Strengthening donor

communications
Good management and
governance
www.pwc.com
Eric Yeung
PwC Hong Kong
PwC
Strengthening donor communications
through good governance
Ensuring that NGOs have enough funds to run projects is a #1 issue
for NGOs
To secure long term funding from donors its essential to
communicate to donors clearly and demonstrate good governance
Having the confidence to tell your donors about the strong
governance of your organisation, and being able to show examples,
builds trust with donors and key stakeholders
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What is governance?
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What is governance?
Overviewof governance
Mechanism for monitoring actions and decisions of organisations
Align the interest among stakeholders
Provide a safe and sound environment to mitigate risks
Embed accountability in management decisions
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The art of effective management / always doing the right thing
PwC
What is governance?
Why is good governance important?
Large amounts of public funds, assets and resources are managed by the boards
of non profit organisations
Accountability to the government, donors and the community is expected
It is essential to the credibility, success and sustainability of both private and
public organisations
Provide a good organisational structure to reduce the risk of fraud
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NGOs are under the spotlight
Recent scandals have increased public
attention on charities and how they operate
Law Reform Commission has recommended a
Charities Commission be created to register,
monitor and regulate Hong Kong charities
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Good governance and NGO management
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Good governance and NGO management
Key principles of governance and NGO management
A focus on the purpose of the
organisation and the outcomes and
impacts on service users and the
community
Clearly defined organisational
functions, roles and responsibilities
Developing the capacity and
capability of the board to be
effective
Engaging with stakeholders to help
drive accountability
Managing risks and opportunities
by making informed and
transparent decisions
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Good governance and NGO management
Elements of an effective governance framework
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Board
Structure &
Composition
Strategy,
Planning and
Monitoring
Board
Operation and
Effectiveness
Robust Risk
Management
& Compliance
Processes
Transparency
and Disclosure
I IV V III II
Citizenship
(Social, Ethics,
Environment)
VI
PwC
Group discussion
What are the most common NGO challenges in these six categories?
Which issues / questions do donors raise the most?
What types of issues / questions do donors raise across these
categories?
How do you respond when these are raised?
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Board
Structure &
Composition
Strategy,
Planning and
Monitoring
Board
Operation and
Effectiveness
Robust Risk
Management
& Compliance
Processes
Transparency
and Disclosure
Citizenship
(Social, Ethics,
Environment)
PwC
Good governance and NGO management
Practical measures to demonstrate better governance
Based on the size and revenue of organisations represented today, the following are
some key areas of good governance which may be most relevant:
Internal control system establish a formal set of internal control policies
and procedures to ensure proper management oversight and accountability of key
business activities
Key business functions formally establish key business functions, such as
Human Resource Management, with roles and responsibilities clearly defined
Establishing a board clearly defined roles, appropriate board diversity,
awareness of potential conflicts of interest etc.
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Good governance and NGO management
Practical measures to demonstrate better governance
Segregation and accountability key incompatible financial and accounting
functions need to be properly segregated and monitored to mitigate the risk of
unauthorised and improper monetary activities
Acceptance of funds - formalise fund acceptance policy and procedures, such
as evaluation of donors and their source and conditions of the funds, if not
established, can raise financial and reputational risk
Distribution of funds - funds may not be utilised or distributed in compliance
with the donors agreement and regulatory requirements
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Good governance and NGO management
No one size fits all model
and implementing good governance and management processes takes time!
Consider the size, age, purpose, funding model and future growth plans of the
organisation first
Which aspects of good governance are critical now, and which will become
important in three years time?
Identify skills, resources and people needed to effectively implement new or
changed governance and management processes / systems
Plan and coordinate any changes within appropriate timeframes a practical
timetable for phasing in new practices is better than hasty reaction
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Good governance and NGO management
Governance roadmap
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Aim to achieve objectives at your desired pace. According to the Organisation for Economic
Cooperation and Development (OECD) guidance, there are four levels of corporate governance
maturity as defined below:
Level 1:
Acceptable
Governance
Practices
Level 2:
Extra Steps to
Ensure Good
Governance
Level3: Major
Contribution to
improving
governance
nationally
Level 4:
Leadership
Governance development is a journey and the desired level of maturity will vary across
organisations which may be driven by factors such as culture and operations needs. The board
should reach a consensus over the desired level of maturity, in light of respective levels
benefits as well as cost.
PwC
Closing remarks
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Thank You
This content is for general information purposes only, and should not be used as a substitute
for consultation with professional advisors.
2013 PricewaterhouseCoopers. All rights reserved. PwC refers to the China or Hong Kong
member firm, and may sometimes refer to the PwC network. Each member firm is a separate
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Please feel free to contact us if you would like further information.
Eric Yeung
eric.ck.yeung@hk.pwc.com
+ 852 2289 8888