Feature articles.

Governance and Ethics Take Centre Stage

Governance and ethics have been buzzwords in the sector for years. Now with several high profile corporate and charitable scandals in the US and heated debate about corporate governance in Canada, charities and non-profits are taking stock to determine if they measure up.

Enhancing board performance has become a greater priority at Canadian charities

Overcoming Barriers
The Institute on Governance, a nonprofit organization that helps Canadian organizations govern more effectively, has identified fundamental barriers to improving board performance in the nonprofit sector including insufficient time, resources, and expertise as well as too many immediate operational pressures. Notwithstanding these barriers, the Institute has identified simple steps that can be taken to ensure that the board has the experienced leadership, skills and resources required to fulfill its role in shaping the mission and direction of the organization. Chief among these are:

Clearly defined roles for the board and CEO.
Knowing who your stakeholders are and what roles they play for the organization.
Ensuring full and transparent accountability to those who select the board, fund the organization and other stakeholders.
Scrutinizing financial statements thoroughly and having a clear understanding of your non-profit's current financial realities, past trends and future projections.
Recruiting board members who are interested in governance as well as committed to the organizational mission.

Following these steps is only part of governing well. Many of these undertakings come down to appropriate communications. "Communication in the area of governance is critical," Tennys Hanson, President & Chief Executive Officer, Toronto General & Western Hospital Foundation said. "It's not sufficient simply to be doing something - you must take the time to communicate with people about the fact that you've done it."

Making Codes Effective
Hand in hand with improved governance practice, ethical behaviour is coming under closer scrutiny. Accountability and transparency have long been embedded in the culture of charities in Canada, driven by the certain knowledge that such practices are critical to maintaining the trust of donors. Guy Mallabone, Vice President, External at SAIT, notes "Fundraisers and their professional organizations have shown leadership in introducing codes of ethics, the Donor Bill of Rights, and other tools for demonstrating the high ethical standards of our profession." More than simply having codes in place, an increasing number of Canadian organizations are considering how to ensure they are embedded in the daily life of the organization. The Institute on Business Ethics, a U.K. organization, suggests a number of ways to make a code of ethics effective, including:

Rooting the code in core ethical values
Ensuring staff 'walk the talk'
Making the code a living document by sharing it with partners
Providing training to staff in its application.

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