GGA speech 18 October 2016
Welcome everyone and I am delighted that you have been able to join us here at the inaugural Good Governance Awards event.
Corporate governance and good governance are such hot topics in today’s environment. However, there is a danger when a topic becomes fashionable, it can get overused and its essence gets lost. But when we strip it down to its core, we can see its criticality and its importance. Good governance is about doing the right thing in the right way. Who can be against good governance? Who can be tolerant of bad governance?
For me, I probably first became aware and conscious of the need for frameworks of good governance back in the late 1980s and early 90s when the UK had some major scandals. Who remembers the Polly Peck and the Robert Maxwell scandals, the Cadbury Report which led to the Cadbury Governance Code? Those events triggered a debate and a greater awareness of corporate governance in the UK. It took a few more years for the debate to gain some traction in Ireland and it was in the mid-90s that governance here became a hot topic.
There have been spectacular failures of governance globally and locally affecting all sectors. Every decade seems throws up its lists of eye watering, heart breaking and devastating exposures of bad governance and unethical behaviour.
When a spotlight has been beamed into so many aspects of Irish life, looking at how we did things in the past and how for years and decades we had ignored that bad things were happening, turned a blind eye, covered it up, denied, refused to accept and dismissed those who raised concerns. It is so shocking and almost unbelievable.
We now look back in horror at how we as a State and as a society treated the disadvantaged and vulnerable, our children, the women of Ireland, those suffering from mental health problems and so many other segments of society. Last week, I listened to a podcast which was marking the 20th anniversary of the late Mary Raftery’s article in the Irish Times about our industrial schools which was published on the 10th of October 1996. That article and the subsequent TV documentary “States of Fear” chilled us to the bone and opened the floodgates on a whole range of abuses and shameful practices. It was a painful but necessary cleansing experience for Irish society. But it only has long-term benefits, if we learn from the revelations, stamp out bad and corrupt practices and put new and effective standards and mechanisms for accountability and oversight in place. That is what we also have to do when incidences of bad governance and unacceptable practices come to light in our sector.
The required standards today for the delivery of services, for the protection of the young and vulnerable and how our public and charitable organisations are governed are much higher than they were 10 or 20 years ago, even 5 years ago. And that is a good thing. It is right and fitting. Who wants to go back to the days of the industrial schools, the Magdalene laundries, to when those with intellectual and physical disability were locked away and hidden from public view. To a time when those in power and in positions of trust were unaccountable and in many cases, able to abuse their power with immunity.
I was speaking recently to a CEO recently about the need for a strong and robust governance framework to be at the heart of every organisation and for that framework or code to underpinned and re-enforced by a strong and ethical organisational culture. He complained, as we CEOs often do, about the ever increasing compliance burden, about the growing reporting requirements and oversight mechanisms that need to be adhered to and about the fact that the goal posts keeping changing.
in recent years, there has been a whole raft of new legislation and regulatory bodies with increased powers. We have had the Charities Act of 2009, Children First: The National Guidance for the Protection and Welfare of Children ; The establishment of the Charity Regulatory Authority in 2014, The Protected Disclosure Act, the 2014 Companies Act, the Lobbying Act in 2015. We have new accounting standards, more rigorous contracting and accountability mechanisms introduced by funding agencies such as the HSE, Pobal, just to name a few examples.
What was regarded as good quality and acceptable five years ago is now seen as inadequate and insufficient. The focus for most boards and managements has been on meeting the minimal requirements. What do I need to do or report that will keep them happy so we can get on with doing the real work of the organisation.
I too was that soldier. I have to confess that in my earlier years of being a CEO, that my attitude towards the production of the annual accounts and directors report was largely dominated by what was a tolerable amount of information that needed to be disclosed to satisfy our statutory funders. I was convinced, that our annual report would not be read by our regulators, funders and other stakeholders, so there was not much point in going to the cost and effort of producing a truly informative and accountable annual report. I believed that it was not in the best interests of the organisation to give a public airing to the challenges and risks we faced as an organisation. These were matters that were best kept between the board and the management team and on a need to know basis to regulators or funders when asked. What we put in our annual report was accurate and met the specified reporting requirements that prevailed. But it was not the whole story. It was minimalist, boiler plate and boring. I now know that I was wrong, so wrong and hopefully, I have learned the error of my ways.
If we fail to recognise, learn and improve when we see examples of bad governance in other sectors and in other organisations, we are doomed to repeat those failures in our own organisations. There was a time when we were a bit complacent and even perish the thought, a bit smug in the non-profit sector when we saw dreadful breaches of trust, abuse of power and bad governance in other sectors. In the church, the medical profession, the legal profession, banks, in state organisations and in government administration. We felt that we are different and that our motivations and actions were nobly inspired and for public benefit. But we were to find out very painfully that we were no different than any other sector. That we too have had and will continue to have our own list of heart breaking and devastating exposures of bad governance and unethical behaviour that do enormous damage to the trust and reputation of the sector.
However, thankfully, there are many in the sector who recognise and believe in the importance and benefits of good governance. There are organisations in the sector who have as key objectives, the promotion and support for good governance practice in the community, voluntary and charity sector. 2012 saw the launch of the Governance Code, which was the culmination of three years’ work and consultation by 8 sector umbrella bodies with support from interested parties. They saw the necessity for a code of governance practice specifically designed for the sector and by the sector. Since 2012, the Governance Code Working Group have been working on the promotion of the Code to the sector and encouraging organisations to comply with the Code. As to be expected, we have had our enthusiasts and early adopters. Over 300 organisations have declared that they are in compliance with the Code and almost 1,000 other organisations have stated that they are committed and are on the journey to achieve compliance with the Code. But there are 1,000s of other organisations in the sector who have yet to embrace and engage with the Code. That is a challenge.
The Code is based on 5 core principles, 15 sub principles and about 100 specific good governance practices. For a lot of organisations, this can seem very daunting. But those organisations that genuinely engage in the ethos and the practices of the Code, quickly see and gain the enormous practical and other benefits from them from complying with the Code. They are better run and managed. They have better controls and are more accountable to their stakeholders. They are better equipped to deliver on the missions and their strategic objectives and also better able to meet their reporting and accountability requirements from their regulators and funders. Yes, there is pain but an awful lot of gain as well.
Organisations like ourselves in the Carmichael Centre, the Wheel, Volunteer Ireland and the Charities Institute Ireland, provide a range of training, supports and guidance to help organisations to implement good governance practice. We collectively deliver governance training to 1,000s of board and staff members in the sector each year. There is growing interest and demand for governance training and other supports which is hugely encouraging and positive.
The Good Governance Awards is another initiative to recognise the many well governed organisations in the sector and those who are working hard and are committed to improving their governance. We also wanted raise awareness and showcase examples of good governance and encourage others to up their game and improve their standards of reporting and communication with their stakeholders. The Good Governance Awards recognise, support and encourage adherence to good governance practice by Community, Voluntary and Charitable organisations in Ireland. In the inaugural year, the Good Governance Awards seek to acknowledge, encourage and promote good governance practice in the area of Annual Reports. What organisations tell us in their Annual Reports matters. We want to encourage organisations to make better use their Annual Reports to demonstrate their adherence to good governance and in doing so, rebuild public confidence. By focusing on the information that organisations make available through their Annual Reports, these awards also strengthen the connection between good governance and accountability, reinforcing relationships with stakeholders and building relationships with the public, potential donors, volunteers and supporters.
What has been hugely encouraging and reassuring for me, has been the fantastic and positive reaction I have received and the support I have gotten when I first floated the idea that Carmichael Centre were planning to establish the Good Governance Awards for non-profit organisations in Ireland. I also got the “are you crazy” and “have you any idea of the amount of work involved in getting something like that off the ground” reaction as well. Perhaps I am a bit crazy and sometimes it is better not to fully aware of the scale of the project and its challenges, because we may be too cautious to take that step and do something new.
When I put the proposal to my board they positively endorsed the idea, seeing it as a contributor the achievement of one of our key strategic objectives of promoting good governance in the sector. When I floated the idea to Eamon O’Halloran in the Charity Regulator Authority and Ian Brady in Davy both were extremely positive and supportive of the concept. Very quickly I had a great team of partners and supporters who came on board, rolled up the sleeves and got stuck in to help get the Awards off the ground. It was the same story when I approached people and asked if they be willing to be judges for the awards. I found people to be very supportive and generous in giving of their time and expertise. Also in putting me in touch with others like the Leinster Society of Chartered Accountants who could help out and provide valuable advice and assistance.
People asked me how many entries do you think you will get. I said that this being the first year and with a limited run in to the event, that I would be very happy to get about 40 entries. We received 84 within the cut-off date and 4 late entries that we could not consider as they were received after the cut-off date. That in part was due to great work that Ken our marketing manager in Carmichael and our partners and supporters did in promoting the awards to the sector.
We are delighted with the response and the level of interest. We know that for some we are moving the goal posts by looking for a higher standard of annual report than is currently required. But that is what the awards are all about. Promoting and encouraging excellence and improving the standards of reporting and accountability in the sector.
We know that there are many issues that an organisation needs to address if it is to achieve excellence in governance and the annual report is but one component. We also acknowledge that an award for their Annual Report does not give organisations a clean bill of health in all aspects of governance. However, it is a good starting point and a useful indicator of good practice. In determining this year’s winners, our judges made their assessments based solely on the information presented in the Annual Report. We will soon be getting around to revealing the category winners. But before we do that, I would like say a specific thank you to the many people and organisations that have helped make the Awards such a success in its first year.
- The CRA and Benefacts
Our sector partners
- Charities Institute Ireland, Volunteer Ireland and The Wheel
- Davy, Mazars, Mason Hayes Curran
- Ian Brady; Oonagh Breen; Tom Costello; Caitríona Fottrell; Deirdre Garvey; Penelope Kenny; Aedín Morkan; Patricia Quinn; Bob Semple; Geraldine Sheehan and Kevin Smyth
Leinster Society of Chartered Accountants
- Shane McAleer and Gillian Duffy
Screeners and the technical reviewers
- Geraldine Etchingham in IWA
- Derek O’Reilly, Andrew Madden and Ken Kilbride in Carmichael
- The team in Mazars, Amanda, Kelvin, Geraldine, Kate, John, Jilly, BH and Angela
Our Key note speakers to night
- John Farrelly the Charity Regulator
- Laura Anderson, Head of Enforcement, OSCR
And finally, I would like to thank and acknowledge all those organisations, who have positively engaged with the Good Governance Awards and entered this year’s competition in such large numbers. Without entries there would be no awards so thank you. We will be providing feedback to all those organisations who entered and will provide suggestions on how their annual reports could be improved. We also plan to make the Good Governance Awards website a repository of helpful information and advice on developing excellent annual reports.
I should also mention that there is no award this year to Type A organisations
We knew at the outset that the volunteer only or Type A organisations would represent the biggest challenge. The vast majority of Type As do not traditionally produce an annual report. We only received 2 entries for this category and unfortunately, this year, they were not of a sufficient standard to be considered for a good governance award. It is something to learn from, work on and to see how we can help and encourage more Type A organisations to enter next year.