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Hivos Supervisory Council Report 2016

Hivos has experienced a year of many new beginnings, in which the sharpening of strategy and internal organisation still called for considerable attention. In this first post-MFS year, the organisation was successful in attracting donors for its new programmes. During the year Hivos signed new contracts worth €134 million. At the same time as the organisation worked to put the new strategy into practice, the finalisation of the Strategic Plan was still ongoing. It was formally approved by the Supervisory Council (SC) in May 2016. The Strategic Plan 2016-2020 outlines what Hivos aims to achieve across its six thematic areas and 26 countries, as well as how its new role as social innovator is translated into different approaches. These approaches include scouting frontrunners and bringing innovations to scale through connecting stakeholders and influencing decision-makers.

In the rapidly changing political and funding context, Hivos must also change its organisational culture in order to be able to deliver results. The Business Plan 2017-18, approved by the SC in December, details what Hivos is doing to adapt its internal systems, processes and ways of working in order to become the flexible, entrepreneurial organisation it wants to be. Important factors such as financial resilience, relationship management, human resources, monitoring, evaluation and learning will be reinforced. The SC is impressed by the insights Hivos has gained during the past year and the changes it has already put in practice. Bringing the internal organisation fully in line with the new competitive environment and sharpening its view of Hivos’s value proposition as a social innovator will also be key assignments for 2017.

During 2016 the SC formally convened seven times, usually but not always in the presence of the Executive Board (EB). The SC’s activities were to a large extent concerned with the execution of its fiduciary supervisory role. The SC also served as a sounding board for the EB, particularly in relation to the organisation’s strategic outlook, partnering strategy, innovation, risk management and change management issues.

The SC also discussed Hivos’s governance structure. The EB seeks the right balance and interaction between controlling the organisation from the centre and placing responsibility and ownership at the regional level, while the SC monitors the checks & balances. It verifies whether legal entities fit into the chosen accountability structure, whether mandates and responsibilities are clear, and whether the EB has strong connections to stakeholders to ensure soft controls where formal authority is not directly available.

Based on the values of self-determination and participation, in its recent vision document Hivos presented the perspective of a decentralised organisation with a strong degree of ownership in the South. A pilot was held during the year involving the recruitment of country nationals for the boards of Hivos’s entities in South Africa, Zambia and Malawi. In South Africa, additional considerations led to the decision to transform the entity into a fully independent organisation.

The SC seeks to keep in touch with developments by engaging in frequent conversations with the Executive Board as well as holding a regular informal exchange with the international Management Team and the Global Office’s Works Council. For the second time the EB has organised a field trip for SC members to one of its regional offices. These trips allow SC members to see project implementation with their own eyes as well as meeting local staff and partner organisations, which is considered essential for fulfilling their supervisory role. In November 2016, several SC members visited Hivos’s East African hub in Nairobi to witness its work with cultural entrepreneurs and LGBTI organisations on local green energy projects.

We are pleased with the effective collaboration with the EB, which since February 2016 has consisted of Edwin Huizing and Sanne Nolst Trenité. The SC appointed Sanne as Director of Operations to succeed the previous Director of Programmes and Projects. This deliberate decision to put more emphasis on operational performance is already yielding results, such as greatly improved financial insight and management.

We also welcomed a new member to the SC. C.R. Hibbs is a professional based in Latin America and is well-rooted in the American philanthropic field. Our search for another international member of the SC is expected to lead to a new appointment in 2017.

The SC operates two permanent committees – the audit committee and the remuneration committee – to which it has delegated the preparation of specific tasks. The audit committee comprises two members, Marcel Karman (chair) and August Mesker. In 2016 the audit committee met several times and discussed a number of issues with the Executive Board and the controller: the management information, the 2017 budget, the control environment and the annual accounts. It also consulted the external auditor on the year-end and interim audit findings. The draft Board Report 2015 was considered at the April meeting and the audit committee was informed of the management letter in November 2016.

The remuneration committee consists of Anja van Gorsel (chair) and Jan Ernst de Groot (in September Jan Ernst de Groot was replaced on the committee by Johan van de Ven). The committee evaluated the functioning of the EB in its entirety as well as that of its two members individually. To that end, the remuneration committee held several meetings with the EB members to discuss the dynamic context of Hivos and the functioning and effectiveness of the EB members in this context. As input for these meetings, the committee actively sought and used the input from the other members of the SC, the Works Council and members of the management team, both in the Global Office and in the regions.

As detailed in the annual accounts, the EB members’ remuneration is in line with the Standards for Remuneration Act as well as with Hivos’s pay scales.

Following clarification of the findings by the external auditor, and taking into account the audit committee’s recommendations, the SC approved the 2016 annual accounts and discussed the annual report for 2016. The SC released the members of the Executive Board from liability for their executive duties over 2016.

The SC regularly evaluates its own functioning by way of a self-assessment. The main findings of this year’s reflection were a positive assessment of the SC dynamics and atmosphere, management responsiveness, the provision of timely and relevant information, and the functioning of the SC committees. The SC was not satisfied with the diversity of its composition and experience. It therefore aims to fill the Council’s vacancy with an international member, preferably female, with a background in LGBTI, environmental sustainability or the creative sector. Additionally, during 2016, the SC paid significant time and attention to Hivos’s values and what they mean in practice, for the organisation, for the SC, and for its individual members.

The unprecedented global tensions and challenges of 2016 have encouraged Hivos to pursue its objectives with renewed energy and determination. The organisation has been able to achieve significant progress and results. On behalf of the Supervisory Council, I would like to thank the Executive Board and all employees for their continued efforts towards Hivos’s objectives of a free, fair and sustainable world!

The Hague, June 2017
For the Supervisory Council,
Jan Ernst de Groot, chair

Members of the SC are entitled to a fee of €237 per half day for attending formal SC meetings. International members’ travel and accommodation expenses are fully reimbursed. The SC’s total expenses in 2016 came to €23,098.24 (of which €5,823.09 for attendance fees) compared to €30,968 in 2015. The 2016 expenses include SC members’ abovementioned visit to the East Africa Hub. In accordance with the guidelines of the Dutch Central Bureau on Fundraising (CBF) and the Dutch Good Governance Code for Charities and Cultural Organisations (‘Code Wijffels’), it was established that during 2016 none of the individual SC members held primary or additional occupations that were in conflict with their supervisory roles at Hivos.

 

 

 

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