Towards Better Governance Among Training Associations
We have probably heard of the term corporate governance so much that the essence of it is sometimes lost in the use or overuse. Corporate governance refers to the system of rules, practices, and processes by which an organization is managed, to balance the interest of stakeholders. In the case of a company, that would incorporate shareholders, senior management team, employees, customers, vendors, regulatory authorities, and the community.
They are an internal check and balance system within the organization. A good system of governance does not require the leader’s charisma to build trust and boost stakeholders’ confidence. Instead, the system itself is the source of trust, integrity, and transparency. Thus when we claim that there was a governance issue, we are referring to the lack of rules, policies, resolutions, and processes or the non-adherence to an established system.
While governance is promoted in the corporate world, these practices have gone under the radar for associations and NGOs. Most of the time they have a professional charter that describes the essence of professionalism of members but not necessarily governance of office bearers. Regardless of what is stated in their constitution, the spirit of governance must be upheld by the office bearers; for they are the basis for confidence, trust, integrity, and transparency of the members and public towards the industry.
While several principles make up the domain of governance, two major principles that stand out are conflict of interest and transparency. Both of these alone can instantly make or break confidence beyond any other factors. Transparency International, a global movement that advocates greater transparency and integrity across all sectors, has a clear definition for conflict of interest and transparency.
Conflict of Interest – Situation where an individual or the entity for which they work, whether a government, business, media outlet or civil society organization, is confronted with choosing between the duties and demands of their position and their own private interests.
Transparency – Characteristic of governments, companies, organizations and individuals of being open in the clear disclosure of information, rules, plans, processes and actions. As a principle, public officials, civil servants, the managers and directors of companies and organizations, and board trustees have a duty to act visibly, predictably and understandably to promote participation and accountability and allow third parties to easily perceive what actions are being performed.
There is an important need to highlight this for the associations representing the training industry. Since we are the advocates and educators for right practice, ethics, integrity, and productivity among employees and corporations. The Executive Committee (ExCo) play a crucial role in raising the quality of the industry through continuous education of their members, promoting the industry as a whole for the benefit of the community, and acting as a representative of their members to the relevant government agencies. They are the voice of their members. Thus when it comes to negotiating with authorities, that negotiation has to happen without any fear or favour.
The crux of the whole matter is the governance within associations on their nominated representatives to negotiate on behalf of their members and industry in general. It is important to note here that while agencies are custodian and regulators, they are also responsible to implement development programs for the industry through grants and various government schemes. Training companies can participate in their tenders. After a thorough vetting, successful companies are selected to run those development programs.
The question of governance here is not in the way these grants were offered. The issue of governance is whether the representatives of the associations who are responsible to negotiate on behalf of their members are also receiving those grants. There is absolutely nothing wrong with receiving the grants based on merit. However, the fact that any representatives’ company receiving contracts, creates a textbook case of conflict of interest if they are also representing their members to negotiate with those government agencies. Going back to the definition “…confronted with choosing between the duties and demands of their position and their own private interests”.
To maintain good governance, individuals benefiting from such contracts should be upfront about it and disqualify themselves from the negotiation table. This is not suggesting that they have not demonstrated behaviours of trustworthiness. It simply says that the system by which they are operating raises the issue of trust and confidence for their members.
This brings us to the second point on transparency. Are the association members aware that their representatives have received such contracts? Once again, this does not suggest that ExCo must reveal their accounts and client database. Instead, they should be open about the contracts awarded directly by the government agencies where they are representing their members. This is to create confidence that their decisions will not be swayed by any personal interest when objecting or negotiating a policy.
Thus, to gain the trust and maintain a higher degree of corporate governance within the training industry, the following are some recommended guidelines for associations;
- The ExCo or representative of associations must make public to their members the quantum of contracts of grants or projects awarded to them or their companies by any government agencies where they are representing their members. This does not include contracts from other corporate clients.
- Members must demand transparency of their leaders and call for an association governance charter.
What will be the outcome of this approach? It places the members in a more informed position, promotes integrity and transparency; and the system itself places a major hurdle for any potential misconduct. The practice provides three options for the members;
- Members may allow the ExCo or representative to still represent them because the value of the project is negligible.
- Members may allow the ExCo or representative to still hold their position but should not be a representative to those government agencies and should abstain from any voting decision within the committee on matters involving those agencies.
- Members may feel that there is a serious potential where the ExCo or representative may not be able to decide impartially due to the size of the contract. Hence it is in the best interest of their own business to end their term of service in the office earlier.
Note that none of these suggestions question the ExCo’s integrity and ethics. The practice itself is to protect these ExCo’s from being a target of falsehood and rumors. Furthermore, it also acts as an exemplary way of how governance can be practiced by ordinary citizens. Government agencies have a role to play in this too. It would be the purview of the respective Chief Integrity Officers to ensure that the parties whom they are negotiating with, do not raise doubt among the public and stakeholders on the integrity of their institutions.
In 2018 the nation made a very strong demand for the very same practices of integrity and transparency from our government leaders. Trainers were some of the most vocal people who daringly spoke out to demand the highest standards of ethics. Today the ball is in our park. We are the preachers of principles. The question now to training associations is… can we walk our talk?