Guy Beringer’s Blog: Governance in the third sector
I closed my first blog with a reference to the governance challenges which face the third sector. It is worth considering how these challenges have arisen.
Successive governments in this century have committed themselves to devolution of central power in a range of different ways. The political dimension of this has belatedly begun to receive the scrutiny it requires.
The notions of big society or one nation have produced an equally important shift in the structure and delivery of many public services on which society at large is now reliant. There has been little consideration, however, of the consequences of doing this or the preparatory work needed to ensure it succeeds.
Big society initiatives essentially encourage localism and the emergency of a strong voluntary sector. There are many organisations in health, sector, education, social welfare, the arts, social justice and a range of other sectors which have arisen as a result of the move to a big society and they are today an important part of the social fabric.
The consequence is that we now rely on many of these organisations for important services. They have become mainstream service providers. In return for stepping forward in this way, society now expects them to comply with the full range of procurement, employment, tax, regulatory, health and safety, governance and accounting obligations with little or no allowance for the fact that many of these organisations have no resource for dealing with these requirements and no prospect currently of access to such resource. We are unfortunately unable to blame Brussels for this disproportionate regulatory burden: we have achieved this through our own lack of forethought and the mismatch is all our own work.
If big society is to flourish – and it is undoubtedly desirable that it should – the small organisations which characterise it must be supported. This means that they need access to reliable sources of advice and expertise which are affordable.
There are two challenges here. The first is a challenge which should be met by the whole of the professional services sector and that is to devise ways of delivering remote and largely standard advice through the smart use of technology which is either free to use or very low cost. Such an infrastructure should be a public good and should be the collaborative focus of each of the professions.
The second challenge is the one at issue here. Those organisations need access to a pool of talent to act as directors, trustees and mentors to the small executive teams which run them.
There will be few more suitable pools of talent than are to be found amongst the partners and staff of professional service firms. This is not because they are potential sources of free advice. It is important that they do not become free proxy advisers. Their qualification for the task lies in their familiarity with what might be termed ‘reluctant organisations’. A reluctant organisation is one whose people would rather be left to use their skills unhindered by bureaucracy or hierarchy but who find themselves in a world where that is an unaffordable luxury. Reluctant organisations house people who seek only the approval of peers or who seek nobody’s approval at all but simply wish to use their skills to good effect.
Most professional services firms are at heart reluctant organisations. So are most voluntary sector organisations. They find themselves in a world where collaboration, efficiency and sustainable profitability are necessary evils. The governance of such organisations requires people who understand how to exercise authority in a world without evident hierarchy, a task which baffles escapees from the corporate world. the growing world of third sector service providers is a complex mix of volunteers and remunerated staff. It is a world where idealism needs to meet commercial reality and where collaboration may be the key to success. It is an ideal world for professional service firm partners and its governance is urgently in need of their contribution. It is a rewarding world which is socially important. It should be a priority for law firms to work out how their partners can best serve it.