Common Governance and Management Framework Junho de 2017
Background In most countries ChildFund International operates and implements its programs through branch offices which are part of the ChildFund International legal entity. However, in four countries this is not the case. In Thailand, Brazil, Mexico and India (called Fundraising Offices , FROs); ChildFund International has established a locally incorporated organization which has its own, independent legal status and with whom ChildFund International has a formal agreement that regulates the relationships and implementation of programs. Between 2011 and 2012, a consultation process that engaged senior leaders of ChildFund International, the Directors of FROs their respective Boards was completed. The process clarified a new common understanding of FROs as integrated program-fundraising child-focused entities which are locally governed and with a vision to progressively achieve program quality and financial sustainability, develop negotiated special relationship and privileges with ChildFund International, and possibly become an Alliance member in the future. The preferred organizational model that emerged from the consultation consists of the following elements: 1. Negotiated path to autonomy between ChildFund International and the FRO 2. Engaged partnership between the FRO and ChildFund International 3. Relationship between FROs and ChildFund International is based on consistent principles that determine the timing of transition and reflect the uniqueness of each country 4. Mutual identification and sharing of risks and liabilities 5. Open to investment plans with clearly defined measurable results 6. Future corporate (organizational wide) partnership 7. Maintain US sponsorship to facilitate/stabilize growth for a negotiated period before re-deployment by ChildFund International.
Scope This framework describes critical aspects of the relationship between ChildFund Brazil and ChildFund International. Specifically, it describes the governance and management processes and the roles and responsibilities associated with them at ChildFund Brazil, ChildFund’s Regional and International offices. Currently, the roles and responsibilities are defined through a Memorandum of Understanding signed in 1981. In 2013, ChildFund Brazil management and Board and ChildFund International agreed to develop a Common Governance and Management Framework which will guide the update and revision of the Memorandum of Understanding. The scope of this framework is to define: -
Roles and responsibilities of the local ChildFund Brazil governance bodies and ChildFund International line management in the supervision of the ChildFund Brazil program and operations.
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Roles and responsibilities of the local ChildFund Brazil governance bodies and ChildFund International line management in the supervision of the ChildFund Brazil Director and his management team Communication and reporting protocols between the ChildFund Brazil Director, Administrative council, Board chair and ChildFund International Regional and International Offices RACI (Responsible-AccountableConsulted-Informed) Responsibility Assignment Matrix for key processes in relation to the different functional areas and involved actors.
Core intente and Core Outcomes As far as ChildFund International is the major funding and management support provider to ChildFund Brazil, the relation between the two entities is defined by the Core Intent, Code of Conduct and, the rules and regulations, and the Operating Principles that are applicable to the management of programs and operations within ChildFund International relationships, but consistent with the Brazilian laws and regulations.
Core Intent ChildFund exists to: Help deprived, excluded and vulnerable children have the capacity to improve their lives and the opportunity to become young adults, parents and leaders who bring lasting and positive change in their communities. Promote societies whose individuals and institutions participate in valuing, protecting, and advancing the worth and rights of children.
Core Outcomes ChildFund strives to achieve as results: -
Healthy and secure infants, educated and confident children and skilled and involved youth Families and local organizations networked in their communities promote the development and protection of children A broad constituency of supporters dedicated to the wellbeing and rights of children
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Governance and Management Processes In order to clarify lines of governance, management, relationships, and communication we identify from a business perspective 3 governance processes (governance, planning, risk management) and 5 management processes (sponsorship, program, resource mobilization, human resources, finance and administration). For each of these processes and their respective sub-processes we have developed a RACI responsibility matrix to identify key activities, decision points and roles/responsibilities of local board, local management (National Director, NO Functional managers), regional management (Regional Director, Regional Functional managers) and IO management (President-CEO, Executive Vice-President, Functional Vice-Presidents). Within the RACI matrix, the roles and responsibilities are identified as: R= Responsible. - Position working on the activity Who is getting things done? Doing the work associated to the task? This is the process owner. A= Accountable. - Position with yes/no authority Who signs off on the deliverable associated to the task? Final governance or management authority C= Consulted. - Position involved prior to decision or action Who needs to be actively solicited for input? Process should not go and no final decision should be taken without these persons opinions being solicited and considered. I= Informed. - Position that needs to know of the decision or action Who needs to be kept abreast of the progress of the process and final outcome but whose opinion is not solicited? This person will be impacted by the process and/or has to work with the outcome of it. The results of the RACI matrix are presented in the attachments to this document: -
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Attachment 1 Overview of key governance and management processes Attachment 2 Charter of relationship for engagement: This describes for each processes and sub-process the role and responsibilities at different levels (NO management, local board, RO, IO). The charter also includes an identification of the relevant sections of the current MoU and a recommendation on its elimination, modification or continuation in the new MoU. Attachment 3 RACI Summary table: This provides the identification of the RACI responsibility for each level. Attachment 4 ChildFund International global policies and procedures: In this we have identified the relevant global policies and procedures in relation to each of the governance and management processes and sub-processes
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GOVERNANCE Brazil has implemented a Volunteering Governance model comprised of general assembly, administrative council and advisory councils. At the management level, ChildFund Brazil has a Management Governance model, composed primarily by the National Executive Team (NET) committee formed by the National Director and senior managers, who meet once a month to discuss, review and receive updates on the goals, objectives and priorities in the annual operating plan. They ensure that the annual plan is being followed and evaluate the risks and opportunities by analyzing a consolidated dashboard with 70 key performance indicators. To ensure further organizational efficiency and transparency, the NET committee receives support from various staff committees. Mutual Participation in Governance and strategic management functions: ChildFund Brazil and ChildFund International will provide for mutual participation in their governance processes: -
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ChildFund International will accept one board member of ChildFund Brazil in its international board1. ChildFund Brazil will accept a representative of ChildFund International as full member of its General Assembly and observer during its Administrative Board and fiscal Council meetings. ChildFund Brazil will provide copies of the agenda and minutes of the General Assembly, Administrative Board and Fiscal Council meeting on a timely basis. ChildFund Brazil is a full member of the Americas Leadership Team through the participation of its National Director. ChildFund Brazil staff will participate fully on relevant regional fora established by ChildFund International. ChildFund International will provide copies of the agenda and minutes of the Americas Leadership Team meetings to the Chair of ChildFund Brazil on a timely basis. ChildFund Brazil governance and management will abide by the applicable policies and procedures of ChildFund International in the areas of sponsorship funding from/through the USA, branding, foundation and corporate relations, and operating procedures.
ChildFund Brazil local board responsibilities ChildFund International is bound to comply with various rules and regulations associated with its flow of funding and domestic and international operations. ChildFund Brazil will assure that through its local governance bodies the following responsibilities are adequately discharged: -
Ensuring that ChildFund’s Core Intent, Core outcomes, Values, Operating principles and Code of Conduct are guiding its programs and operations. Oversee the development and monitor of a 5 year Country strategy, business plan and related fundraising strategy and monitoring its implementation on regular basis.
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This is outside of the scope for decision-making on this framework as this is a decision which falls within the responsibility of ChildFund International Board.
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In consultation with ChildFund International Regional Director; recruit, oversee, complete annual performance planning and reviews, terminate, and decide on the level of compensation for the National Director. Conducting an Annual Risk assessment following ChildFund’s Enterprise Risk management guidelines, tasking the National Director to develop risk mitigation plans and monitor its implementation. Endorsing an Annual Operating Plan and budget as per the guidelines of ChildFund International and monitoring its implementation. Ensuring that ChildFund International global policies and procedures are adhered to while ensuring that any ChildFund Brazil policy does not contradict nor contravene ChildFund international’s global policies. Ensuring that all local legal, fiscal and external reporting requirements are met. Selection, orientation, development and annual assessment of General Assembly, Administrative and Fiscal Council and its members
Governance Processes The governance process focuses on: A. Development of local bylaws: ChildFund Brazil has approved local bylaws which define the legal roles and responsibilities of the governance bodies. On occasions, these require review and updating. B. Selection of local governance members: The governance bodies need to select its members and assure an adequate rotation and diversity in officer positions. C. Board development: The local governance bodies need to assess annually its functioning and the effectiveness and contribution of its individual members and have development plans in place in response to the findings of these. D. Recruitment and termination of National Director (ND): The ND is the key person accountable for all program and operations in the country. For his/her recruitment a process of reviewing job description, definition of remuneration based on market and financial considerations, definition of desired profile, public and widely posting of position, shortlisting, staged interviews and reference check is followed. Termination is based on succession planning or documented performance gaps. E. Performance management ND: The performance management of the ND follows the guidance of the global Performance Planning and Evaluation system (PPE) which includes performance planning (agreeing Key Results Areas (KRAs) and performance standards), Competencies and personal growth targets), performance monitoring, midterm evaluation, 360 evaluation self-assessment, final assessment and next level manager feedback. F. Local Partner Letters of Agreement (LoAs): ChildFund Brazil implements its programs in collaboration with local partners who for this purpose sign Letter of Agreements with the organization. Local partners receive funding Common Governance and Management Framework Page | 5
through transfers of international sponsorship subsidy and subsidy through national sponsorships. G. Asset management: This refers to the adequate control, safekeeping, insuring, maintenance and disposal of all assets of the organization including vehicles, buildings, equipment and files. In this we have to distinguish assets acquired with international funds from those acquired with local funds. Also under Brazilian law assets acquired with international funds in the past have passed automatically to the local organization according to recently adopted legislation.
Planning The planning process at the governance level has 6 components: A. Global Strategy: ChildFund International develops a 5 year global strategy which provides the context for global initiatives as well as the orientation for the development of strategic plans by each national office and FRO. B.
Global Annual Operating Plan: ChildFund International develops an annual operating plan which includes the planning of key strategic initiatives and provides the context for annual operating plans and budgets by each national office and FRO.
C. Country Strategic Paper: The CSP defines the 5 year program strategy in light of an analysis of deprivation, exclusion and vulnerability of children in Brazil and defines ChildFund’s strategic positioning towards this. Within the strategic paper, the organization defines its strategic objectives, main programs to be implemented as well as considerations regarding geographical areas of intervention, strategic sponsorship quota management, local partner relationships and resource mobilization. ChildFund Brazil has formulated its Country Strategic Paper (Pasiflora) which is aligned to ChildFund’s global strategy. D. Area Strategic Plans: ChildFund Brazil supports its local partner organizations in the development of Area Strategic Plans which provides the 5 year planning framework for programs and projects to be implemented in specific geographical areas of the country. E. Business Plan: The business plan focuses on defining the fundraising strategy considering all international and national sources. Within the plan, the fundraising costs are established, investment needs identified and targets with regards to income agreed. Currently, ChildFund Brazil has a draft business plan, but which is in need of a review to reflect the experience and fundraising results over the past 1-2 years. F. Annual Operating Plan and Budget (AOPB): The AOP and budget is prepared annually (following the US July-June Fiscal Year period) and plans all activities to be implemented during the year and assigns the required budget. These resources full into 2 categories:
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a. International Sources (sponsorship subsidy to partner organization, Partner Effectiveness Fund, international grants, Working Fund assignment) b. FRO income (sponsorship, national grants, services)
Risk Management The governance process of Risk Management consists of: A. Enterprise Risk Management (ERM): The organization needs to regularly assess and prioritize the risks affecting the organization, plan actions for mitigation risks, implement the actions and monitor the impact. ChildFund has developed the ERM process and tools to support this. B. International NO internal review and special investigations: ChildFund international conducts regular audits of its branch office and FROs. NO reviews are conducted by internal assurance teams and/or external assurance companies. In addition, special investigations can be commissioned to followup to complaints or findings of local audits. Action plans needs to be developed and implemented in response to the findings of the audits and investigations. C. National Office external audit: In order to comply with local legal and fiscal regulations, ChildFund Brazil contracts an annual external audit of its financial statements. D. Local Partner Audits: ChildFund conducts regular audits of the partner organizations at the community level who receive subsidy for their programs. Currently this is conducted on an annual basis but in the near future, frequency will be based on the risk profile of each partner organization. Local partner audits are conducted by external assurance companies. E. Policy development: a. Global Policies and procedures: ChildFund International has adopted a comprehensive set of global policies and procedures. ChildFund Brazil adheres to these but in some cases there is a need to adapt global policies to local legal framework or specific circumstances. The applicable policies and procedures are listed in attachment 3. b. Local Policies: In some cases, ChildFund Brazil needs to develop local policies for areas not covered by ChildFund International global policies and procedure in response to local legislation or to mitigate specific local risks.
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MANAGEMENT Core Processes Program Program management covers: A. Program coverage: This relates to determining geographical areas where ChildFund Brazil will support programs as well as decisions regarding phaseout of areas and partner organizations. B. Partnership management: This relates to the selection of local partners, establishing a relation with them through development of Area Strategic Plans, monitoring their compliance of the LoA standards and resolving any issue that might come up in the relation. This also covers the development of a network of local partners in the direction established by ChildFund International´s local partner strategy. C. Program Quality Development: This relates to developing quality program designs which respond to local circumstances and are coherent with ChildFund´s conceptual program framework. This covers the: a. Program approach and general theory of change. b. Life stage approach and related theories of Change c. Development and implementation of specific program methodologies and tools. D. Project management: This relates to the actual implementation and project activities by local partners or directly by ChildFund Brazil. E. M&E: This relates to the process to collect, analyze and take decisions on indicators related to program accountability, performance, results and impact. F. Knowledge management: This relates to the processes to document programs and systematize learning’s for internal use and external publication. G. Emergency preparedness and response: This refers to the processes to reduce the impact of emergencies and develop appropriate response to emergency situations.
Sponsorship Sponsorship management refers to all the sponsorship processes as defined by the ChildFund International National Office Child Standard Operating Procedure Manuals and system operational guides.
Resource mobilization Under resources mobilization we differentiate processes in relation to:
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A. Local Fundraising: This covers the development and implementation of a fundraising strategy to attract resources for program implementation. In this, ChildFund Brazil focuses on 3 key markets: a. Individuals b. Corporates c. Faithbased organizations. B. International Grants: This covers the development, funding and implementation of grants from sources outside of Brazil including grants for US donors (US government, individual, corporation, foundations), global funds, grants acquired through ChildFund Alliance members and other large of small grants and contributions.
Human Resources Key HR processes include: A. Organizational structure design: This refers to the design of the most optimum organizational staffing structure and its occasional review including, merging or eliminating functions and positions. B. Staffing: This refers to the process of having the best quality of staff in place to fill the positions as defined in the organizational structure as well strategies to improve staff retention. C. Performance management: This refers to the performance management of all staff (except ND) following the procedures of the global Performance Planning and Evaluation system (PPE) which includes performance planning (agreeing Key Results Areas (KRAs) and performance standards), Competencies and personal growth targets), performance monitoring, midterm evaluation, 360 evaluation self-assessment, final assessment and next level manager feedback. D. Staff development: This refers to the process of continuous capacity-building of staff to increase their capabilities to fulfill their current and future responsibilities and grow professionally. E. Remuneration: This relates to the process of setting adequate remuneration through the development and maintenance of a competitive salary scale and locating individual staff within these. It also relates to the process of assuring accurate and timely salary and benefits administration.
Finance and Administration The key support processes in Finance and Administration are: A. Budget monitoring: This refers to monitoring the actual expenditure levels against approved budget for all sources and making timely adjustments to prevent over or under expenditure. Budget monitoring and control is done in both US $ as well as local currency.
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B. Procurement and inventory: This refers to acquisition of goods and services in which a competitive bidding process is followed to assure that Value for Money is obtained. It also covers the adequate control of goods once received. C. Accounting: This refers to the systematic and comprehensive recording of all financial transactions and to the process of summarizing, analyzing and reporting these transactions.
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