Should third sector leaders be non-executive directors?

Posted on July 21, 2009 by sse

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.]

Social media for social impact (for social entrepreneurs)

Posted on July 7, 2009 by sse

A new handbook was released yesterday called Social By Social which is a great and practical guide to using new technologies to deliver social impact. I'd thoroughly recommend having a look at the book online, or ordering a copy for you own use. Check out especially the Pioneers section, which includes two SSE Fellows, Nathalie McDermott (SavvyChavvy) and Paul Hodgkin (Patient Opinion), and the essential tools, resources, and what this means for you sections. Congratulations to all involved, especially SSE Fellow Andy Gibson and supporter David Wilcox: I think it's a great and useful resource.

In the latter, I've written the "what this means for social entrepreneurs" section. I've posted this before, but thought I would re-post again to celebrate the launch, to celebrate its use of a creative commons license, and for the various new followers / subscribers of late. Enjoy….all thoughts + links + comments most welcome.

Social media for social entrepreneurs

"While entrepreneurs in the business sector identify untapped commercial markets, and gather together the resources to break into those markets for profit, social entrepreneurs use the same skills to different effect. For social entrepreneurs, untapped markets are people or communities in need, who haven't been reached by other initiatives. But while they may read from a different (triple) bottom line, social and business entrepreneurs have a lot in common. They build something out of nothing. They are ambitious to achieve. They marshal resources to meet their needs. They are constantly creative. And they are not afraid to make mistakes.

The marshalling of resources is particularly important in this context, as start-up and fledgling social entrepreneurs often have little spare money (or money at all) for key parts of their work, namely marketing, promotions, communications, fundraising, events organisation, and community-outreach. This is where the development of web 2.0-type tools is playing such a significant role; where two or three years ago, we would get the question “do you know someone cheap who designs good websites?”, the questions now tend to be “what’s a blog and how do I start one?” or “should I pay for this or is the free version OK?”. The costs of podcasting, blogging, uploading video, starting an online network, promoting your project on Facebook or specialised networks like UnLtdWorld, fundraising online etc have fallen so far as to completely democratise it: for social entrepreneurs now, the big question is no longer “what can we afford?” but “what should we use?” and “how do you use it best?” In some cases, SSE Fellows (like Nathalie McDermott of OnRoadMedia or Jude Habib of SoundDelivery) take this a step further and make it their mission to empower communities / other organisations to speak up or better achieve using new tech.

Our message to them is a simple one: work out what you want to achieve and then work out whether technology can play a part in helping do it. It can be all too tempting amidst a rash of “twitter is the cure to all ills” headlines to leap in, waste time and lose focus. But if building a community of like-minded people who support and engage with their idea is important to moving it forward (and those people can be found online), then fire away using Facebook groups, twitter, blogs and whatever is most appropriate. Such tools are often a cost-effective means to an important end: building a following around an idea or a new enterprise. Tools such as blogs and twitter also allow for a more direct form of communication that, when done with consistency and authenticity, will better engage and inform that following. That builds trust, credibility and loyalty to an organisation in the medium to long term.

What is particularly interesting for social entrepreneurs in this space is that tools like Twitter and Facebook have blurred the line between the personal and the organisational, between the life and the work. But this is already the case for social entrepreneurs in many cases, so fits naturally with the way they are and the way they operate. Alongside the fact that networking is key to their success (particularly when they can feel isolated and disillusioned on their journey), it’s clear why such tools can be not only useful organisationally (for communications, community-building etc) but also individually (to make contacts, build relationships, find support, bookmark sites of interest etc).

However, whilst not wishing to end in Luddite fashion, it’s important that we also remember that many social entrepreneurs work in real, geographical communities that can’t be reached online; that e-mail remains the primary communication tool for the vast majority; that ‘slacktivism’ will tend to reinforce the idea that people can solve problems with a click of a mouse (and keep a healthy distance from all that nasty poverty and disadvantage); that online approaches need to be measured for their social impact if resources are put into them that could go elsewhere; that Facebook status updates aren’t a substitute for meeting people face-to-face; and that doing things is more important than talking about doing things.

Ultimately, social media tools provide amazing opportunities and resources to facilitate change, to network effectively, to communicate directly, to fundraise innovatively, and to build communities swiftly. But in all but a very small minority of cases for social entrepreneurs, they are means to an end, not the end in themselves."

Consumerism gone mad

Posted on July 6, 2009 by sse

Recently, after coming back to SSE as an intern for a few months (info at the bottom), I came across The Story of Stuff, a 20 minute web documentary hosted by "American critic of excessive consumerism" Annie Leonard. In the video Leonard goes through the process of consumption in five steps from extraction, production, distribution, consumption and then disposal. Though the video at times seems meant for younger age groups, perhaps a straightforward approach is what we all need; mixed in between the jaw dropping statistics Annie's message is clear and obvious: ever-growing consumption has become a dangerous force in human society.

As Leonard explains, this didn't just happen. In the 1955, economist Victor Lebow prophesied a version similar to our contemporary environment: "Our enormously productive economy … demands that we make consumption
our way of life, that we convert the buying and use of goods into
rituals, that we seek our spiritual satisfaction, our ego satisfaction,
in consumption…. we need things consumed, burned up, replaced, and
discarded at an ever-accelerating rate."

What does this have to do with social entrepreneurship and our current financial environment?
As Leonard amply points out, environmentalism affects us all, in all sectors. It is a timely reminder that while 'going green' has become a fad of its own, there is still much to be done. Here SSE Fellows like Becky Barrett at Love Eco and Dave Miller at Bikeworks play crucial roles. That being said, they are continuously dependent on you, the consumer, to purchase products strategically. It is no longer about finding the cheapest price, but rather the locally produced, environmentally friendly, and sustainable product.

That's easier said than done, particularly with the economy down the tank. Thus, we must not only buy smart, but also defy Victor Lebow and his theory of an ever-accelerating rate. Here is where the economic crisis may help us all, by forcibly slowing down our rate of purchasing. However, as we have seen such a change will lead to a slow-down in production, higher unemployment, higher prices. So what do we do? Leonard is brilliant in her analysis, but not so much in her aim. Next time I would like to see a video where she debates and convinces a parent who is fighting to keep his or her job, to shop more sustainably. Until then I won't hold my breath for a new type of consumerism.

Thor Steinhovden currently interns with the School for Social Entrepreneurs in Bethnal Green, London. He recently finished a BA in Political Science and History at St. Olaf College in Minnesota. This fall he will embark on a MSc in Comparative Politics (Nationalism and Ethnicity) at the London School of Economics.

The transparency of social entrepreneurship

Posted on June 30, 2009 by sse

A little while back, I blogged about why the (increasingly tedious) political expenses scandal in the UK was relevant to the realm of social entrepreneurship [see What the expenses scandal means for social entrepreneurs]. My point, largely, was about the importance of trust and legitimacy to the work of social entrepreneurs, and the associated importance of honesty and transparency to achieving and maintaining that trust.

I think the same applies to the agencies operating in the sector to support social entrepreneurs and social enterprises as well, though. If we spin, overegg, over-heroicise and overplay the success of the people we work with, there is a risk of not giving the full picture. Particularly when, particularly in the start-up space, success can look very different for different people. Indeed, my stock answer when we are asked the question "What is success for SSE?" is to say exactly that: success looks different for different people coming through the programme. For some, the journey is primarily a personal one in which, it could be argued, the project or organisation forms a vehicle for learning and development; for others, the organisation flies and grows; still more thrive in the months immediately following the programme, whilst others find new employment or civic roles they wouldn't have accessed before.

[Or as NEF put it in their evaluation of our work, “For some, the SSE acts as a [place for] fine-tuning, giving them the
ability to move forward with their project in a variety of ways and to
create a greater impact than they would have otherwise. For others, the
SSE is nothing less than the difference between existence and
non-existence of their organisation and profound change within their
own lives"]

But we have to be open that there are myriad and multiple outcomes, few of which can be "guaranteed" for each social entrepreneur. Not all create jobs and not all establish organisations, and some decide, ultimately, that this world is not for them. Others find they prefer to use their new skills + networks to work in (more secure) employment. Others fall out of contact or self-select out of being communicated with about where they are at. And the more honest and open we are about those in our communications and measurement work, the more people will trust the positives and successes we also talk about. That needs to be done sensitively, of course, but it's crucial to not set unrealistic expectations with the students, our funders and supporters and, indeed, ourselves. That's something I'm emphasising as we look forward to forthcoming research and evaluation projects.

We can get better at this, no doubt, and so can others. I attended a social entrepreneurship seminar at London Business School the other evening, hosted by Professor Michael Hay, and organised by Teach First for their ambassadors (I got a few SSE students a free place). It was an interesting case study, in the MBA style, of a South African organisation called CIDA, which I remembered from the Skoll Awards a few years back. Professor Hay was involved personally in the organisation, and (what turned out to be) the turnaround of it, so had great knowledge and insight of what had happened.

I think, largely, he doesn't want all the details spread around / broadcast widely and I want to honour that, but suffice to say that the original founder of CIDA is no longer with the organisation, and is now running the Maharishi Invincibility School of Management, and that the new board / executive team of CIDA has now developed personal development programmes for students that don't relate to transcendental meditation, consciousness-based education ™ and so on. Draw your own conclusions etc…

What surprised me is that I hadn't heard about this at all. Whilst acknowledging that this is a very high profile initiative (particularly in South Africa), there is an enormous amount of learning to be had frmo this example. Ironically, enough, transparency is a massive part of it (it wasn't clear what lay behind / what the ultimate motivations were), as is a blurring of the social entrepreneur with the organisation. The people present the other evening felt that this was forgivable in the early stages (when the social entrepreneur, after all, pretty much is the organisation), but that there needed to be proper governance, management processes, structures for stakeholder involvement etc when the organisation grew. Perhaps there are reasons why the full story can't be openly shared (I don't know), but the learning for the sector could be significant.

What a great session this would make at an event or conference, from one of the funders or support agencies who backed CIDA in its previous incarnation. It's now back on the rails on its original mission and is set, by all accounts, to continue to thrive….but would be fascinating to hear about a 'failure', be that a failure of due diligence, of governance, of blurring of individual with organisation, or of something different. After all, there's entrepreneurship in social entrepreneurship, so there's risk…and it's about being risk-aware, not risk-averse. But that awareness only comes from a willingness to be open and share examples, not through a head-in-the-sand approach.

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