FEATURE
Better
Accountability: A Different Approach For Reporting to
the Membership
A CCAF
report1 focusing on  improving
public sector reporting performance also has some relevant
messages for
associations, and should be considered in the context of
improving reporting to members.
The report authors note that governments
are seeking "to combine
high levels of performance with
high standards of probity and due process in the conduct
of public business. To foster
higher levels of performance, they emphasize being
client-centred and innovative, and
giving more authority and flexibility to front-line
employees to exercise their discretion.
In so doing, governments accept the need to manage the
risks inherent in greater
flexibility in order to secure the reward of better
results.
A risk-reward approach needs considerable discipline to
manage the tensions involved in
conducting public business with greater flexibility and
a stronger results orientation. Two
related sources of discipline are essential. One is a
shared set of values. The other—the
subject of this report—is clear and transparent
information about performance."
Associations have the same challenge,
and the need for a shared set of values is becoming
increasingly clear to a growing number of association
Boards and CEOs. As well, many associations have been
struggling with reporting on association performance
with the transparency and clarity demanded by members.
The plus side, as noted in the report,
is that good information about performance will improve
decision-making and cohesion, bring a shared sense of
purpose, and support organizational learning. In
addition, once reported to the membership, it enables
confidence and trust to grow in staff-governance-member
relations and enhances accountability.
Recent research from the association
sector in the U.S. also suggests that associations need
improved information and knowledge if governance is to
be enhanced in terms of nimbleness and effectiveness.
Technology has also changed the rules of
the game in association reporting. Members can be
inundated with association information because cost and
time are often no longer the inhibitors to information
dissemination they were before. Association boards and
staff have a role in enabling members to filter and make
sense of the information. It is not sufficient to
simply dump information to members, just as it is not
appropriate to dump information onto Boards.
In the context of governments reporting
to citizens, the report notes that:
'The context and structure furnished by credible formal
reporting helps all stakeholders to:
-
locate the ongoing discussion of performance and
performance expectations in a
meaningful context and provide key reference points;
-
promote accountability as a substantive means for
improving performance;
-
provide a two-way street between those who report and
those who use reports;
-
provide entry points and signposts to other types and
levels of information that
governments make accessible to citizens; and
-
develop the capacity of all participants to play their
roles in governance,
management and accountability processes."
Clearly, the same enablers apply to
members in their relationship with associations.
In the report,
CCAF recommends nine related principles to provide
direction for future advances in
public performance reporting in Canada. "These principles
reflect a unique integration of
the differing perspectives of legislators, managers and
auditors—three groups with an
important stake in public performance reporting.
Taken as a set, these core principles provide a guide to
judgment in the preparation of
reports (but not a template for what they will say or
deal with)."
The general principles recommended by CCAF are as
follows:
1. Focus on the few critical aspects of performance.
This focus already exists to some degree
in the association sector, however more is required.
John Carver incorporated this into his policy governance
model, however many organizations are troubled by the
idea of picking only some items to report. The CCAF
report suggests that the diversity of interests and
needs can still be met -- "To warrant confidence, the
selection process must be rigorous, and it must be
transparent. Providing links to help users access
unreported information can also build confidence in the
appropriateness of the reporting focus selected."
2. Look forward as well as back.
Associations generally have a
forward-looking perspective, but the report identifies a
couple of aspects where associations also need
improvement -- linking results to previously set
expectations, and presenting past and future information
in a consistent manner to facilitate members'
understanding of where the organization has been and
where it is heading.
3. Explain key risk considerations.
Associations need a greater emphasis on
risk management, especially in relation to risks that
will potentially impact the organization's ability to
achieve its desired results. The report suggest
that "Reporting should identify
the key risks as viewed
by management, explain the influence of risk on choices
and directions and relate
achievements to levels of risk accepted."
4. Explain key capacity considerations.
If I had a nickel for every association
CEO who struggled with balancing Board expectations with
available resources, then I'd have lots of nickels.
It is a real challenge for some CEOs to address this
with their Board so as to maintain a balance. The CCAF
report highlights the importance of informing
stakeholders about resource allocation implications on
the ability to achieve goals and strategic objectives.
It's a good reminder about why it is
important and needs discussion and understanding.
5. Explain other factors critical to performance.
Members' expectations and their view of
the association's performance will be more realistic if
members understand the factors at work that impact the
performance.
Given that Boards are challenged in
engaging members, perhaps this might be a way to involve
members in the discussions and secure support and input.
6. Integrate financial and non-financial information.
For associations, there typically is an
intent to balance the financial and non-financial.
However, in my view, the non-financial is often off
course....with information reported for which members
have no interest.
7. Provide comparative information.
The CCAF report highlights a key point
that associations would be well-advised to consider --
"Information about the
results of comparable
organizations helps show the reasonableness of
performance expectations and the
potential for improvement."
8. Present credible information, fairly interpreted.
There is a significant dose of doubt
impacting stakeholders of companies, governments and
associations. Unfortunately, there is a greater tendency
now to doubt the results and the interpretation of the
results compared to just a few years ago.
To regain that trust, governance and
especially management must embrace in its reporting "the characteristics of
consistency, fairness, relevance,
reliability and, most especially, understandability."
9. Disclose the basis for reporting.
Members need to understand why reporting
is being done the way it is...and what decisions were
made in shaping the report. Of course, it is of
utmost importance that members know that the Board and
management stand behind the report, and what measures
were undertaken to ensure its accuracy and reliability.
In conclusion, let me convey one further
comment from the report that provides guidance on the
application of the principles -- "As noted, these nine principles for public performance
reporting comprise a set.
Generally, the first five principles provide guidance
about what governments should
report, while the remaining four relate more to how
governments report it. These
distinctions are not rigid, however, as each element of
the set interacts with the others;
how something is reported will often influence what
content gets reported and vice versa.
There are particularly strong links between the
principles dealing with reporting on
expectations, risk and capacity, all of which should be
interpreted in the context of the
first principle, namely, focusing on the few critical
aspects of performance."
If your organization is encountering challenges in
meeting the expectations of members with respect to what
the organization reports, and how and when it reports,
the CCAF reporting principles will provide some much
needed direction.
1
Reporting Principles - Taking Public Performance
Reporting to a New Level, published by the CCAF-FCVI.
Formerly known as the Canadian Comprehensive Auditing
Foundation, the CCAF-FCVI's mission is "to provide
exemplary thought leadership and to build both knowledge
and capacity for effective governance and meaningful
accountability, management and audit. The focus for, and
beneficiary of, our work is the public sector."
 Wayne Amundson is president of Association Xpertise
Inc., a consulting firm serving associations and
non-profits. He is also writer and speaker on
association and non-profit management and governance,
and is editor of The Canadian Association e-zine and
co-author of the new “Primer for Directors of
Not-for-Profit Corporations” published by the Industry
Canada and three non-profit umbrella groups in Canada.
Phone: 403-374-1822 E-mail: admin@axi.ca
Website: www.axi.ca
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