1

6 August 2016

Board Orientation &Development Workshop

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INTRODUCTION – Chairperson

SESSION ONE – Malcolm Boyd

The Third Sector Landscape - (Set the scene) NPO organisational structures – (Understanding the difference) The concept of governance - (Explanation and interaction) Roles and responsibilities and Standard of conduct for directors -

(Explanation and interaction)

Tea/Coffee

SESSION TWO – Malcolm Boyd

Board composition and Board-Committee Terms of Reference andcomposition - (Understand the board structures)

Codes of Good practice and their relevance - (The value basedapproach)

Board effectiveness - (Understand the board performanceexpectation)

The five phases of growth of an organisation - (Understand where theorganisation fits)

Close - Chairperson

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“Give me now wisdom and knowledgeto go out and come in before thispeople, for who can govern thispeople of yours, which is so great?”

King Solomon

Source: MRB Bus ©

Responsible Governance

Vision Strategy

Funding Policy

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“Example is not the mainthing in influencing others.It is the only thing”. AlbertSchweitzer

Third SectorLandscape

Set the scene

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That part of an economy or societycomprising non-governmentaland non-profit-makingorganisations or associations,including charities, voluntary andcommunity groups, cooperatives,etc.

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Type of Organisation

Number of RegisteredNPOs as indicated in

the DSD report 2012/13(March 2013)

Number of RegisteredNPOs as indicated in the

DSD report 2014/15(March 2015)

Number Percentage Number Percentage

Old Section 21 (New NPC’s) 3069 3 8187 6

Non-profit Trust 2046 2 1364 1

Voluntary 97182 95 126902 93

Total 102297 100 136453 100

Registered NPO’s as at 01/08/16

Current total registered 158 151

De-Registered NPOs 3 354

Total Applications in Progress 1873

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2014/15 (March 2015)

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Source: DSD State of NPOs report2014/15 (March 2015)

NPOorganisational

structures

Understanding thedifference

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A Nonprofit Organisation (NPO) isdefined as: a Voluntary Association,Company or Trust:-

◦ Established for a public purpose, and◦ The income and property of whichare not distributable to its membersor office bearers except asreasonable compensation forservices rendered.

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- Voluntary - Independent - Not-for-profit (SocialImpact) - Not self-serving

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Any organisation that is not for profit and is notpart of government can apply for registration; that is:◦ Non-Governmental Organisations (NGO)◦ Community Based Organisations (CBO)◦ Faith Based Organisations (FBO)◦ Organisations that have registered as the old Section

21 Companies under the Company Act 61 of 1973,and new non-profit companies under the newcompanies act 71 of 2008. (NPC)

◦ Trusts that have registered with the Master of theSupreme Court under the Trust Property Control Act57 of 1988. (NPT)

◦ Any other Voluntary Association that is not-for-profit.(VA)

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LEGAL ENTITY VoluntaryAssociation Nonprofit Trust Nonprofit

Company

OFFICE OFREGISTRATION No registration Office Master of High

Court

Companies andIntellectualProperties

Commission(CIPC)

REGULATINGLAW Common Law

Common Law &Trust Property

Control Act 57 of1988 as

amended (Non-profit Trusts)

Companies Act71 0f 2008

GOVERNANCESTRUCTURE

Steering/ManagementCommittee and/orGeneral Members

Board of TrusteesBoard of

Directors and/ormembers

REGISTRATIONREQUIREMENTS

A completed NPOapplication form andtwo signed copies ofthe Constitution

A completed NPOapplication form

and Deed ofTrust/Trust

Deed

A completedNPO application

form andMemorandum

ofIncorporation

FOUNDINGDOCUMENTS Constitution Deed of Trust Memorandum of

Incorporation

Regulatory Frame work

NGO/FBO/CBO/CSO

Traditional informalrooted in

communities &generally lack

capacity & access toresources.

Old Section 21 Companies and new NPC’s– (New Companies Act 71 of 2008)

Nonprofit Trusts- Common Law & TrustProperty Control Act 57 of 1988 as

amended (Non-profit Trusts)

Voluntary Associations – (Common Law)

NGO/NPT/NPCGenerally larger

sophisticated urbanbased conventionalO.D. Systems & allrelevant skills &

capacity

Nonprofit Organisation Act 71 of 1997(All have to meet the same compliance

requirements)

Public Benefit OrganisationsSARS - Income Tax Act

(Tax exemption Including : Section 10(1)(cN) Trading Rules –Partial Taxation of Trading receiptsand Section 18 A)

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◦ Creates an environment fororganisations to grow and develop in.

◦ Sets up an administrative frameworkfor organisations to work in.

◦ Encourages non-profit organisationsto run efficiently, with openness andaccountability.

◦ Helps the public to get informationabout registered non-profitorganisations.

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◦ Promotes a spirit of co-operation andshared responsibility betweengovernment, donors and other peopleor institutions that are interested inthe non-profit sectors’ work.

◦ Has an appeal process for non-profitorganisations.

NB (The fifth draft of the Draft NPO Policy Framework on the Amendmentsof the Non-profit Organisations Act 71 of 1997 is still under review as atAugust 2015)

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In April 2009 the Companies ActNo. 71 of 2008 was promulgated andreplaces the 35 year old CompaniesAct No. 61 of 1973.

The passing of this Act was theresult of a lengthy and rigorouslegislative review process thatinvolved widespread publicparticipation.

Source: Inyathelo - Insights 3rd Sector Law

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The purpose of the Companies Act is, amongstothers, to:

“…provide for the formation, operation andaccountability of companies in a manner designedto promote, support and enhance the capacityof such companies to perform their function…”

Chapter 2 - part F, sections 57 – 78 cover‘Governance of Companies’

Schedule 1 – ‘provisions concerning non-profitcompanies’

The conceptof governance

Explanation andinteraction

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It relates to decisions that defineexpectations, grant power, or verifyperformance. It consists either of aseparate process or of a specific partof management or leadershipprocesses.In the case of a business or of a non-

profit organisation, governance relatesto consistent management, cohesivepolicies, processes and decision-rights for a given area of responsibility.

(Wikipedia)

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Since governance is the process ofdecision-making and the processby which decisions areimplemented, an analysis ofgovernance focuses on the formaland informal actors involved indecision-making andimplementing the decisions madeand the formal and informalstructures that have been set inplace to arrive at and implement thedecision.

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Outreach: scanning for trends, needs,expectations, problems

Stewardship: ensuring vision and evolution Oversees operational structure and

operations: ensuring accountability,responsibility, policy implementation, operationaleffectiveness, financial sustainability

Ambassadorial and legitimising: promotion,networking, representation

Self-reflection and assessment: internalreviews, trust-building

Source: Bradshaw, Hayday & Amstrong

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What are your biggestchallenges regarding effectivegovernance in yourorganisations? Governance is normallyassociated with ethics. Wouldyou agree? What are the mostprominent ethical risks inNPOs?`

Roles andresponsibilities

and Standard ofconduct ofDirectors

Explanation andinteraction

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Vision

Mission

Strategic Priorities

Goals

Operations

BOARDAdopts/Owns

MANAGEMENTImplements

NB. Board and Management work together to define strategic priorities, which are owned by the Board andimplemented by Management, within the Executive limitations (Policy, procedures, approval frameworks,

delegation of authority etc), set by the Board .

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Determine mission and purpose Set the strategic priorities Select the chief executive Support and evaluate the chief executive Ensure effective planning Monitor and strengthen programs and

services Ensure adequate financial resources Protect assets and provide financial

oversight Build a competent board Ensure legal and ethical integrity Enhance the organisations public standing

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Ensures that thecompany/organisation operates withinits objectives and powers.

Is ultimately responsible for theOrganisation.

Is appointed by Incorporators at theAGM. (if incorporated with Members)

Must retain full and effectivecontrol over the company.

Must ensure that material mattersremains in the hands of the Board.

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The Board meets regularly and all directorsto attend

Ensure that a Company Register, notices,Agenda and Minutes to be used for meetings

Quorum and voting protocol is set out inMoI, Trust deed, Constitution

Collectively the Board is responsible for:o The strategic plan including budget and

operation’s plano Adequate funds for the Company’s plans

and operationso The annual financial statements and

Trustee/Director’s report

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Adequate system of operational and financialcontrols

To appoint a Senior Manager with adequatepowers of authority & approval frameworks

Ensure that the company operates responsiblyand within the spirit and letter of theCorporate Governance Code

Provide effective leadership based on anethical foundation

Identify internal and external stakeholdersand develop an appropriate communicationspolicy

Meet the fiduciary requirements of the PublicFinance Management Act, etc. (If required)

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always be open and honest during boardmeetings

strive to always be reliable andtrustworthy in all dealings

director's must never profit personallyfrom any decisions or allow nepotism

must always work towards theimprovement of the organisation andnever cause it harm

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always act in the best interest of theorganisation

make sure to be informed about allmatters relating to the organisation

never have any personal financialinterest in matters arising

must be able to trust and rely on staffmembers/counsel/committees etc inorder to make final and confidentdecisions.

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CORE DOCUMENTS & POLICIES(Uphold. Recommend and Approve / Endorse)

RISK

OVE

RSIG

HT(A

ppro

ve /

End

orse

Top

Ris

ks, ,

Mon

itor &

Rev

iew)

STRATEGY(Input, ‘Ownership’, and Approve / Endorse)

ACCOUNTABILITY(Approve / Endorse Plans , M

onitor,Uphold Decision

Rights)

Management cango anywhere

within theparameters,

withoutinterference from

the governingbody

If managementbreaches any ofthe parameters,the governing

body must takeeffective remedial

action

The governingbody and

managementmust respect and

support thedistinct role of the

other

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How important in your opinion are thedirectors standard of conduct to yourorganisation ?

Do you think that they should apply toall NPO structures, even VoluntaryOrganisations?

Boardcompositionand Board-CommitteeTerms of

Reference

Understand the boardstructures

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There is no optimum size for a board ofdirectors.

The Companies Act, 71 of 2008 s66specifies that non-profit companiesrequire at least three directors, but setno maximum number.

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Factors determining the number of seatsat the board table include the:

Evolving circumstances and needs of theorganisation. Stakeholders of a smallNonprofit organisation with a tightlyfocused mandate might regard a largeboard as an expensive luxury;

while a large npo with diverse andcomplex operations would almost certainlyoverstretch the resources of a smallboard.

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There is a need to achieve an appropriatemix of executive, non-executive andindependent non executive directors.

Governance recommendations and JSEListings Requirements for the minimumnumber of independent non-executivedirectors.

King III recommends a majority of non-executive directors of which the majorityshould be independent.

In the case of NPO’s the norm is that 90 –95% of the directors are independent non-executive (Voluntary).

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Establishment of board committees (auditcommittee, nomination committee, social andethics committee etc.) becomesimpracticable with small boards.

Absence of a handful of directors can makeit impossible for a small board to raise aquorum.

Existence of too large a board can slowdown decision-making and increase therisk of bureaucracy.

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Each company/organisation needs todetermine the appropriate size for itsboard based on consideration of theseand other relevant factors includingdiversity and demographics.

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Principle 2.23: The board should delegatecertain functions to well-structuredcommittees but without abdicating its ownresponsibilities

The purpose of establishing committees of thegoverning body is to alleviate its workload andto create committees that can function moreeffectively due to its composition consisting of asmaller grouping that can focus on key areas.

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The governing body should determine whichcommittees are required by assessing whichare key risk areas for the organisation.Examples of committees that could beestablished include committees for audit,finance, fundraising, human resources, socialand ethics and risk or a combination of some ofthese.

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The board may appoint any number ofboard committees and delegate to anycommittee any authority of the board.

Board committees may include non-directors but non-directors will not have avote.

The delegation to any committee does notin itself relieve the director of the directors’duties.

In relation to standards of conduct andliability, all members of the boardcommittees are deemed to be directors (s75- s78).

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Depending on the size and level ofbusiness/programme activity of theCompany, and in terms of their MoI theBoard should try to ensure that at leastthe following Standing Committees areappointed:

Executive Committee Audit Committee Remuneration Committee

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An Executive Committee (ExCo) can beappointed:

ExCo assists the Executive/Senior Managerin acting for the Board in managing theorganisation when the Board is not in session.

Subject to the statutory limits and Boardlimitations on delegation of authority to theExecutive/Senior Manager

The ExCo acts as a medium ofcommunication and co-ordination betweenthe organisation and the Board

ExCo is generally granted all powersconferred upon the directors by theMemorandum of Incorporation

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The Audit Committee Is an advisory body without executive

powers To consist of Independent Non Executive

Directors Focus on the risk management of the

Company Meets at least twice a year, before

commencement of the annual audit andafter completion of the external audit

Make recommendations to the Board forthe retention or replacement of externalauditors

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The Remuneration Committee Is an advisory body without executive

powers To consist of Non Executive Directors Meets at least twice a year, before

finalisation of annual increases andbonuses

To make informed recommendations andnot to make management decisions

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Additional Committees can be set upon an ad hoc basis to undertaketasks for the Board, such as:

Short term projects Feasibility studies Investigate proposals and make

recommendations

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Source KPMG Toolkit for TheCompany Director (ThirdEdition)

AuditCommittee

RemunerationCommittee

NominationCommittee

RiskCommittee

Social and EthicsCommittee

Composition ofthe Committee

Minimum threeIndependent

non-executivedirectors

Majority non-executive directors

MajorityIndependent

Majority non-executivedirectors

MajorityIndependent

Mixed

At least threedirectors/prescribedofficers of which one

must be a non-executive

Chairman of theBoard can be:

Member = NO

Chairman = NO

Attendee = YES

Member = YES

Chairman = NO

Member = YES

Chairman = YES

Member = YES

Chairman = NO

Member = YES

Chairman YES

CEO/ SeniorExecutive can

be:

Member = NO

Attendee = YES

Member = NO

Attendee = YES

Member = NO

Attendee = YES

Member = YES

Attendee = YES

Member = YES

Attendee = YES

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How important in your opinion is theBoard composition?

Do you think that the compositionshould change as the organisationchanges/grows?

Why do Boards need to have sub-committees?

How important is it that sub-committees have clear terms ofreference with agreed approvalframeworks and levels of authority?

Codes of goodpractice and

there relevance

The value basedapproach

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The code of good practice does notsupersede Company and common Lawor any other legislation

More than a set of guidelines andrules

Primarily to enhancebusiness/organisation performancethrough knowledge and skills atBoard level

Draws attention to duties,responsibilities, legal obligationsand liabilities

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There is good guidance on and requirementsfor good governance applicable to non-profit organisations.These include:

SANGOCO’s Code of Ethics for Non-profitOrganisations (1997);

Department of Social Development’s Codeof Good Practice for South African Non-profitOrganisations (2001);

KING III’s Code of Good Practice (2009);and

Inyathelo’s Independent Code of GoodPractice (2012).

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The third King Report (King III) was published- September 2009

King IV process started in October 2014. NPOWorking group session were held. The draftcode is currently open for review and input.Launch of the code is planned for November2016.

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In contrast to its predecessors, King IIInow “applies to all entities regardless ofthe manner and form of incorporationor establishment and whether in thepublic, private sectors or nonprofitsectors.”includes all non-profit organisations in

South Africa.

Source: South Africa’s King III, Highlighting the need for a separate nonprofit governance code - Ricardo G Wyngaardand Peter SA Hendricks May 2010

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“This Code and the Report refer to thefunctional responsibility of thosecharged with governance in any entityand should be adapted as appropriate”

Nine governance elements◦ 75 Principles◦ 298 Recommended practice

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Governance elements◦ Ethical leadership and corporate citizenship◦ Boards and directors◦ Audit committees◦ The governance of risk◦ The governance of information technology◦ Compliance with laws, rules, codes and

standards◦ Internal audit◦ Governing stakeholder relationships◦ Integrated reporting and disclosure

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King III consists of 75 principles, all of whichare required to be applied by directors, interms of the new companies act. However, inaddition to the 75 principles;

King III provides 298 recommendedpractices - it is these practices whichorganisations may choose to apply orexplain in what other way they are applyingthe principles.

The “King Code and Report on Governance for South Africa” (King III) was released on 1 September 2009, with an effective date of1 March 2010.

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King III Code may be used as a tool byNPOs to:

Assess their governance processes againstbest practice standards;

Assess potential risk; Develop strategies to build organisational

resilience; and Provide assurance to funders that

governance principles have been consideredand implemented, where appropriate.

NB. The King III Report and Code can be publically accessed, free of charge on theIoDSA website at www.iodsa.co.za . The King III Code and Practice Notes can beprinted and the full King III Report viewed in i-paper format.

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With all the legislation in place why doesan organisation need a code of goodpractice?

In your opinion, how do you evaluateyour organisations readiness for theimplementation of a code of goodpractice?

Were you aware of these codes and do youhave a plan to apply them to yourorganisation?

Boardeffectiveness

Understand the boardperformanceexpectation

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King III, Principle 2.22: The evaluation of theboard, its committees and the individual directorsshould be performed every year.

DSD’s Code requires the governing body tomeasure its own performance and more specificallythat ‘every two or three years the governingbody should give itself an opportunity to examineits own progress and performance. This is mosteffective if each governing body member joins theorganisation with an agreed standard ofperformance or job description in place.

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Refers to the quality of performance of the Boardnot only in meetings, but also in their term of office.

Board effectiveness begins with selection andappointment of the right people, with the right skills,for example finances, HR and business.

Motives such as self-promotion, visibility ornetworking will not be sufficient reasons.

Selection of Directors must be planned and wellmanaged by the Members.

Board Directors will only be effective if they do notrepresent the interest of participating organisations butonly focus on the aims and objectives of theCompany.

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Attend all meetings Positively address matters before them Fully participate in deliberations Continuously strive to be fully informed on

any matter/issue relating to the Company Abstain from political behaviour, including

Party-, Local-and Corporate Politics Act with utmost sincerity and integrity

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Respect the value of democratic butresponsible contribution by others

Respect the role of the Chair as guardian ofthe process

Avoid personalising debates Place a high value on trust Respect the right of the Chair to manage

priorities Honour and abide by final decisions of the

Board, even if a person does not agree withthe decision

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Progress can be measured at an evaluationworkshop, or by interviews with eachmember conducted by the chairpersonand/or the CEO. Minimum criteria againstwhich performance can be measured couldinclude: knowledge of the organisation;commitment to the organisation; influencein the client or donor community; ability togive; willingness to work.’ A peer and selfevaluation process could also beimplemented.

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Responsible Boards Exceptional Boards

Establish and review strategic plans.

Allocate time at meetings and betweenmeetings to address what matters most andengage in strategic thinking on a regularbasis.

Adopt a conflict-of-interest policy.

Adopt a conflict-of-interest policy thatincludes guidelines for disclosure, review, andrecusal; require board members to sign theconflict-of-interest statement annually; andrigorously adhere to the policy.

Monitor financial performance and receiveprogramme updates.

Measure overall organisational efficiency,effectiveness, and the impact using varioustools including dashboards.

Design board meetings to accomplish the work ofthe board.

Make meetings matter by improving meetingefficiency, using consent agendas and meetingregularly in executive sessions – with andwithout the chief executive – to allow forconfidential discussions.

Orient new board members.

Invest in ongoing board development todeepen the commitment of board members,and have board members reflect on their ownperformance by conducting regular board selfassessments.

Table 2.1 Responsible Boards and Exceptional Boards

Source: The Handbook of Non-ProfitGovernance – (BoardSource).

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Considerations5

VeryGood

4Good

3Ave.

2Fair

1Poor

1board has full and common understanding of the rolesand responsibilities of a board

2board members understand the organization's missionand its products / programs

3structural pattern (board, officers, committees,executive and staff) is clear

4board has clear goals and actions resulting fromrelevant and realistic strategic planning

5board attends to policy-related decisions whicheffectively guide operational activities of staff

6board receives regular reports on finances/budgets,products/program performance and other importantmatters

7board helps set fundraising goals and is activelyinvolved in fundraising (nonprofit-specific)

8board effectively represents the organization to thecommunity

9board meetings facilitate focus and progress onimportant organizational matters

10board regularly monitors and evaluates progresstoward strategic goals and product/ programperformance

11board regularly evaluates and develops the chiefexecutive

12board has approved comprehensive personnel policieswhich have been reviewed by a qualified professional

13each member of the board feels involved andinterested in the board's work

14all necessary skills, stakeholders and diversity arerepresented on the board

Source: Carter McNamara, AuthenticityConsulting.

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Board Member 1 Board Member 2 Board Member 3 Board Member 4 Board Member 5 Board Member 6 Board Member 7 Board Member 8 Board Member 9 Board Member 10

1 Very Poor2 Poor3 Acceptable4 Good5 Very Good

1.       Level of attendance of board meetings.2.       Punctuality and availability.3.       Level of preparation for board meetings4.       Ability to follow agenda and remain focused5.       Level of constructive participation at meetings6.       Degree of respect shown to other members7.       Respect shown for structure and proceedings8.       Respect shown for the authority of the chair9.       Degree of investigative questioning of information.10.    Objectivity and even-handedness displayed.11.    Degree of independence maintained.12.    Overall impact on and contribution to team effectiveness

13.    Degree of personal courage displayed.14.    Emotional self-control.15.    Positive and affable disposition.16.    Level of self confidence17.    Able to listen and empathise.18.    Self-motivation and energy level.19.    Free of prejudice and cultural bias.20.    Level of honesty and integrity.21.    Initiative and determination demonstrated22.    Reliability and trustworthiness.23.    Stimulates and encourages open discussions24.    Self-management of difference between dissent and

disagreement

25.    Grasp of own duties and responsibilities26.    Grasp of the strategic issues.27.    Depth of general business knowledge28.    Ability to systematically follow developments29.    Ability to understand processes.30.    Verbal submission of information and reports31.    Written submission of reports and documents32.    Contribution in primary discipline33.    Tolerance for ambiguity and complexity34.    Thoroughness and application of mind35.    Participation between meetings36.    Diligence with tasks and targets37.    Accomplishment of group objectives38.    Influence in the community generally39.    Influence in the organisation’s environment40.    Open–mindedness and degree of solution orientation.

Quality of Personal Performance:

Completed by (Please type in your name):Board Protocol and Proceedings

Professionalism and Competence:

Assessing Individual DirectorsAreas of expected individual performance

Evaluation Grid to be used

Source: ourPERFORMANCE © MRB Bus.

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Assessing Individual Directors

Areas of expected individual performance Personalevaluation

Personalevaluatio

n 1 2 3 4 5 6 7 8

Evaluation Grid to be used

1 Very Poor

2 Poor

3 Acceptable

4 Good

5 Very Good

Completed by (Please type in your name):

Board Protocol and Proceedings1. Level of attendance of board meetings. 3 5 4 4 3 4 2

2. Punctuality and availability. 4 5 4 5 3 4 2

3. Level of preparation for board meetings 5 4 4 4 4 4 5

4. Ability to follow agenda and remainfocused

5 4 5 4 4 4 5

5. Level of constructive participation atmeetings

4 4 4 4 4 4 5

6. Degree of respect shown to othermembers

4 4 4 5 4 4 4

7. Respect shown for structure andproceedings

4 4 4 5 4 4 5

8. Respect shown for the authority of thechair

5 4 5 5 4 4 5

9. Degree of investigative questioning ofinformation.

4 4 4 4 4 4 4

10. Objectivity and even-handednessdisplayed.

4 4 4 4 4 4 4

11. Degree of independence maintained. 5 4 5 4 4 4 4

12. Overall impact on and contribution toteam effectiveness

4 4 3 4 5 4 3

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NB. Please note that thisspreadsheet depicts theIndividual Directorspersonal assessmentdepicted against theaverage of their peersassessment of them. Thegraphs show theirpersonal assessment asthe blue line and theaverage peer evaluationas the pink line.Generally areas forDirector Developmentwould be where there isa differential of at least 2points.

1 Very Poor2 Poor3 Acceptable4 Good5 Very Good

Personal Peer Ave Variance

1.       Level of attendance of board meetings. 5 3.85 1.152.       Punctuality and availability. 5 3.85 1.153.       Level of preparation for board meetings 4 3.77 0.234.       Ability to follow agenda and remain focused 4 3.85 0.155.       Level of constructive participation at meetings 4 3.62 0.386.       Degree of respect shown to other members 5 3.92 1.087.       Respect shown for structure and proceedings 5 3.92 1.088.       Respect shown for the authority of the chair 5 4.08 0.929.       Degree of investigative questioning of information. 4 3.31 0.6910.    Objectivity and even-handedness displayed. 4 3.23 0.7711.    Degree of independence maintained. 4 3.23 0.7712.    Overall impact on and contribution to team effectiveness

3 3.54 -0.54

13.    Degree of personal courage displayed. 3 3.23 -0.2314.    Emotional self-control. 3 3.69 -0.6915.    Positive and affable disposition. 5 3.85 1.1516.    Level of self confidence 5 3.69 1.3117.    Able to listen and empathise. 5 3.62 1.3818.    Self-motivation and energy level. 4 3.85 0.1519.    Free of prejudice and cultural bias. 4 3.85 0.15 Chair Motswai20.    Level of honesty and integrity. 5 3.92 1.0821.    Initiative and determination demonstrated 4 3.69 0.3122.    Reliability and trustworthiness. 5 3.92 1.0823.    Stimulates and encourages open discussions 4 3.38 0.6224.    Self-management of difference between dissent and

disagreement 4 3.15 0.85

25.    Grasp of own duties and responsibilities 4 3.69 0.3126.    Grasp of the strategic issues. 4 3.62 0.3827.    Depth of general business knowledge 5 3.92 1.0828.    Ability to systematically follow developments 4 3.69 0.3129.    Ability to understand processes. 4 3.77 0.2330.    Verbal submission of information and reports 4 3.54 0.4631.    Written submission of reports and documents 4 3.00 1.0032.    Contribution in primary discipline 5 3.38 1.6233.    Tolerance for ambiguity and complexity 4 3.23 0.7734.    Thoroughness and application of mind 4 3.54 0.4635.    Participation between meetings 4 3.15 0.8536.    Diligence with tasks and targets 4 3.31 0.6937.    Accomplishment of group objectives 4 3.00 1.0038.    Influence in the community generally 4 2.69 1.3139.    Influence in the organisation’s environment 3 2.54 0.4640.    Open–mindedness and degree of solution orientation. 4 3.85 0.15

Assessing Individual Directors

Areas of expected individual performance

Quality of Personal Performance:

Professionalism and Competence:

Evaluation Grid to be used

Completed by: Malcolm Boyd

Board Protocol and Proceedings

0

1

2

3

4

525.

26.

27.

28.

29.

30.

31.

32.33.

34.

35.

36.

37.

38.

39.

40.PersonalPeer

0

1

2

3

4

51

2

3

4

5

6

7

8

9

10

11

12PersonalPeer

0

1

2

3

4

513.

14.

15.

16.

17.

18.19.

20.

21.

22.

23.

24.PersonalPeer

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Why would organisations wish toevaluate their boards performance?

Do you think that most NPO governancestructures are conducting regularperformance evaluations?

If not, why not, what do think thefactors are that would stop them fromdoing this?

Do you think that performanceevaluations are linked to successionplanning at a board level?

The five phasesof growth of an

organisation

Understand where theorganisation fits

Phase Growth through Crisis of1 Creativity: In this early stage, there are only few people

in the company. They know each other well and sharetheir experience, knowledge, and information. Allrelevant issues are discussed among all people. This isthe typical creative start-up culture.

Leadership: As the company gets larger, it getsincreasingly difficult to do everything in a mutual effort.They have problems to distinguish important fromunimportant issues, since there are few or noorganizational structures that allow allocating work tocertain persons. The company needs a strong leader whoholds the team together and establishes appropriatesystems and structures.

2 Direction: Now the company is able to direct certainissues and tasks to certain people. Normally, directivesand control are highly centralized at this stage.

Autonomy: If the company continues to grow, thisleads to an extremely high workload for the manager orthe management team. They have to handle nearlyeverything in the company. They are responsible forassigning tasks, controlling results, acquiring work,solving problems, motivating people etc. As the companyreaches a certain size, management will not be able tocontinue this way. They have to give up some of theirautonomy and to share some tasks.

3 Delegation: Management delegates some tasks,functions and authorities to other people in thecompany. Departments emerge and develop their owndynamics.

Control: If management now fails to control theactivities of these departments, they would start tohandle tasks more from their own view than with thewhole business in mind. At its extreme, departmentswould work against each other.

4 Co-Ordination: Projects and tasks are coordinatedbetween all parts and departments of the company sothat they are well in tune with each other.

Red Tape: This coordination can lead to a high level ofbureaucracy. Fine-tuning requires high efforts that makeit difficult for the company to adapt to changes in theexternal environment.

5 Collaboration: The co-operation between all parts ofthe company is so well organized that they really canwork together effectively in whatever situation.

Growth: Nevertheless, doing business is never easy andthe next crisis is waiting for sure.

Small

Leadership

Autonomy

Control

Redtape

Size

Large

Young

Age

Mature

Crisis of

Creativity

Direction

Delegation

Co-ordination

Collaboration

Growth through

Growth Alliances

Growth Phases Model(Greiner)

?

Phases of Growth and Problems

Where is your organisation along this graph?

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What value do you think Boardperformance evaluations bring to theorganisation?

What Governance issues requiringattention do you see in yourorganisation, and

What plan of action do you propose toaddress these?

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IMPORTANT:

The information contained in this presentation does not necessarily represent the opinion ofThird Sector Insights NPT (TSI), MRB Bus, or the authors. The contents do not constitute adviceon the topics covered. While reasonable care has been taken to ensure the accuracy of theinformation, TSI and MRB Bus expressly disclaims all and any liability to any person, relating toanything written or omitted to be written or to the consequences thereof in reliance upon thecontents.

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To laugh often and much; To win the respectof intelligent people, and the affection ofchildren;To earn the appreciation of honest critics, andendure the betrayal of false friends;To appreciate beauty; To find the best inothers;To leave the world a bit better, whether by ahealthy child, a garden patch, or a redeemedsocial condition;To know that even one life has breathedeasier because you lived.This is to have succeeded.

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ourGOVERNANCE © is an e-learning programmefor executives and directors of Non-profitOrganisations. The objective of the programme is toprovide directors of Non Profit Organisations with theunderstanding, guidelines and information they needto enable them to manage their organisation, itsaffairs and undertakings effectively, comply with legaland legislative requirements, and to fulfill theobligations and expectations incumbent upon them asdirectors.

The e-learning programme is grouped under fourmodules covering fifteen sections in total.

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