A critical analysis of corporate governance systems in charity organizations: A case of Christian Care

Abstract

The study focused its attention on analyzing corporate governance systems in charity organizations through a case study of Christian Care over the period January 2007 to June 2012. The desire to carry out this study was influenced by the fact there are some generic challenges that appear to face NGOs (including Christian Care) and related to for example, staff development, lack of skilled staff, limited financial and management expertise, limited institutional capacity, low levels of self-sustainability and isolation/lack of inter-organizational communication/ and/or coordination. Also of major concern was that, governance issues tend to haunt such organizations. Given such a scenario, the question then was, how well has Christian Care acquitted itself in this important area of governance? The researcher used key concepts of corporate governance to critically review literature on this subject from the great works by the King reports of South Africa, the Sarbanes Oxley Act of the USA, Combined Code of principles from the UK as well as the Cromme Code from the Republic of Germany. The study was also informed by the ontological debate of research propounded by Burrell and Morgan (1979) with a view to placing the qualitative research into perspective. A sample of 50 respondents comprising of management and staff at Christian Care was randomly selected. The study made use of a structured questionnaire that comprised of both closed and open-ended questions as an instrument to gather the data. The response rate was 78% and this provided an acceptable percentage to validate the findings in this research. Major findings in this study were that; there are no risk management strategies, the organization’s board of directors is not structured in a value adding manner, stakeholder rights are abused and the majority of board members are appointed by invitation, and there is no performance evaluation system resulting in the board becoming ineffective. The researcher recommended that Christian Care needs to lay solid foundations for management and oversight as well as promote ethical and responsible decision making to attract donors and improve corporate governance. Future research should focus on the effect of promulgating laws that enforce corporate governance rather than the current codes of best practices and guidelines that are not enforceable at law.