VitalSpark: Coalition Blog

Posted: 23 June 2010, in Blog

A recent group discussion on corporate governance for charities and social enterprises was all going rather predictably. Lots of chat about recruitment, quality, capacity, development, tasks, regulation, leadership, transparency, accountability, burn-out, failures, removal etc.

Payment was mentioned. I’m not against it on principle but others saw this as sacrilegious. Folk did not have a ready answer about how to attract and retain talent if there is only so much of it about.

Democracy was regarded as a fiction. Sure, everyone had an AGM, produced reports and reported to stakeholders but there was a sense that no one cares unless there is a crisis and that social enterprises were only doing this stuff because it was required of them. Accountability was also seen by most as a tick box exercise. “No one ever reads the stuff we produce”.

Founders who have gone past their sell by date created a few laughs but were also regarded as “blockers and dangerous”.  The concept of transparency in the recruitment and selection of board members caused one woman to choke on her biscuit. She recovered to talk about “incestuous” relationships and how to measure and report on director’s performance, attendance or capacity etc.  Folk sitting on their friend’s boards and vice versa got her goat.

No one in the room had ever witnessed a director excusing themselves from meetings due to conflicts of interest. Most folk could think of instances where this should have happened. Everybody worried about potential media reaction to failure/liquidation etc.

I’m intrigued by the lack of confidence we had that day in some of our leaders and employers. So, are your directors “crap”, or are they needing support to maximise their effectiveness? Does your business spend any money on board development, strategic planning and communication?  Has it got a limit on length of service or the age of directors? Would every director of social enterprises in Scotland pass a fit and proper person test? Do (some) managers like having weak boards? Do your directors have a job description?

As a sector are we now mature enough to discuss this and consider how to get our house in (better) order?  The issue of corporate governance in the private, public, co-op and charity sectors has been addressed in the past and we still have catastrophes. Good intentions are not enough.  

So, how about recognising that in order to scale up our activities, the quality of our corporate governance needs to be addressed. Good social enterprises will already be doing this but we might need to think about national programmes, standards or a code of practice. Anyone willing to raise their head above the parapet?