Performance Management

Purpose of Performance Managment

The purpose of a performance assessment process for governing body members of Non-Profit Organisations (NPO’s) departs somewhat from the approach of evaluating professional, executive or non-executive governing body members of business enterprises.  The primary and most obvious difference being that these officers are normally not paid for their services and their involvement is based on professed altruistic motives of social benevolence rather than for financial gain.  Even where such governing body members are recompensed in part or full for their services, the intention is reimbursement rather than reward

Research has revealed that there are specific characteristics and behaviours that distinguish strong, effective governing bodies from poor ones and that there is a positive and systematic association between the governing bodies performance and the organisation’s performance.  This performance review instrument is based on the characteristics and performance areas best associated with organisational effectiveness.

Many NPO’s are constantly aware of the importance that Corporate Governance plays in the carrying out of their duties and support in the area of governing body service.

They have therefore and in the spirit of continuing to create an empowered environment for their governing body members, embarked on governing body performance review processes. The core objective therefore is to allow the organisation to establish a policy of ‘Principles of Good Governance and Code of Good Practice’, which generally the governance sub-committee would already have begun to action and through this approach professionally support the governing body. The process should not be viewed as a paternalistic approach to governing body performance reviews, but rather that the nature of the organisation warrants that its Board Performance review process should be aligned with and add value to the organisation. This is generally driven by the governing body through the chairperson, with the full support and responsibility of the sub-committees.

King IV consists of 16 principles, all of which are required to be applied by governing body members in terms of the new companies act. However, in addition to the 16 principles, King IV provides 208 recommended practices – it is these practices which organisations may choose to apply or explain in what other way they are applying the principles.