The concepts of openness and transparency have changed dramatically in the last 20 years, in part due to the swiftness and broad reach of social media.  Publicly funded organizations have been jettisoned into a completely different realm.  As one would expect, some are faster to react and transform than others.

Boards of Directors have had to sharpen their oversight tools and processes as it is no longer acceptable, when under the looking glass, to simply take at face value assurances that all is well.  Too frequently we hear or read about what happens when an organization does not have the right processes in place – and the tales are often very sad, such as the case of Goodwill Toronto.

Effective oversight is far broader than simply financial but it is financial oversight that keeps the organization on an even keel. Most successful businesses clearly understand the importance of good financial oversight and accountability.

The Canadian Senate scandal has highlighted the hugely negative impact that oversight failures cause to an organization’s reputation.  Justice Binnie recently released his report on Senate expenses.  CBC reported that some Senators told Justice Binnie that “they did not know the rules”.  Justice Binnie’s found that for the most part the rules were clear, but decades of working around them had become the norm rather than the exception.

Situations like the Senate scandal most often lead organizations or government to resort to putting extreme measures in place that often  send a message  “we don’t trust you” as they compensate with overkill measures.  It was not the rules that were the problem as they were pretty straight forward.  What was missing was effective and consistent oversight.

We can’t legislate an expectation of good common sense and decency; however Canadians are a trusting group who do believe that people are basically trusting and trustworthy which I believe is true.  For boards of directors, please don’t panic.  Build good governance, hire skilled and competent Executive Directors, ensure there are effective oversight measures in place and evaluate on a regular basis.

Susan Bihun

NFP Governance & Management