Standard 2a

Members of the Board of Directors hold the provider accountable to its mission and social goals.

Your board should use social performance information to shape and adjust your institution's strategy, and hold the director to account for achieving social objectives. It should also protect the provider's social focus in times of transformation and growth. Use these resources to learn more about turning commitment into action at board level.

Guidelines

Your Board's Social Responsibilities: Guiding Your Board to Manage Social Performance

SPTF's publication is a short guide for financial service provider (FSP) managers on how to work with their boards to manage the FSP's social performance. The publication will also be useful for board chairs and members as well as for others who work with FSP boards, such as FSP executives and staff, technical assistance providers, or funders.

Segments from the Universal Standards Implementation Guide

A much shorter version of the Universal Standards Implementation Guide that only includes sections most relevant to the role of the Board of Directors in managing social performance. This document includes several examples of practices of providers around the world (e.g., Negros Women For Tomorrow Foundation (NWTF) in the Philippines, Chameroun Microfinance in Cambodia, Juhudi Kilimo in Kenya).

Handbook on SPM for Boards

A guide on the role of the Board of Directors in guiding senior management on the implementation of social performance management (SPM) in FSPs. The handbook explains the case for social performance at the board level, offers step-by-step guidance on how to take it into practice, and includes practical examples from FSPs (mostly ASKI).

Imp-Act SPM Practice Guide: Chapter 4

Imp-Act SPM Practice Guide - Putting the “social” into performance management. Chapter 4 (pages 71-84) refers to how to get a board “on board” with SPM, looks at board composition, and institutional type influence in the SPM process, and the role of leadership.

e-MFP Brief #2 on Sharing Innovative Practices for Responsible Finance Investment

This brief includes examples from European investment funds working to strengthen governance at the sector and at the FSP level. Most relevant for boards is the second section on straightening governance at the FSP level (pages 7-11), which includes examples of SPM committees at the board level (AMK Cambodia, Apoyo Integral in El Salvador), a social performance dashboard (Contactar, Colombia), and a self-evaluation tool for boards (developed by Incofin).

Imp-Act/MicroSave Guidance Note on Governance

Effective governance is increasingly seen as a key ingredient to success – whether for private companies, non-government organisations (NGOs) or FSP's. This briefing focuses on the role of the board of directors in ensuring effective governance. In this context, the section on board orientation/training and creating a balanced perspective is relevant (page 3), as well as the section on establishing an SPM committee (page 9).

Imp-Act Risk Management Guidance Note

A quick overview of the main non-financial and operational risks typically overlooked by FSPs. The note discusses the key provider questions, and the importance of analyzing existing practices to assess how the FSP may overlook some of these risks. It also presents emerging practices that FSPs are finding useful to help them integrate social performance into their risk management activities.

Internal Control: Imp-Act Guidance Note

This briefing emphasises the importance of integrating social performance into internal controls and audit. It offers guidance on how FSPs can systematically check compliance with their social mission into: client protection, quality of service provided to clients, and monitoring impact on clients’ lives.

Staff Incentives: Imp-Act Guidance Note

This briefing frames the key questions to consider when reviewing an FSP's staff incentive system. It then identifies some emerging practices that FSPs are finding helpful in ensuring that the staff incentive systems appropriately balance their social and financial performance objectives. 

Hardwiring Social Mission into MFIs

A concept note developed by Grassroots Capital Management that can be of use for board of directors as they contemplate or prepare for changes in structure and want to take action to avoid mission drift.

Stemming the Tide of Mission Drift

An excellent general resource, provides an overview of the process by which FSPs transform from NGOs into regulated providers, and examines the impact of transformation within a group of FSPs over five years, with particular focus on the effect of transformation on an FSP’s outreach to low-income women.

CGAP Focus Note No 79: Effective Governance for Microfinance Institutions

This paper examines the role of governance, including the roles of board members, board composition, and an explanation of important issues of trust and conflicts of interests. In this context, the discussion on page 3 around transformation is relevant.

How to Develop an Institutional Code of Ethics

Establishing high standards of ethical employee behaviour is a two-part process; first, the provider defines standards of behaviour, and second, those standards are brought to life throughout the institution. This guide focuses on the first part of the process—defining standards of behaviour through a formal Code of Ethics.

Preventing Mission Drift during Institutional Transformation

This is an Imp-Act Consortium resource on transformation that includes the measures that FIE, Boliva took to protect its social mission when it made the transition from a non-profit NGO to a for-profit provider, and offers lists of key questions to ask potential new donors and investors.

Tools and Templates

Sample Dashboards:

Khushhali Microfinance Bank Ltd, Pakistan SPM Dashboard 2016

Khushhalibank’s SPM dashboard shows the bank’s social targets, alongside its performance on those targets for the last two quarters. All of the social targets are quantitative, allowing the bank to measure progress toward their goals and demonstrate this progress to management and the board.

Kashf Foundation SPM Dashboard Dec 2014

The dashboard contains a list of "key performance indicators (KPIs)" related to various aspects of SPM - outreach, appropriate products & services, gender equality, responsible finance and impact. The dashboard includes a simple notation that helps the readers understand the trends at a glance.

AMK Cambodia social reporting framework is a dashboard-style internal reporting framework which aggregates monitoring data on whether the organization is meeting its social performance goals.

ASKI Annual SPM Dashboard is an example of a visual SPM Dashboard for the Board. The dashboard contains monthly, quarterly and annual input sheets that help auto-populate the SPM Dashboard.

Opportunity International (OI) SPI4 Board report template is an example of an SPM dashboard. OI is collaborating with CERISE to develop a version of the SPI4 that will produce customized reports based on OI’s social indicators. Please note that the attached dashboard is a template and is not populated with real data.

Chamroeun’s SPM Board Committee Terms of Reference
The TOR for Chamroeun Cambodia’s SPM Board committee defines the committee’s purpose and responsibilities.

Small Enterprise Foundation (South Africa) Code of Ethics
This is an excellent example of a clearly written and well-structured code of ethics. It covers standards of behaviour expected from staff in relation to clients, the provider and the wider community. It also references rights of staff as employees of SEF, and lays out clear guidelines in terms of sanctioning unethical behaviour.

Smart Campaign Sample Client Protection and Ethics Codes
The SMART Campaign has compiled a list of codes of ethics from providers around the world, which are available for organisations to download and adapt.

NATCCO (Philippines) SPM Commitment Board Resolution Template
This template was created by the NATCCO Network in the Philippines for its member cooperatives, to help their boards formally signal their commitment to SPM and form an SPM Committee (as appropriate). This template can be adapted to suit the needs of different providers.

Case Studies

AMK Cambodia's Board Social Performance Committee
This video features AMK board members and leadership speaking about the institution's innovative approach to board management of SPM--a Social Performance Committee (SPC). They discuss the role of the SPC, the client information considered by the board, and the benefits of managing SPM through the SPC.

VF AzerCredit’s Code of Ethics: Putting values into practice
This case study provides a practical overview of the process of developing and implementing VF AzerCredit’s Code of Ethics. The case also provides recommendations on improving the Code to bring it more closely in line with the Universal Standards for Social Performance Management. Among them are: maintaining dialogue with the staff to have their feedback about possible changes, taking a more comprehensive view of the ethics question e.g. to include responsibilities of the board to uphold and protect the reputation and mission of the organization, and strengthening the language around compliance monitoring e.g. briefly explaining how the Code of Ethics fits into the annual performance review and auditing process. 

ABA Egypt Compliance with the Universal Standards in Dimension 2 and 6
This presentation gives a practical overview of the systems and processes that ABA Egypt has put in place to comply with each essential practice of Dimensions 2 and 6.

Opportunity Bank Serbia: Implementing a strategic plan for SPM
The case of Serbian bank Opportunity Bank J.S.C. Novi Sad (OBS) highlights how an institution can implement a strategic plan for SPM in order to avoid mission drift.