Governance & leadership
The board of any MFI plays a key role in deciding policy and guiding strategy. A board that is committed to the MFI’s social mission finds ways to put SPM into practice at all levels of the organisation.
Some MFIs may be lucky enough to have a board that is driving the social agenda, but others may not. So it’s really important to convince those involved in running the MFI, especially board members, of the value of SPM so that your MFI can reap the full benefits.
Here, we look at a number of issues around governance and SPM. And we’ll give you some guidance on how you can get your board fully engaged with the SPM agenda. There are ways to help the board clearly define and uphold your MFI’s mission and values. You can help them to ask the right questions when they review your MFI's social performance, so that ultimately, together, you will maximise your social impact.
What is governance?
By governance, we mean ‘the process through which stakeholders (including the board and executive management, and sometimes investors, donors, clients, and others) guide the MFI to protect the mission and assets’. There are four key elements of good governance: accountability, responsibility, fairness, and transparency.
What are the most common challenges?
- Getting the board to ‘buy in’ to SPM
- Clarifying the board’s SPM role and mandate
- Building your board’s capacity
- Assessing how your board’s composition can influence the SPM process
- Considering whether social performance committee is right for your MFI
- Understanding how your institutional type or strucutre might influence your SPM process
- Getting the right sort of leadership to coordinate the SPM process
- Understanding how transformation makes a difference