As we have learned, ICSOs have become much larger over the past decade. They also have become much more complex. Many ICSOs have started systematically expanding their fundraising activities into countries in which they had never raised funds before. Usually they founded new affiliates or invited existing national CSOs to join. Thus the number of affiliates has increased. And, even more importantly: as many of the new affiliates represent emerging economies such as India, Taiwan, Thailand, Brazil, Mexico, etc. ICSOs are becoming more diverse. For most ICSOs the combination of financial growth and growth in the number and diversity of national affiliates means that their inherited set-up of nationally dominated governance and management structures, which has been suboptimal from the very beginning, faces even bigger difficulties to provide timely and consistent answers to the opportunities and challenges the global organisation faces.
And while ICSOs are increasing the size and complexity of their federated governance, globalisation is progressing, demanding more and more decisions to be taken at the global level. For instance: Poverty is often closely linked to the world economy, with the poor depending directly on world market prices for a handful of key products which a country exports or imports; climate change caused by industrialised countries of the Global North aggravates poverty in the Global South; poverty and lack of opportunity in combination with greater mobility lead to increasing global migration, which is often met with xenophobia and results in violence. These and many other issues can no longer be addressed at a national level only. Consequently, much political decision making has moved from the national level upwards. More and more decisions, which were previously taken by national governments are now being taken at regional (e.g. European Union) or global (UN, World Bank, IMF, G7, G20) level. If ICSOs cannot speak with a unified voice at these international fora they lose much of the little influence they have.
Limits of the federated model
The typical federated governance model of most ICSOs consists of largely autonomous national affiliates, each constituted under national law and each with their own national board carrying final responsibility for everything the national affiliate does. In addition there is usually a global board, predominantly com-posed of representatives of national affiliates, which tries to bring the diversity across the organisation into one consistent global strategy, often without having the power to call a national affiliate to order when it works outside the global strategy. While such a multinational decision making structure was acceptable at a time when practically all key decisions were taken at national level it is dysfunctional today. There are at least three major shortcomings, which are inherent in the federated model and thus cannot be remedied inside this model.
Firstly, the federated model often fails at providing quick and convincing decisions and at securing their consistent implementation globally. The federated approach often leads to complicated and arduous decision making which frequently takes too much time and produces compromise decisions among the most powerful national affiliates which are rarely in the best global interest. As global challenges and opportunities multiply and require ever faster responses ICSOs need to find more effective global answers. Devising effective global policies, and not just within individual ICSOs but also between them requires much more effective global governance and management.
Secondly, the federated model often fails to secure brand development, consistency and protection across the globe. Many ICSOs have gained impressive global prominence and developed valuable brands. Using the brand consistently around the globe and protecting its integrity are of critical importance. However, over the past few decades most ICSOs have experienced situations in which the global organisation had to stand by and watch helplessly when a national affiliate caused significant damage to the brand, e.g. through mismanagement, unethical behaviour or a political position not shared by the other affiliates. Owning a global brand without having effective governance and management structures in place, which can agree and enforce joint standards has proven to be a high risk strategy.
Thirdly, the federated model appears very vulnerable to disruptive change. In our earlier discussions we have pointed to the increasing likeliness of disruptive change. Many of the most challenging disruptions will occur at global level and require global replies. With their federated governance structures ICSOs may find it difficult to take and implement the quick, bold and globally consistent decisions, which will be required to successfully navigate disruptive change. In situations of fast and fundamental change the global governance and management many ICSOs have today may prove unable to bring diverging national interests together and will fail at keeping the global organisation united.
As a former CEO of two national affiliates and one international secretariat of different ICSOs, and from providing governance, management and strategy advice to several others, I have gained a lot of insight into the federated system. In general the ICSOs I was able to observe were over-governed and under-managed. International governance has far too many different actors trying to shape the overall direction and strategy of the organisation: different national boards on their own and in competition or conflict with each other, often an international Annual General Meeting and, finally, an international board. In contrast, in many ICSOs international management is still close to non-existent. All too many international CEOs, Executive Directors or Secretary Generals do not have any international management roles and responsibilities, not to speak of any formal powers. They are rather chief diplomats than chief executives.
In our review of the national – international fault line we pointed out that the global chairs of most ICSOs are perfectly aware of the challenges of their federated governance systems and that they have been looking for many years for ways to make this system work, to date without a breakthrough success. Recently we invited one of the leading international consultancies to provide a meeting of global chairs and CEOs with strategic advice. When I looked at the consultants’ draft presentation I found that the word governance did not appear at all. So I asked them whether they did not consider ICSOs’ governance a problem. Their answer? – “Very much so, but we do not believe that ICSOs will be able to resolve that challenge.”
Why is changing the global governance model so difficult? I see two major obstacles. One stumbling block comes from national law and tax regimes. Most countries still tie granting charitable / tax-exempt status to having a fully autonomous national board which decides about how and where the funds raised in that country are being spent. While perfectly understandable from a national perspective and especially from the tax office’s point of view, this does not make much sense if you think about the most effective global allocation of resources. Against this background it is understandable that the members of national boards are hesitant to give away decision making power. Board members are often personally liable for the decisions they take, and giving away decision making power may be in breach of national law and might endanger the national organisation’s tax-exempt status and even its very existence. The other major stumbling block is the reluctance of national boards to give away power they have often held for decades. While there are ways to transfer global decisions from the national to the global level without getting into conflict with national laws, the reluctance of those who hold power at the national level to give it away is difficult to overcome. Often national boards very skilfully combine both aspects arguing that they would like to comply with global demands but cannot do so because of their national tax and legal provisions. Given the ongoing globalisation in the outside world ICSOs will, sooner or later, be forced to develop more appropriate global decision making. “Not able to resolve that challenge” will not be a satisfactory answer forever. If ICSOs remain unwilling or unable to swap their dysfunctional federated governance and management for a more effective one, they may become irrelevant as global actors.
What kind of global governance and management would be better equipped to meet ICSOs’ needs in a globalising world? Obviously each ICSO needs its tailor-made governance and management, and I believe that a ‘one size fits all’ model is neither viable nor desirable. Therefore the aspiration of this chapter is not to deliver the perfect global model. It rather wants to encourage ICSOs to take a more open and more courageous look at their own governance. It recommends taking the bold step of implementing up-to-date global governance rather than remaining stuck in the federated system and continuing on the endless path of, the often futile, gradual reform.
An effective global organisation needs a fully empowered supervisory entity at the very top. This can be an assembly + board combination or just a global supervisory board. In the interest of streamlining global governance I suggest foregoing the assembly. The tasks of the supervisory board would be the usual statutory ones which will be determined to a large extent by the country in which the global organisation legally resides. Some of the key tasks of the board would be: to endorse key parameters of the organisation such as vision, mission, values and long-term strategy, to recruit and supervise the ICSO’s global CEO and to approve the organisation’s annual budget and annual accounts.
The composition of the board needs to reflect all key aspects of the organisation’s work. It should include key stakeholders and, in addition, secure an external perspective. It should contain all required skills and experiences and show diversity, with a good balance in terms of geography, gender and age. All board positions should have their own role specification, with the required skills for that specific board member laid out in detail. Board candidates who do not fulfil the demands of the position should not be considered. The selection process of board members needs to ensure that all of them contribute their specific expertise but do not function as proxy for a particular interest group. New board members may be appointed partly by the board and partly by key stakeholders through election or completely by the board, which considers proposals from key stakeholders when selecting new members. Regular monitoring of the board’s performance, both internally and externally should ensure that the board continuously develops its aspirations and improves its performance. Given past experiences with ICSO boards, it is also important to ensure that the board does not involve itself in the executive tasks of the management.
In a complex global organisation, governance at national level is necessarily in conflict with governance at global level. As a result, decision making is often painful, takes too long and leads to unsatisfactory results. Therefore governance at national level should be abolished as far as legally possible. If national governance is required, for instance to maintain tax-exempt status, it should be strictly restrained to exclusively national matters. I know that many national boards argue that such a limitation of their power is not possible for legal or tax reasons. However, the fact that some of the most recently founded ICSOs are able to work nationally without having a national board shows that there are possibilities to go ahead without, or with appropriately restrained, national governance.
It is important to find ways to secure ‘light touch’ governance which limits itself to determining the ‘big picture’ parameters for the organisation and supervising the global CEO. Everything else should be left to the other two strands of the organisation: management and activist participation. An analysis of the governance of internet-based, virtual organisations and specifically of virtual CSOs can provide guidance for how much governance is really required, and what kind of governance encourages wide participation and co-creation.
Under the global supervisory board there should be a fully empowered global management structure which is in charge of management across the whole organisation. If national management structures are required the national CEO should report to the global CEO – and no longer to a national board, should that continue to exist. Whether a national management structure continues to be required very much depends on the specific task it may have as part of the global organisation. In some cases it may be more appropriate and more cost effective to merge several national structures into a regional one. In other cases a division in geographical terms may no longer be required and the organisation may structure its operations along specific subsectors, different business models or specific campaigns.
A key role of the global management is to sharpen the organisation’s global profile, strengthen its global voice and partner with other organisations in order to influence global debates and decisions. The global management protects the ICSO’s global brand and both sets and enforces minimum standards for all who work under this brand. However, while the global management wields unrestricted powers at global level its powers shrink as issues arise further down in the hierarchy. The closer one gets to the level of implementation the more the power of the global management is counterbalanced by the power of activist participation. The ICSO offers different plat-forms for participation most of which are open to everybody, no matter whether she is a registered member, a long-term activist, a major donor or just an interested citizen who wants to participate in a specific activity over a limited time span and not be involved with the organisation any further.
Local, national and global activism
Broadening and deepening citizens’ support for ICSOs’ missions is a key requirement for more impact. ICSOs’ traditional mem-bership concepts, which aim for long-term if not lifelong commitment, are no longer appropriate. In order to be more attractive, especially for younger people, ICSOs need to develop a range of different more open and short-term engagement formats. Some organisations have established successful frame-works for young activists, some try to open up campaigns to a wider public. Doing this more systematically requires accepting that attracting wider support unavoidably comes with a loss of control. In our earlier chapter we have looked into some of the cultural impediments to opening up and allowing outsiders in.
Some years ago I supported an ICSO’s task group which had been given the assignment to come up with a governance model that strengthened the organisation’s internal democracy, while at the same time improving its decision effectiveness. As a result of extensive discussions, we proposed establishing a global discussion forum, which would give all individual members access to the organisation’s discussions with the possibility to run opinion polls on key decisions. These polls would inform the global governance structures that would take the final decisions. Such a system run within clear timeframes and deadlines would widen the global basis of the ICSO’s decisions, provide members who wanted a say with a range of possibilities to participate and secure timely and well informed decision making. With strengthened options for participation, activist engagement would hopefully increase and that might lead to more active and committed participation in the organisation’s campaigns. Once such a system would be up and running op-tions for opening it up to non-members could be examined. Such a step might further increase the ICSO’s reach and potential impact. It should not come as a surprise that the vast majority of the post-holders in the organisation’s existing governance were strongly against an approach which would oblige them to share power with the organisation’s activist base. The proposal never found its way into the ICSO’s formal decision making process.
The whole field of aligning virtual and traditional campaigning is still vastly unexplored. Against this background, cooperation, strategic partnerships or even mergers between traditional and virtual campaigning organisations make a lot of sense51. While these new options deserve to be explored, the framework for traditional activism should also be reviewed. ICSOs should become more open to activities initiated at grassroots level, be it from inside or outside the organisation. All too often people who want to run local regional or even wider activities, under the umbrella of one of the ICSOs, are being told that their endeavour is not a priority or does not fit into the strategic plan. Inviting citizen activism, welcoming innovative projects to the organisation, even if they have not been developed inside the traditional structures, and supporting these activities with professional capacities ICSOs have available, should become the hallmarks of a credible activist organisation.
Such an approach requires some humility in the organisation’s governance and management, and it requires a certain degree of aplomb in the face of more spontaneity and less control. A fascinating undertaking such as Wikipedia shows that self-governance by a large and only loosely defined group of those who contribute and feel ownership can produce impressive results. ICSOs should have more courage to put a significant part of their decision making relating to implementation level into the hands of those who make up the organisation. If ICSOs can marry the virtues of their reputation, professional structure and resources, with the credibility and drive of activism across the organisation they may significantly strengthen both, their impact and legitimacy.