A reader recently sent in a governance challenge that she is undergoing and we agreed that I would respond to it in this column. Here goes:

I serve on a board of a local non-profit founded decades ago by a foreigner who set up similar organisations in a few other countries. A global board, that sits in the founder’s home country, provides the apex oversight role, and is also charged with both fundraising and disbursing the funds to run projects and operations in the various countries. The challenge we face is that the founder does not seem to want to grant autonomy to the Kenya board. She bypasses the board and engages the CEO and department heads directly passing down instructions and granting capital expenditure and hiring  approvals even to hire and start capital expenditure projects.

We fear that the conduct of the founder and global board coupled with the fact that the local board does not have sight of the funds available to the Kenya organisation might hamper the realisation of our new draft board charter as well as the organisation’s strategic plan. In your opinion, is this external interference or a display of the founder syndrome? Secondly, without appearing disrespectful or entitled, how can we retain governance independence and strategically push back, as we demand for transparency?

Dear reader, I will give you two answers. The first will be the politically correct one. The second answer will be the vitu-kwa-ground reality answer. Many not for profit organizations are created by founders very much like businesses set up by entrepreneurs.   The founder sees a gap that needs to be served in a community and creates a special purpose vehicle through which he can raise funds from various donors in order to run the programs to serve that need. As donors want to ensure that their funds are not being used to fund illegal activities, they typically like to see a board set up to provide the correct level of monitoring and evaluation of the organization’s programs and utilization of funds.

If the organization is set up as a non-governmental organization, then it has to get a license to operate by registering as an NGO under the NGOs Coordination Board, a parastatal that regulates the NGO sector. Some founders avoid registering as an NGO because it means you fall within the purview of state oversight, and who wants a hot and angry regulator breathing over your neck? So they then register as private companies limited by guarantee under the Companies Act.

Now it starts to get interesting. A director under the Companies Act has a whole bunch of fiduciary and statutory duties to perform. But this is the oxymoronic challenge of setting up a not for profit organization under a framework of for-profit entities.  Directors are required to be active in their oversight. They are personally liable if things go pear shaped. So they have every right to ask the hard questions from management about sources and utilization of funds. Therefore the politically correct answer is that yes,  a founder of an NGO is exactly like a founder of a business and will definitely suffer the same level of founder’s syndrome, which is inability to release the controlling reins of the organization to others. She should be approached and reminded about the responsibility of board members as is (hardly) documented under the NGO Coordination Act or as is significantly articulated under the Companies Act depending on how your organization was constituted. Once you speak to her about the statutory responsibilities of the board members, she is bound to change her ways and walk towards the governance light.

Here is the vitu-kwa-ground answer: You’re up a founder’s creek without a paddle, my friend. You and the rest of the board were appointed to tick a governance box, both for local regulatory requirements and to give hope to external donors up the group food chain. Yes you can push back and ask for transparency, but truth is, you’ll probably be regarded as a “sumbua” person, someone disturbing the peace that is currently prevailing. You’re asking too many questions when the founder has been running this organization even before you knew how to spell the word governance. You will quietly be asked to leave, or your board appointment will not be renewed at the point of expiry.

Assuming you are registered as an NGO, you could try and pull a palace coup and go to the regulator to complain, in fact even write the very words yourself which the regulator will use to write to the CEO to talk about ongoing governance malfeasances. But pulling that grenade pin has some dangers. Firstly, you may have to make it worth someone’s while over at the regulator to write such a letter. What that while is, well, you’ll figure that out. Secondly, folks are not dumb. The CEO will find out that you wrote the letter, speak to the founder and then you’ll be back to the ‘sumbua’ finding and its terminal results. Just as the good book says that this world is not our home, neither is that organization your home. It belongs to someone else. You have to make a painful call whether you want to fight the good fight, keep the faith and finish the race or bail out while retaining both your dignity and sanity. Over to you.

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