Irish Corporate Governance Irish Development Ngos Notes Essay

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Irish Corporate Governance

"Irish Development NGOs," notes a 2008 associational guidebook from the Corporate Governance Association of Ireland (CGAI), "exist to create a better world. They operate on a global scale with diverse missions, but are united by a shared commitment to social justice and the eradication of poverty" (CGAI, Irish Development NGOs).

But as noble as these intentions are, they are coming up short in their missions because they do not have in place the kinds of effective and efficient types of governance expectations needed to ensure that they are being profitable in their own success. Many NGOs, just like many for-profit businesses, are struggling with extraordinary financial challenges. And they are finding out that just as they need to learn to be more effective in their operations, they have few guidelines in place for improving the services they provide and for professional conduct in general (CGAI, Irish Development NGOs; CGAI, Professional Conduct).

New corporate governance ideas have recently started to come together in Ireland for the specific purposes of showing how these standards can translate into direct service and mission improvements, just as similar ideas have helped for-profit businesses become more efficient. Together, these types of enhancements generally seek to help willing organizations become more transparent in their decision-making processes and, as a result, become better at proving that their outcomes make a difference. As the CGAI for NGO says, achieving these types of refinements in the people and organizations the public trusts will enable us all to determine if they are "fit to serve" the grander missions we look to them to achieve (p10).

The financial challenges that Irish NGOs have been experiencing lately are bad enough that it is estimated that many may have to close in the near future. A survey conducted by The Wheel, a nonprofit hub that advocates for the interests of the country's 19,000 such programs, found that more than one third of their member organizations have been experiencing very real funding problems (Irish Examiner, 2011). Perhaps as many as 50% have already cut back on the services they provide, and many more are likely to have to do so in the future just as government austerity measures are starting to happen. By undertaking better governance measures, the best of these agencies that survive will become more secure in their futures.

Several Irish oversight agencies and private sector groups have started to address the concern of what it means to have better, more cooperative governance. As such, there are different types of examples of what this concept might mean in practice. In general, however, most of these efforts base their ideas on the common expectations noted first in the UK's Nolan Principals. These ideals assume that organizations function best for their public purposes when they are characterized by selflessness, integrity, objectivity, accountability, openness, honesty and representative leadership (NHS, 2008). It has gained wide acceptance that in living up to these expectations through top down compliance, enables organizations to assure their stakeholders that they are doing their jobs.

In 2006, a London-based national oversight group put this idea into operational perspective this way: "Good governance, leads to good management, good performance, good stewardship of public money, good public engagement and, ultimately, good outcomes" (OPM/CIPFA, 2006). Irish support agencies that have undertaken their own initiatives have put the same perspective into place with numerous articles and voluntary guidelines for NGOs. Their standards offer various levels of recommendations and, being pragmatic, offer suggest differing levels for compliance. The CGAI premises their expectations on they call "comply or explain" tactics. Implementing efficiency changes is always difficult when organizations are strapped for resources. As such, it may sometimes be best to do what can be done and then to openly face those issues that cannot. But at the least it can be expected that specific directions be detailed about how the organization will move from where it is to where it want to be. Doing so clears the path so that others can see what is coming and make their own judgment about whether the organization can achieve the changes it needs to make.

If properly implemented, good or better corporate governance suggestions have been tied to a number of specific outcome benefits. Most of these center on administrative and management tasks and terms, though some seek to address larger social and even ethical concerns. For example, the case is often made that implementing these kinds of recommendations directly minimize organizational risks, bring about more controlled managed, generate cost reductions, and even impact insurance rates. And there is nearly across the board agreement that they will help broaden the appeal of funding opportunities.

The Wheel (A New Framework for Partnership), for example, notes within the substantive pages of its website how it believes these types of practices can benefit many agencies. It outlines a new type of statutory funding potential that can ensure:

community and voluntary sector service-providers recover the full cost of the services they provide -- while being provided with multi-annual funding (so they can plan ahead);

service level agreements and grants make provision for organisations to make pension contributions where appropriate;

standardisation is achieved to the greatest extent possible in all paperwork associated with service level agreements / grants, activity and financial reporting, monitoring and evaluation reports and other similar reporting requirements.

How an organization gets to the point of making all these changes in practice is not always so clear. Still, the movement in general recognizes the importance of at least getting started. The CGAI governance report recommends first looking at the size of an organization to determine where it might begin. They note that it may be the case that smaller NGOs might direct their attention first to "getting the basic things in place" to ensure who in the organization is doing what and that they are working best toward a common sense of togetherness. For larger organization, the need might be more about demonstrating what they can and are already doing and how their efforts lead to program equality, donor accountability, stakeholder confidence and board directions for further improvements.

Two other interesting examples of putting these ideas into practice can also be seen through the efforts of Youth Work Ireland, one of the country's premiere youth empowerment agencies. One of their efforts is more internally focused and the other more externally focused for the needs of other agencies and the importance of a stronger financial basis.

In December 2011, Youth Work Ireland will be hosting a one-day conference workshop that focuses on the true impact potential of what they do and how their programs can do their work better (Planning and Measurement). The session is scheduled to specifically address what outcome-based results are about and how they can be used in various youth settings. They note how important it is to have appropriate directions in moving toward success in order to ensure that accurate measurements can be made. This singular event, important in its own regard, is even more critical however in that it is part of a larger initiative the agency is undertaking to, as they put it in their Annual Report, "claim the space" of young people by implementing an integrated empowerment infrastructure. The organization knows that it needs to interact more effectively with policy makers, and having the facts about impact matters. This internal refinement work will bring about success on both levels.

A specific funding effort of interest to youth organizations has also been noted. Its interest is in bringing about getter governance of the country's distribution of lottery funds. In a press release issued in November 2011, Youth Work Ireland (Press Release) took the lead by stating that "voluntary and community bodies need to be involved in key lottery decisions." They argue that, no matter its good intentions, the funds of the lottery were designed to help many agencies that could not get funding from other public sources. Recent grants and directions suggest that this is not happening because some organizations are benefiting disproportionately. By changing who has a voice in the process, how open the process is, etc., it may be possible for this important resource to regain its footing and be better able to help other organization that might otherwise be lost.

It needs to be reinforced that all of these efforts in generating better corporate governance are not just about operational efficiency. They seek to make the attainment of larger missions more feasible. If the organizations work better they do their missions better and people achieve more justice, find ways to get help, perhaps even work their way out of poverty and toward the social justice that many organizations envision.

In a similar light, better governance is at its heart about global ethics. A Bridge Paper on the topic of Developing Ethical Leadership was recently prepared by the Institute for Corporate Ethics (Freeman, 2006). Though not specific to Ireland, it provides an overview of what an ethical organization in today's worldly market might…

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