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New Horizons, the newsletter of the Ecumenical Church Loan FundNew Horizons > June 2000

 

Ten Commandments for Micro Finance Boards

ECLOF board members must be committed, cause oriented and competent. These are three of the ten ‘commandments’ or characteristics for board members listed by Thomas Kandasami at the ECLOF Asia Regional Workshop held in Sri Lanka at the end of March 2000

Mr Kandasami, from India, is an expert in the financial and organisational management of not-for-profit organisations. He outlined his ‘commandments’ during a thorough and lively presentation on the roles and responsibilities of ECLOF board members and staff.

He said board members must also be creative, challenging, courageous, consistent, able to handle conflict and contemplate new ideas and practices, and have a real contribution to make to the work of ECLOF. Describing various ways in which boards could operate, Mr Kandasami said he favoured the ‘multi-type’ board. Members would include those with professional expertise in relevant fields, who brought the institution higher levels of credibility and visibility and also could play a vital role in strategic planning. Other members would have a more ‘hands on’ involvement in planning, monitoring and day-to-day operations and issues.
Other types of boards, explained Mr Kandasami, ran the risk of patronising and over-controlling the ECLOF staff for whom they were responsible, or giving them too much of a free hand. A multi-type board avoided these dangers.

He acknowledged that whatever kind of style ECLOF boards adopted, members had the best of motives for what they did and how they worked with staff. However, Mr Kandasami said he believed this proved the old adage that he had taken as the title for his presentation: ‘The road to Hell is paved with good intentions’.

He believed ECLOF board members and staff had to learn what made for sound practice. A mutually enriching inter-relationship was needed between the role of board members and the role of staff. “It is vital to avoid the situation where the vision and mission of an organisation is going one way, while the management of its finite resources is going the other, often despite well-meaning board members and dedicated staff.”

Mr Kandasami said globalisation and the liberalisation of the economy had reduced the role of the State in the development of the poor, and had marginalised the poor even more. Therefore, development organisations like ECLOF had a vital role to play in tackling poverty and needed to adopt the highest professional standards in order to be effective. “Good governance and transparency are critical for demonstrating accountability standards and credibility.”

In his presentation, Mr Kandasami examined how management could exercise its role. He detailed the responsibilities of board members and what made for transparency in the management of National ECLOF Committees (NECs).

Board members, he emphasised, must take ownership and responsibility for governance and decision-making. They must not ‘pass the buck’ even though this is often an easy option.

After the presentation, Mr Kandasami divided workshop members into groups and asked them to list sound and unsound practices. Discussion followed on methods to strengthen sound practices and reduce unsound ones. Members highlighted the need for policy makers to have a clear understanding of the reality on the ground, and the role that effective reporting systems can play. Representatives from a number of NECs shared their experience in policy formulation and the management of credit programmes. They said it was important to strengthen the grassroots through networking and leadership training. It was also necessary to set priorities, and to have manuals of operations and procedures that contained clear ground rules.

The workshop cautioned that the primacy of the clients’ interests must be maintained at all times, and that all ECLOF programmes should not lose sight of the NEC’s vision and mission.

 
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