major orientations and the strategic framework of their action regularly. This ‘communicational activity’ is found in all the principles. It implies the defining and appropriateness of what is going to be communicated. Good governance verifies that this is true at each level of the NGO’s aims and projects. Relationship with the stakeholders: Good governance devotes itself to federating the internal stakeholders and to managing the interfaces with the external stakeholders. This is how it builds its legitimacy, its image and its representativeness. Good governance also strengthens the support that its stakeholders give it.
- The internal stakeholders are: the members, trustees, volunteer help, expatriate staff, employees, local non-profit organization partners and national staff (in the country of intervention).
- The external stakeholders are: the bene iciaries, financial backers, private donors (including sponsors), public sector of the country of the NGO, public sector of the country of intervention, public opinion in the country of the NGO, public opinion in the country of intervention, suppliers, partners in the field, other non-profit organizations and NGOs, and non-profit organization collectives, etc.
Information is sincere, reliable and available: Each person receives all the information appropriate for his or her position, in an appropriate form. The quality of the information is checked, and its circulation is adapted to the use that must be made of it. The NGO’s financial management is impartial. The notion of the NGO’s impartial management must be subject to internal discussion, because it can be interpreted in different ways. Synergie Qualité defines it as follows: ‘The people who manage and administer the NGO, by themselves or by people who intervene for them, have no direct or indirect advantage from the financial results of the operations’. The balance between administrative and organizational costs and the resources allocated to the operational projects is to be examined regularly, out of concern for efficiency. Good governance, for example, has a cost, but it contributes to improving the interventions to the beneficiary’s advantage. The building up of reserves, investments, loans, guarantees and deposits is governed by the required rules of exactness and carefulness. The representative bodies: The representative bodies of the internal stakeholders can be consulted before a significant expenditure is made (purchase of buildings, for example). The members of a Board of Trustees of an NGO must be volunteers.