We made a mistake

2010 Article, updated November 2017   Errors in governance and administration are inevitable, and in voluntary organisations those governing and administering the entity often lack the skills to know what, who, how, and when to do things.  The previous article, Good Governance of a Society set out some of the problems, while other earlier articles have discussed the content and binding nature of constitutions and disciplinary issues. The fact that mistakes have (allegedly) been made may be raised with an organisation by those in governance or management, by an entity’s members (see the next article in this series), or by external agencies (for instance, by auditors, funders, the Registrar of Incorporated Societies or Charities Services). While there may be a natural tendency to deny that a mistake has been made or to become defensive when a mistake is alleged, such responses are seldom helpful and frequently aggravate the problem.  Further, the longer irregularities are left uncorrected the more likely it is that what may initially be a minor problem will escalate into a major crisis. When alleged mistakes are identified, a number of steps may be helpful: First, clarify the nature and details of alleged mistake or problem. Analyse the relevant documentation and events, identify those responsible for the possible mistake, and check whether there may be more to the allegation than may first appear (the issue may indicate systemic issues, the problems may be the tip of an iceberg of similar problems, the problems may involve either or both of poor governance and administrative procedures, there may be financial implications, there may be possible fraud involved, etc). Once the nature...

Dealing with Dissidents

2010 article, rewritten October 2017   Being all things to all people? “There’s nowt so queer as folk” is a phrase (variously attributed to different parts of the British Isles) that reminds us that every individual is different and that some may appear to be irrational. Most community organisations welcome into their fold almost anyone who is interested in their activities, and that means that their membership is usually very diverse. That diversity may arise from more obvious differences such as age, sex, occupation, ethnicity, and education, but less obvious differences may relate to life experiences, health, medication, and personality type. The reality is that organisations cannot and should not try to be “all things to all people.” Dr. Ivan Misner, the founder of the business networking organization, BNI, pointed out in a 2009 article that “When it comes to being a truly great organization, I believe that a jack-of-all-trades is a master of none.   Instead, I believe that you should focus on your organization’s core competencies.   Do what you are good at, and do it better than anyone else. … Don’t try to be all things to all people” (see Don’t try to be all things to all people). That statement reminds us that organisations need to be realistic, and it has implications when dealing with people within organisations; first, in any organisation disagreements will arise and sometimes (no matter what we do) that can be unpleasant and divisive, and, second, how we respond will influence the end result.   Community organisations – a reality check Most community organisations experience times when members disagree, and that can be healthy...

The Principles of Natural Justice – why they are important

Why the principles of natural justice are important “That’s not fair!” is common complaint of children. When children say that they are usually referring to what they consider to be unfair about a process they have been involved in (such as a decision on a disciplinary issue) or how other children have been treated in comparison with the treatment they have experienced. Although they and their parents may not realise it, when children say “that’s not fair!” they are calling on the principles of natural justice. From childhood, we all instinctively believe that: Investigative and decision-making processes should be “fair,” and If a decision-making process is “fair,” similar consequences will result from similar actions by similar people. Those beliefs sum up the principles of “natural justice.”   What are the principles of natural justice? Natural justice has been described as “fair play in action.” The requirements of natural justice depend on the circumstances of each particular situation and the subject matter under consideration. Accordingly, the specific requirements of natural justice and how rigorously they are applied varies according to the circumstances where they may be relevant (Furnell v Whangarei High Schools Board [1973] 2 NZLR 705 (PC) at 718). As the Law Commission pointed in the context of societies (in its Report 129, A New Act for Incorporated Societies, NZLC R129, June 2013, para 8.17): The two basic components of natural justice are: the person complaining or complained about has a fair opportunity to be heard on the matters in issue; and the decision-maker is free from bias (including apparent bias) or pre-determination. Those two basic elements can be...

Are Rules Binding?

2010 article, updated October 2017   In 2010 I was redrafting the rules of a community organisation and I was startled to be asked some questions by its chairman that made me realise how uninformed the general public are about society Rules.  The questioner was well-educated and experienced in business and community organisations, so being asked for clarification was even more of a surprise.  Here are the questions and my answers (somewhat expanded for this article):   How binding are the rules of the constitution? They bind the officers, committee and members.  Failure to follow the rules is the major cause of grief in societies and the major driver of the litigation I get involved in.  Judges can be very unforgiving when rules are flouted, especially by those whose duty it is to govern an organisation.  A critical element of good governance is observance of the constitution, no matter how inconvenient that may occasionally be.  Charities Services can also be expected to be vigilant in ensuring that the requirements charities’ rules or trust deeds are followed scrupulously and they can investigate charities (whether or not registered under the Charities Act) either on receipt of a complaint or as a result of a random review process.   How strictly should the constitution be followed? Strictly.   Can common sense prevail over the constitution? Absolutely not.  Certainly a constitution should be a “common sense” and readily understood document, but what is “common sense” needs to be an organisational decision, not one left to the changing whims and prejudices of individuals.   What are the implications of not following our constitution? See my first answer.  The “good mate”...

Good Governance of a Society

2010 Article updated October 2017   Governance and management There are clear differences between governance and management, and if that distinction is understood by societies and their members potential disagreements can be avoided or handled better. What is best for a particular entity will depend on the type of organisation, what it does (and how), the way it has evolved, and the abilities of the people belonging to it. Typically, the larger the membership of an entity or the more complex its activities the less its governance, management and administration will be directly handled by the members at large.  Where control is vested in an executive committee and especially in employed staff, the risk is that members are left in the dark and become alienated. Too many entities are governed and administered by people who fail to read and understand the entities’ constitutional documents, and who are simply incapable of doing a competent job.  This is no new phenomenon, but in recent years a number of scandals in the voluntary sector in New Zealand have become very public, most of which can be traced back to poor governance or administration by people without the skills, training, aptitude and/or mental attitude to do a proper job; all too frequently leading to misappropriation or misuse of (often taxpayer) funds.  The article, “Lessons from a Polytechnic?” highlighted these issues, and other examples of the mis-use of funds regularly appear in the media. As mentioned in the “Lessons from a Polytechnic?” article, the New Zealand Rugby League, over some years had major governance and organisational problems, and SPARC (Sport & Recreation New Zealand) as a...