13

Theme - Issues and Challenges in Governance of microFinance Institutions (mFIs): Indian Experience

is the comprehensive assessment of all

freedom for chief functionary or chief

major areas of board service.

executive officer and help the board to

focus on values, use the board time

Usually it takes one to one and a half day

effectively in addition to avoiding micro-

for the self assessment which may include

management focus on vision, clarifying

sharing the major finding from the self -

the grey areas and providing a

assessment. The major task is for the

systematic approach.

facilitator to come with key points in each

This module covers four recommended

instrument and also paint the broader

policy Categories namely impact to be

picture. These eleven instruments are

achieved, operational parameters,

interrelated but depending upon the size

board-executive relationship and

and the complexity of the organization

governance process. The impact section

some instruments can be left out. One of

clarifies its values, on who the clients

the interesting things about these

should be, what impact the organizations

instruments is that they are also

should have in their lives and the

educational and provide key themes

sustainability goals the organization

from which the participant can draw their

should set. The operational parameters

own lessons. Section four of the

set boundaries and delegates authority

Assessment Tool ­Cum- Training Manual

to the Executive Director. This section

deals with instruments for individual board

deals with financial condition, portfolio

member

performance.

Having

accounting and human resources. The

seedcased the board collectively, this

section on board-executive relationship

time is used to reflect themselves as

clarifies the grey space and sets the

individual members. For example, it has

criteria for monitoring the performance

questions on the ability to assess business

of  the  Executive  Director.  The

plans, which may point to the member

governance process section deals with

to build their own capacity, so that they

job description and sets standard for its

can be effective instruments of the

own conduct.

board. This instrument may bring out a

collective need for training programs in

Even though this module covers four

certain areas.

policy categories, some may be added

The possible outcome would be a shared

or deleted according to the need and

reality among governing board members

the maturity or stage of development of

regarding the various aspects of

the organization.

organization and may provide a

collective need for training in specific

This training programme involves around

subjects or one more retreat to arrive at

one and a half days to two days. This is

a consensus for taking further steps.

because, board members are always

busy and in most of the organizations they

In AIAMED experience, this has worked

volunteer their time, it is better if it is

well in medium sized and complex

finished within the shortest time possible.

organization. For a small organization,

some of the key instruments can be used

In AIAMED experience, this workshop has

and the rest of the time can be used for

started off discussion on policy and has

training in concepts and performance.

resulted in HR manual, incentive policies,

etc. This workshop also brings out the

This can be followed up with a training

gaps that may exist in governance and

programme on governing and policy.

policy.

Training programme on Governance and

Administering the self-assessment module

Policy.

and governing with policy may need one

Section four of the

to two days training for the master trainer.

Assessment Tool ­

While many boards have specific policies

Cum- Training

on  cheque  signing  or  loan  loss

The opportunity to serve the poor with

provisioning, majority of them lack a

Manual deals with

financial services in the promotional and

policy which sometimes leads the

instruments for

protectional areas of finance is

organization towards hotspots which may

individual board

enormous. This needs effective retail

involve loss of customer trust, legal issues

organizations, which can combine fund-

member

and sometimes suspension of license or

based activities with fee-based activities.

performance

statutory sanctions.

Effective organizations evolve over a

period of time .One instrument, which

This tool-based training program is to help

enhances this process, is governance

facilitate governance and policy, which

and this can enhanced by these

will result in having healthy control of the

instrument based capacity building

board on strategic issues, operational

workshops.

Mr. V.Satyamurti is the Chief Executive Officer (C.E.O) of All India Association For

Micro-Enterprise Development (AIAMED), Delhi