Should third sector leaders be non-executive directors?

It's crazy time here at SSE….having recruited two new staff in three new regional SSEs, we're now mid-recruitment of three posts at SSE-UK here in East London. And we have been rewarded with our largest pile of CVs ever……

Whilst thinking about recruitment, I thought I'd draw attention to a different area of recruitment that has a broad relevance to the third sector. As many have pointed out, the failure of our financial institutions is also a failure of corporate governance which is, in turn, a failure of non-executive directors (NEDs). David Walker's recent report on corporate governance acknowledges this, and suggests doubling the number of days that NEDs contribute to a company per year.

This does seem an inadequate response, though. As The World of GingerbreadGirl points out:

"if you use the same people you will have the same answers, the same
approaches, and the same problems – whether or not you cut their pay,
double their pay, cut their days, or double them. If you always do what
you have always done, you will always get what you always got.

She suggests that every board should have to have one NED that has never been an NED before…in order to cut down on the cronyism, (old boy) networks and lack of variety that has affected the ability of non-execs to perform their role over the last few years. Matthew Cain follows on from this with some sensible questions that should form a basic check on whether a person can be an NED who will bring value to the corporate governance process. And points out that NEDs aren't a panacea to this problem, which is surely right.

But that doesn't mean it shouldn't be addressed.

So how does this relate to "our" world? Well, firstly because the same applies to charitable boards: as Eleanor at NPC points out in her post (with the does-what-it-says-on-the-tin title of Networks aren't the answer for boards: get some fresh blood for a change),

"Trustee boards in the charity sector in the UK face remarkably similar
problems. Most (around 80%) recruit new board members from their
networks. 'Word of mouth' is great for getting people who you know and
trust, but it means that you are looking in a very small pool of people"

This is surely true. We work hard with SSE students (and Fellows) to think hard about different types of governance structure, and about the make-up of their boards (if they have them). And that challenge of being aligned to the mission, but not too close to it; of being trusted, but not uncritical; of being a good mix of skills, but also a good team… etc

Secondly, and to return to GingerbreadGirls' original point about widening the pool of talent, surely there are people from the charity and social enterprise sectors who would add credibility, acuity, insight and experience to some corporate boards? This is something we've been looking at on the Social Enterprise Ambassadors programme and was called for at an event the other evening by leading charity lawyer Stephen Lloyd, who was reported as saying:

"that at least one non-executive director of all quoted
companies should have extensive experience of the social/voluntary
sector to add a new perspective to board discussions

Again, getting leading charity or social enterprise directors as non-exec directors is by no means a panacea, but it would surely bring a fresh pair of (credible) eyes to the table, combined with experience of running a significant organisation. And would also foster better understanding in both sectors about the differing demands and natures of each.

[Writing this post as part of Bloggers' Circle, an initiative to share posts cross-blog and get interesting posts more widely-read.]

Share Button

Wednesday round-up: divide, diffusion, diversity… and DBERR

Innocent A quick round-up of posts, links, tweets (oh yes) and information, before heading up to Leeds this morning.

– First up, SSE Chair Charlotte Young has been awarded the Queen's Award for Enterprise Promotion for 2009. Charlotte has been involved in SSE since its inception, helping design the original make-up of the programme that has lasted till this day. Congratulations from all here.

– And, to further get the SSE news out the way, SSE is the lead partner in a social entrepreneurship consortium that has been awarded £500k from the Department of Communities and Local Government's Empowerment Fund over the next three years. Other partners involved in the delivery are CAN, Changemakers, Training for Life and UnLtd, with Ashoka UK as advisory partner. All power to the network mindset…and congratulations also to Social Firms, Bassac, Operation Black Vote, Urban Forum and the Young Foundation

– The social enterprise summit announced at Voice 09, between Peter Mandelson (of DBERR) and Liam Byrne (of Cabinet Office) and assorted social enterprise luminaries, is happening on May 12th, with four regional roadshows beforehand for people/organisations to feed into; here's to concrete outcomes!

– Other aspects of the OTS Recession Action Plan are coming to fruition also; the Modernisation Fund website is now up and running for interested orgs (in partnership / merger / collaboration): check it out here

– Third Sector reports on the ongoing divide between Liam Black and Jonathan Bland / Social Enterprise Coalition. Interesting article and interesting quotes from other commentators also, which summarise many of the debates in this field in microcosm; SSE naturally sits on the, to quote Matthew Thomson, "social enterprise is a state of mind, not a legal form" side of things, but welcome the (public) debate

– Business Week agrees with Liam, anyway; it's selected some leading US social entrepreneurs, and every one of them has a for-profit structure….some great organisations here, regardless of your viewpoint

– I met Margaret Moran MP yesterday, who chairs the All Party Parliamentary Group on social enterprise, and we discussed the need for diversity in the movement; see this article in the Times, Race to diversify social enterprise, for more

– Some good conversations about scale and replication been happening on a couple of US blogs. Nat Whittemore has an excellent round-up: Scale vs. Diffusion redux

What return do philanthropists look for in a recession

– Nice interview with social enterprise ambassador Tim Campbell in the FT

– It had to happen….Twitter goes mainstream: should your non-profit jump on board? (though there is something a little stalkerish still about "x is now following you" appearing in your inbox….)

– The financial crisis is killing philanthropy in Ireland, apparently….with some notable exceptions

– Great post on the inequalities of internship by Jamie Veitch at New Start

– And finally, along the line of stories that say "ethical businesses sell out to scale up" (cf Body Shop, Green & Blacks, Ben & Jerrys), Innocent smoothies have sold a stake to Coca-Cola; read the founders' letter here; it was interesting to read on Rob Greenland's blog that one of them had recently said that, as Rob reports, "they're more innocent-like than they've ever been –
because they now have to work hard at making the values mean something.
 When they were small, it just happened.  Now they have to work at it."
Which is an excellent point, I think; presumably that working hard just got a whole lot harder as well (check the 348 comments to date on this post). Although their transparency / response is still impressive (see Innocent Investment video Q + A).

Share Button

Tuesday round-up: Shirky, Scotland, Shoreditch

Much linkage to get involved with this morning….a bit of a mish-mash, but hopefully of some use:

Voice 2009 will be in Birmingham; for the flagship social enterprise event, another big venue: the Birmingham ICC. See picture left (CEOs of SEC and Advantage West Mids)

– Couple of interesting pieces about fairtrade (coffee) and online debates; see Ugandan coffee trade and Fairer than Fairtrade

Campbell Robb on the third sector and public service delivery in the Times, on removing the barrier to allow third sector orgs to deliver etc.

– Less enthusiastically, a piece in today’s Times Public Agenda discusses how devolution is still an ideal, not a practical reality, something which chimes with SSE Fellows’ experiences of local authorities (though it is a varied and patchy picture)

– What is citizen philanthropy? Perhaps not a question that’s keeping you awake at night, but this article is an interesting read: This Is What Philanthropy Looks Like

Matt Stevenson-Dodd posts on his fellow Ambassador Daniel Heery’s great work in Cumbria

Scottish social enterprise support is "fragmented, complex, uneven and inconsistent"; apart from that, all is well. More seriously, the report is worth reading, particularly in its call for support providers to talk to each other and work in a more joined-up (hate that phrase) manner. Lessons for England as well as Scotland, methinks.

– Clay Shirky is author of Here Comes Everybody, which is about ‘organising without organisations’: groups, networks and the effects of new technology. "Group action just got easier" is his five word thesis. Anyway, he spoke at Demos the other day, and you can download the hour-long podcast to listen in….

– Bilumi: stands for Buy It Like You Mean It, "an online community of people reviewing and rating the socially
responsible business practices of companies and their supply chains"; interesting Shirky-esque stuff

– The Shoreditch Grand Prix involves kids bicycles, leg-power, and fundraising for social entrepreneurs

– Finally, while I mostly turn to Bubb’s Blog for a smile in the morning (I will be picking out an appropriate tie and bottle of wine for my next meeting at ACEVO), Jeff Trexler’s reaction to the SEC video of social enterprise is pretty entertaining.

Share Button

Philanthrocapitalism and new clothes

One of the frustrations of recent events I’ve attended has been the common assumption that what comes from business into the social sector must be "better": venture philanthropy will revolutionise philanthropy, coherent investment-style metrics will revolutionise social impact, risk investment, social stock exchanges and loan funds will provide liquidity for the sector, and social enterprises will scale up in order to meet the challenges they face. Etc.

As regular readers of this blog will know, SSE‘s view of social entrepreneurship is an inclusive, broad-based one, not one that insists that social entrepreneurs must "have large-scale impact" to warrant the label, nor one that insists that social entrepreneurs must "earn income and trade", nor one that thinks impact is only delivered by an organisation’s services, and not also through its operations in the round. For us, at its simplest level, social entrepreneurship is about entrepreneurial individuals applying themselves for social / public benefit rather than solely personal gain.

Further to this, the sector an organisation comes from, its legal structure, or its financing is not a guarantee of efficiency, quality, greater impact, excellence or even, in some cases, competence. Measurement in this sector is more difficult, intangible, and (at times) nebulous than the financial bottom line. Venture philanthropists have a more sensitive, complex role than venture capitalists….and so on. In reality, there should be knowledge transfer and learning between sectors (and always has been); indeed, the action learning process that underpins the SSE programme was originally pioneered in large companies for senior management. And, when ‘business-like’ is equated with more professional or making best use of its money (and people), then no-one has an issue with that either…

But, currently, it has felt rather one way (though I wouldn’t wish to generalise: there are those who have a much more nuanced understanding all along the spectrum): and focusing more on business practice in the social sector, rather than achieving greater social equity and transformation. Hence my welcome for Paul Farmer’s remarks at the Skoll event recently. And hence also my interest in this new book by Michael Edwards: Just Another Emperor? The myths and realities of philanthropcapitalism. It looks at the application of business practices to the social sector / philanthropy in great detail and, as far as I’ve read, speaks much sense, as well as provoking debate. I won’t go on too much more, but would recommend starting with the transcript from the launch downloadable here, and I’ll end this rather long post with a short quote from that which gives you a flavour of the argument:

"[Another] area where philanthrocapitalism claims to make an impact is in
improving the financial and the management capacities of civil society organisations.
However, I’ve always been confused by the way venture philanthropists and social
entrepreneurs differentiate themselves from the rest of civil society on the grounds
that they are “results based” or “high performance”, implying that everyone else is
uninterested in outcomes. Now sure, there are mediocre citizens groups, that’s true,
just as there are mediocre businesses, mediocre venture philanthropists, mediocre
social entrepreneurs and mediocre government departments. So why import the
practices of mediocrity into the social sectors, is Jim Collin’s conclusion, of Good to
Great fame.

What separates good and bad performance has very little to do with
business thinking or involvement in the market. What separates them is whether
they have a clear focus to their work, strong learning and accountability mechanisms
that keep them heading in the right direction and the ability to motivate their staff, or
volunteers, to reach the highest collective levels of performance. There’s no evidence
I know of which proves that business thinking, or business experience, can generate
those advances more effectively than experience in other sectors."


Share Button

Friday round-up: audio, aggregation, and alltop

It’s been a while since the last round-up, and lots to link to and write up.

– Will write more about this shortly, but the Ambassadors have started to blog….and there is an uber-feed you can sign up to for all of them combined ( Early days, but starting to happen….

– Details of the next Social Enterprise Research Conference announced

– Free audio file from Stanford Social Innovation Review from their Social Entrepreneurship Day, which I shall be listening to on the way home…

– Podnosh has an interesting post on "Why should leaders blog?"; check comments also…

SSE graduation in London on March 14th (a week today); if you haven’t got an invite, and think you should have, then get in touch.

US article about entrepreneurship and social change (in the Tennessean, no less)

– Updated research from CAF on Social Enterprise in Practice; haven’t had a chance to read, but looks very interesting both on the challenges to the sector (quote from PR: "Social enterprises are unlikely to achieve financial sustainability and it is unreasonable to expect them to do so") and on what is needed in terms of measurement and support. Will follow up on this……

– Sally Reynolds is held in high esteem in the sector for her work leading Social Firms UK, and they continue to take an approach focused on quality and delivery; new trade directory of social firms is now online, and their Star Social Firm quality mark is also taking hold. Interesting to hear her discuss the other day how they could develop quality standards for social firms because they are more tightly defined / structured (see definition of What is a social firm?) than the diverse and varied spectrum of social enterprise.

– Related to that spectrum-like nature, NCVO are "unhappy with the government definition of social enterprise", according to this Guardian article on their new ‘civil society’ approach. I do hope we’re not entering a period of definition debate………

Social Enterprise Magazine has relaunched (more developments on website to follow), and, IMHO, looks a country mile better in design, focus and content. Massive congratulations to all involved in making it happen and promoting it so effectively: Tim, Claudia, Deniz and the team. Look forward to encouraging our students and Fellows to read and get engaged with it….

Greed offsetting. Really?

– Interesting Business Week article on the profits (social and financial) of CSR

– And finally, for all your non-profit blog needs, here’s; single page aggregation is the future?

Have a great weekend, one and all….

Share Button