The Community Sector Employer’s Forum (CSEF) recently released report, ‘Tackling the ‘Shadow Employer’ Role’ aims to rectify the problematic relationship that often exists between Community & Voluntary Organisations (CVO) and statutory bodies in Ireland. In order to address this problematic relationship, the report calls for the creation of a framework for better coordination between the two parties.

Specifically, the report proposes that ‘an agreed framework be developed jointly between government and CVO and that this be applied to all funding relationships. The code would provide a clear and measured framework upon which individual funding arrangements would be based’. (p. 3).

At a time of ever dwindling government funding, this report is a welcome initiative for the sector, as it confronts a major obstacle currently standing in the way of CVO’s ability to govern effectively. As bad governance has a knock-on effect for the performance of the organisation as a whole, the importance of ameliorating CVO/statutory agency relations can be seen in plain sight.

According to the report, the core of the problem is ‘a blurring of boundaries between CVO and their statutory bodies, whereby the latter intervenes inappropriately in the operation of organisations they fund by directing what organisations can and cannot do as conditions of funding, at times resulting in actions by CVO directors that may be in breach of employment law and recommended good practice.’ (p.3)

More specifically, the report found upon consultation with a number of CVOs; ‘problems typically arise when statutory bodies issue directions about terms of employment, either as part of funding contracts or informally. Such action removes control from CVO Directors over areas for which they are legally responsible and liable and at times has pressed them to take actions which may be in breach of employment law and recommended good practice’. (p. 4)

In assuming the role of ‘shadow employer’, statutory bodies are playing a dangerous game. Whilst pushing governing bodies outside their legal remit is certainly not the primary objective for statutory agencies, according to the report it is persistent problem and so is no less damaging for the sector.  The repercussions for the board and its ability to govern effectively are significant. Such meddling in what should be the board’s responsibility leads to uncertainty whereby the role of the board is no longer clear.

Of the many compromising circumstances, the report found upon consultation with CVOs, reoccurring incidences of; ‘funders directing how cut backs should be applied so that Boards of Directors have no control or discretion over how to apply them’ (p.8) Further damaging the board, the report states that representatives from statutory agencies sometimes require a representative to sit on the board of the organisation they are funding. Although the representative only has ‘observer status’; their presence compromises the ability of the board to make decisions purely in the interests of the organisation.

The report found that inappropriate interventions such as this had a profound impact on the morale of CVOs, ‘giving rise to feelings of confusion, powerlessness, loss of control and a concern that they were unable to fulfill their legal obligations adequately. Underlying this was a fear that their position as independent locally responsive bodies was being gradually eroded and phased out.’ (p. 7)

According to the report, one reason for the persistence of this problem is due to the lack of an overarching government framework within which CVO/statutory agency relations can be monitored and regulated. Instead, individual government departments have developed their own systems of measurement and monitoring for the provision of funding. This ad hoc practice breeds inconsistency. Whilst this is not the only reason for the current difficulties at the interface of CVO/statutory agency relations, the report holds that it is a major contributing factor.

The current situation needs to be rectified. The limits of statutory agency intervention must be defined and clarity brought to the overall relationship between CVO and statutory agencies so as to protect good governance practices, accountability and the ability of CVO’s to continue providing vital services to the community unimpeded. To this end, the report has proposed the creation of a standardised code of practice which would serve as a common reference point for the two parties in all funding agreements. Amongst other provisions the code would detail; clarity of respective roles, provisions for reporting arrangements, mechanisms for solving disputes and arrangements for planned periodic review and revision.

This code of practice, the report states, ‘would address many of the problems currently experienced by CVOs but would also have wider benefits. A mutually respectful and partnership approach would maximise the resources of both government and CVO and ensure that they are combined to achieve common objectives.’ (p. 12)

The report is backed by a call for constructive dialogue which will be presented to the government. CVOs have been asked to sign this document in the hope that such pressure will force the Irish government to make the necessary changes. Changes which are needed in order to protect good governance practises and the valuable contribution CVOs make to our society.

To download the full report and the ‘Call for Constructive Dialogue’ document, go to: www.csef.ie/activities_and_news

Written by Sophie O’Brien.

Boardmatch Ireland communications officer