Sub- Committee, A Governance tool for NGO’s
Most NGO’s are set up as Trusts and some as Section 8 companies under The Companies Act. In order to gain a tax-exempt status as a Charity, or form a non-profit under The Companies Act, the Management Trustees or the Members of the Board are prohibited to be compensated for any specific office they hold, be it President, Treasurer, Secretary or Management Trustee. In a sense they are and can only be volunteers and depending upon their circumstance, skills and passion contribute at some level. On the assumption that the NGO can afford and willing to pay market-based salaries for professionals, they cannot hold the highest office’s in an NGO, making it hard to attract the best of talent to this sector.
Therefore, how do NGO’s grow and sustain their organizations and the causes they espouse, when the founders can’t get paid and professionals who get paid can’t aspire to be in the Management Committee or the Board of Directors? How do growth, structure, professionalism and best practices permeate within an NGO bound by these conflicting parameters?
Read More, GST Compliance Rating
One solution may lie in structuring the Management Committee and other Volunteers into a two-level framework. Level ONE being the Management Committee and Level TWO being Sub-Committees. These Sub-Committees may be set up for either a functional objective of say Finance & Compliances or HR or Fund Raising or specific programmes/projects of the NGO. This would not only unburden the Management Committee but supplement them to leverage the strengths of capable Volunteers and by empowering the Committee with a clear focus area, it becomes a means for the Sub-Committee members to contribute in. This allows the management committee to ensure that sufficient attention is being paid to the detail of specific issues without one topic dominating the committee agenda at every meeting.
Delegating to sub-committees
The main committee is responsible for all decisions taken by the sub-committee so members should satisfy themselves that the mandate, objectives, process, and reporting on the Sub-Committees charter area is well defined and overseen. As with any delegation, it is also essential that the members of the sub-committee are people with relevant expertise and that they are given sufficient information about the role and appropriate support in carrying out their duties.
The charter document of the NGO to be referred to ascertain whether it enables the formation of Sub-Committees or there are no barriers in relation to setting them up or limits to their operation.
Terms of reference
Each sub-committee should have a clear mandate and terms of reference in writing agreed between the Management Committee and the Sub- Committee and its members. The composition of the Sub-Committee may be a combination of a Management Committee Member with other Volunteers with the requisite competencies for the mandate, outside experts, etc. Whether the Sub-committee has a designated Chairman or picks a Chairman for each meeting or works as a collective is spelled out. The frequency of formal Sub-Committee Meetings is set out as once a month, a quarter as appropriate for the objectives and convenience of its members. The tenor of each of the Committee Members is defined so that there is an opportunity for periodic review and change. The specific powers delegated by the Management Committee is clearly written out. Minutes of the meeting to be recorded and who is responsible for the same to be spelled out. These minutes to be reported back to the Management Committee for ratification or approval as the case may be.
Terms of Reference should be reviewed at least annually by the Management Committee/Board to incorporate learnings and refinements.
As the Sub-committee route is volunteer-driven, it’s success will depend on very many no of factors viz leadership and support extended by Management Committee, composition and efficacy of the members of the Sub-Committee, clarity of mandate, providing necessary support of people, technology, process and information for the Sub-Committee to be truly independent in it’s designated scope of work. Once an NGO learns how to effectively leverage it’s governance through Sub-Committee’s then, it’s managerial potential is theoretically limitless and at no additional costs!