Boards: when a nonprofit needs to make tough decisions, do you have the right brains in the room?

The 'Nine steps' publication and supporting material is the third edition published to help sport and not-for-profit organisations from New Zealand to improve governance structures and processes. Its supported by Sport New Zealand

Web access with support material to download: Nine steps to effective governance - building high-performing organisations

Here I would like to focus on Board Needs. My experience reveals the importance of having a knowledgeable and engaged board, a board that understands its fiduciary role, its managerial role and depending on the type of institution its fundraising role. Boards members should have:

EXPERTISE: knowledge, skills, and experience
The initial challenge is to determine what relevant knowledge, skills and experience the board needs. The degree to which particular sets of knowledge, skills and experience might be required will depend on the business of the organisation, the challenges facing it and its specific current and prospective circumstances.

• It is preferable that all candidates will have some degree of governance experience and a basic understanding of board work.
• It is important for a board to include people who can understand: 1) an organisation's culture and what motivates the behaviour of those within it; 2) the economic drivers of its performance; 3) where its best growth opportunities lie; and the risks that it faces.
• Focus on what people will DO rather than what people ARE
• Emphasize diversity and demographic characteristics like gender, sexual identity, disability, age and geographical variables like nationality or location of residence..

INDIVIDUAL ATTRIBUTES
A second important selection factor is the set of attributes that relates to a person's ability to contribute and collaborate in a group decision-making context. Without personal attributes that assist an individual's knowledge, skills and experience to be taken up by the board, he or she is unlikely to add value as a member of the board.

• Independence - free to think for themselves
• Intelligence - ability to understand and be critically analytical
• Moral compass and integrity
• Good judgement and personal confidence -ability and courage to raise difficult issues
• Emotional intelligence - manage their egos, respect and be able to understand the needs and feelings of others
• Open mindedness and ability to challenge their decisions
• Outcome-oriented - more interested in impact than in process
• Motivation - they want to join the board for the right reasons 

photo: (*) Photosolde
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gender gap grows with age

 

"Gender gap in the Spanish labour market and its evolution through the life cycle". In this article Sara de la Rica analyses the gender gap.

The data (the sample are highly educated workers and full-time equivalents) explains:

• The gender gap increases with age specially until 30-34 years. From 15% in the hourly wages in 20-24 years old to 20% in 30-34 years old. After that, the gender gap is mainly constant.
• There is a lack of promotion in women at the age 30-34. The type of data can't explain if this is voluntary or a firm-decision.
• Women receive less in one of the two components of the salary: the variable part like bonus.

Access Journal (Spanish pdf): Revista de Ciencias y Humanidades (diciembre 2016)
Short video resume (Spanish 5minutes): gender gap

photo: (*) Photosolde 

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Policies tend to emphasize education and formal training. Most firms don't have strategies to optimize the gains from informal learning at work.

Andries de Grip professor of Economics and director of the Research Centre for Education and the Labour Market (ROA), School of Business and Economics in Maastricht University has written an article in the IZA World of labor, the independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues.

Some interesting points:

• In dynamic jobs, workers continuously face skills obsolescence. Workers who are employed in industries with high rates of technological change are better able to retain their productivity at an older age than workers in sectors that are less dynamic. Workers who experience skill obsolescence appear to learn more on the job and participate more often in training, which lowers the risk of employment loss. 

• The OECD’s Program for the International Assessment of Adult Competencies (PIAAC) measures the relevance of informal learning at the workplace in its member countries. Many workers report that informal learning at work—learning by doing or learning from supervisors or co-workers—is relevant for them on a daily basis, although there are large differences across countries.  The percentage of workers who are involved in learning by doing every day ranges from 12% in Korea to 53% in Spain, while the percentage of workers who learn new things from supervisors or co-workers ranges from 10% in Korea to 36% in Spain.  

• Recent studies find that much of the performance of newly hired workers is driven by learning by doing or learning from peers or supervisors in the workplace. Descriptive data show that workers learn a lot from the various tasks they perform on the job. Informal learning is far more important for workers’ human capital development than formal training courses. Most firms do not have adequate human resource management strategies to optimize informal learning in the workplace.

Access to the article (full article): Informal learning at work (2017)

photo: Chinese-American children in San Francisco, 1936. Alfred Eisenstaedt—The LIFE Picture Collection/Getty Images
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from "third sector" to "plural sector"

Henry Mintzberg born in Canadà in 1939 is an internationally renowned academic, author and researcher and professor of Management Studies at the Desautels Faculty of Management of McGill University in Montreal, Quebec, Canada.

He published an article in 2015 where he explained that a "A healthy society requires a respected public sector, a responsible private sector, and a robust plural sector".

He defended the name of "plural sector" instead labels like "nonprofit sector" or "third sector". In his opinion the name "plural" will help this sector take its rightful place alongside the other two (public vs private) and also help us to appreciate the unique role it has to play in restoring that balance.

Main ideas:

• Why "plural": The plurality of the sector: we can find cooperatives, foundations, clubs, religious orders, think tanks, activist NGO's, services NGO's, voluntary, social economy. He divides in four groups: mutual associations, benefit associations, protection associations and activists associations. There is a variety of this sector's associations and a wide range forms of ownership.
• Radical renewal: The plural sector has to lead the radical renewal "in communities on the ground, with groups of people who exhibit the inclination, independence and resourcefulness to tackle difficult problems head on".
• The plural sector has to leave form its obscurity. They have to have their own acts together, collectively, enabling pluralism but not dispersion of their efforts. It has to focus on its distinctiveness and partnership with each other.
• It's time to rebalance the power: Each sector needs to maintain sufficient influence in a society to be able to check the excesses of the other two.

Access full article (pdf): Time for the plural sector (2015)

photo: (*) Photosolde "The world begins with every kiss. photo-mosaic designed by Joan Fontcuberta"

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the effect of competition on the quality of health care

In 2016 Martin Gaynor with Rodrigo Moreno-Serra and Carol Propper were awarded the American Economic Association Prize for the best paper published in the American Economic Journal: Economic Policy in 2012-15.

In their article they examined the impact of the introduction of a pro-competition policy, in 2006, on hospital outcomes in England. They found strong evidence that under the regulated price regime hospitals within the NHS engaged in activities that increased quality of patient care.

The NHS reforms resulted in significant improvements in mortality and reductions in length of stay without changes in total expenditure or increases in expenditure per patient. .

In 2006 the NHS mandated that all patients requiring treatment be given the choice of five different hospitals (Choose and Book) and adopted a payment system in which hospitals were paid fixed, regulated prices for treating patients (payment by results based, PbR on DGR's). The reform gave patients more choice (via the mandated five alternatives and the end of selective contracting), increased the incentive for hospitals to win business and moved hospitals from a market determined price environment to a regulated price environment.

The introduction of competition can be an important mechanism for enhancing the quality of care patients receive even in a set up where hospitals are not profit maximizers. Attracting patients becomes very important. Given that price is fixed, the only way managers can do this is by undertaking effort to increase quality. The reforms made attracting patients tougher in less concentrated markets and so managers had greater incentives to improve quality in these markets. This increases managerial incentives to improve quality effort as competition grows stronger.

This is one empirical study on "yardstick competition (competence by comparison)" among health care organizations.

Access full article and data sets: Death by Market Power: Reform, Competition, and Patient Outcomes in the National Health Service (2013)

Related post:  some controversies about competition in health care

photo: (*) Photosolde
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health technology/expenditure relationship

The effect of insurance expansion on the diffusion of new technologies is not a well-understood phenomenon.

Burton A. Weisbrod published in 1991 in the Journal of Economic Literature: The Health Care Quadrilemma: An Essay on Technological Change, Insurance, Quality of Care, and Cost Containment. The Weisbrod proposition in his article is that the expansion in health care insurance produces a cost increasing in new technologies and how new technologies induces demand for insurance. There is an inexorable link between the broadening and deepening of health insurance coverage and the development of new health-care technologies.

Joan Costa-Font and Alistair McGuire  and Victoria Serra-Sastre published in 2012 The “Weisbrod Quadrilemma” Revisited: Insurance Incentives on New Health Technologies

In their study, they attempted to produce empirical tests of Weisbrod thesis and find supportive evidence. The paper presents evidence of a link between insurance and technology diffusion using OECD panel data and taking advantage of a dynamic specification structure. The empirical estimates indicate that higher degrees of private expenditure on health care correlate with higher levels of R&D in health care, consistent with the hypothesis forwarded by Weisbrod that increasing insurance coverage boosts technology adoption. However, their findings also suggest that increasing public funding of health care appears to lower technological adoption, which is consistent with the exercising of monopsony power and an objective of cost containment.

photo: (*) Photosolde
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Women 20 (W20): Gender disparities

Gender equality contributes to strong, sustainable and balanced economic growth.

At their summit in Brisbane in 2014, G20 leaders agreed to focus on gender equality challenges at the strategic level. They committed to ‘women’s full economic and social participation' to reducing the gender gap in participation by 25 per cent by 2025; and to bringing more than 100 million women into the labour force.

To make the world’s premier economic forum accountable for progress on this crucial front, the engagement group known as the ‘Women 20’ (W20) was created in early 2015.

Progress towards gender equality at work has been slow. Contrary to conventional wisdom, global rates of female labour force participation have stagnated, or even fallen, in recent decades.

This paper-brief seeks to inform the work of the W20 in expanding women’s economic opportunities. It begins by outlining the origins and objectives of the W20, then highlights the key gaps in economic opportunities for women and girls in G20 countries, identifying common challenges as well as distinguishing features and constraint

Main conclusions:

1. To close labour force participation gaps is to change legal rules and institutions that restrict women’s opportunities, and to review the scope for specific measures and investments to support the expansion of opportunities.
2. Governments should eliminate all legal discrimination against women and review policies to support their participation in the labour market, including investment in social infrastructure for the care of children and the elderly.
3. Governments can also lead by example, including by undertaking gender audits of their own workforces, and increasing the share of public procurement sourced to companies that meet specified gender criteria.
4. Private-sector leadership and innovation on gender equality are also needed to promote and support progress.

Research paper (2015) (pdf.) A Profile of Gender Disparities in the G20: What is Needed to Close Gaps in the Labour Market

photo: (*) Photosolde
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