THIRD SECTOR GOVERNANCE AND ITS CONTRIBUTION TO CIVIL SOCIETY

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THIRD SECTOR GOVERNANCE AND ITS CONTRIBUTION TO
CIVIL SOCIETY

• Associate Professor Jenny Onyx
• Director CACOM
• (Centre for Australian Community Organisations
  and Management),
• University of Technology, Sydney

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• The third sector comprises all those
  organisations that are non government and do not
  distribute profit
• The third sector includes all those ancient and
  traditional organisations that have evolved
  throughout history to find collective ways of
  solving human needs

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• It includes NGOs, religious institutions, service
  and welfare organisations, sporting
  organisations, leisure, professional, and
  advocacy organisations
• Together they represent the energy and interests
  of the people and the basis of civil society
• They are separate from the state and from
  business, but they often work in partner-ship
  with both

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• Civil society is the source of advocacy and
  democratic voice and as such people power can
  call a government to account as no other sector
  can
• It is also the source of new ideas and solutions
  to social problems
• The organisations that together comprise the
  third sector are the primary arena for the
  development of social capital

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SOCIAL CAPITAL

• The third sector is the primary arena for the
  development of social capital. Social capital
  can be defined as those features of social
  organisation, such as trust, norms and networks
  that can improve the efficiency of society by
  facilitating coordinated actions

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• Groups and communities with high levels of social
  capital have numerous interconnections between
  members and high levels of trust
• Like other forms of capital, social capital can
  be realised in tangible outcomes
• Social capital also has the advantage of
  increasing iteratively. A store of social
  capital facilitates coordinated action which in
  turn increases the store of social capital

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• Social capital belongs to the group or community
  rather than to an individual
• The development of social capital requires the
  active and willing engagement of citizens working
  together within a participative community
• Where there is a dense network of third sector or
  voluntary organisations, there is also stable
  government and a healthy economy

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GOVERNANCE

• To achieve quality outcomes, organisations need
  to be well governed. But what does good
  governance refer to?
• There are quite different ideas about what third
  sector governance, or good governance means.

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Nonetheless, they all need to address some common
principles of good governance

• A means for identifying the goals and future
  direction of the organisation
• A means for making specific action-oriented
  decisions

• A means of implementing decisions
• A means of accountability for those decisions and
  actions

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Model OneA Corporate View of Governance

• The first is the corporate model. It refers to
  the capacity of the Board and manage-ment to
  drive the company forward within a framework of
  effective accountability (Pricewaterhouse
  Coopers)
• There are a number of assumptions in this notion
  of governance. Lets look at some of these.

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• It assumes that the organisation is performing a
  set of actions on behalf of an external set of
  shareholders or stake-holders.
• It is the task of the Board of Management to set
  the mission of the organisation, and to determine
  the broad strategic direction that the
  organisation is to take. The manager is then
  accountable to the Board for the successful
  operationalisation of these strategic directions.

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• The organisation is an objective entity that
  follows basic scientific laws. Therefore the
  organisation should be controlled. The manager
  makes the organisation more efficient and
  effective
• The organisation is concerned with the
  achievement of specified objectives. The
  objectives are concrete, specific, practical
  targets established to achieve the organisations
  larger mission

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• Management is a technical process
• As much of the work of the organisation as
  possible is routinized. Work follows formal
  procedures and rules
• The work of the organisation is normally carried
  out by specialized division and hierarchy
• Workers work for money, that is for short term
  self interest. Labour is a rational exchange of
  labour and obedience for adequate wages (and
  perhaps opportunities for promotion)

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Model TwoA Traditional Model of Governance

• Traditional Asian perspectives may produce quite
  a different approach to governance. Here there
  is an emphasis on the values of respect for the
  elders and for tradition.

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• Within this model of governance, the leader
  obtains their position by traditional means.
  There is not usually a democratic election of the
  leader, or an independent process of
  advertise-ment and selection by merit.
• Good governance involves the responsible and
  ethical carriage of authority by the elder or
  patron.

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• The purpose and direction of the organisation is
  based on traditional values and assumptions. In
  return for their loyalty, the patron or leader is
  expected to support and protect the interests of
  the members.
• There is no direct or written form of
  accountability.

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Model ThreeThe Democratic Model of Governance

• Participatory democracy requires a form of
  governance that involves the people in an open
  and participatory manner.

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• A democratic form of governance requires some
  form of consensus of equals and transparency of
  process.
• The requirements of good governance concern the
  genuine participation of all stakeholders in
  decision making.

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Some Problems and Solutions

• Conflict and struggle for power is almost
  inevitable. Specific dispute resolution
  processes are required, and a mutual commitment
  to the achievement of common goals.
• Effective workplace mediators or coaches mediate
  power across hierarchical barriers and
  facilitate networks that traverse work roles and
  narrow sectarian interests, in the interests of
  the common good.

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Some Problems and Solutions.. cont.

• The challenge is to establish processes which
  genuinely empower the individual and which
  mobilize social capital itself.
• It requires the provision of appropriate
  information in a timely manner to provide the
  basis for effective decision making by the
  stakeholders involved.
• And the mobilization of local resources
  financial resources but also local knowledge,
  trust, and the voluntary labour of their members.

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Some Problems and Solutions.. cont.

• New solutions may be generated by the combined
  creative energies of the contributing parties.
• Accountability mechanisms need to be trans-parent
  and open and understandable to all
• The form in which accountability reporting is
  framed is also important. Such reporting should
  meet the following requirements

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Some Problems and Solutions.. cont.

• prepared in a readily understood, user-friendly
  language and format
• to include specification of agreed performance
  indicators as well as financial parameters of
  income and expenditure
• the organisations mission, target objectives and
  performance indicators have been negotiated to
  the mutual satisfaction of all stakeholders
• the report is lodged in a public place that is
  easily accessible to the constituent community

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DISCUSSION

• What is the appropriate form of governance for
  Asian third sector organisations?
• There are advantages to each model.

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• The corporate model of governance enables maximum
  flexibility and control over the direction of the
  organisation by a small group of people. It
  provides a legal form and accountability
  mechanism, which minimizes the possibility of
  corruption
• The traditional model of governance emphasizes
  the values of respect and civility, which are
  important in maintaining a national consensus.

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• The most effective model of governance for the
  purposes of developing social capital and a
  strong civil society is the participatory
  democratic model. However it is the most
  difficult and complex in terms of the governance
  tasks.

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We live in an imperfect world of inequality and
conflict. Social capital provides a glimpse at
least of a new paradigm of hope. But we cannot
build social capital effectively unless we can
establish unique forms of governance that are
appropriate both to the independence of civil
society but also that maintain some of the
traditional values of Asia. A more careful
understanding of social capital, power,
governance and the mechanisms of accountability,
and how these interrelate, are a useful next step
in that process.