Master Thesis
The Road to Transparency –
A case study in the non-governmental sector
Author: Ankie Elisabeth Norder
S2196662
University of Groningen
Faculty of Economics and Business
The Road to Transparency –
A case study in the non-governmental sector
Author:
Hetty (A.E.) Norder
Student Number:
2196662
Contact Details:
Croeselaan 277Bis
3521 BS Utrecht
+31 6 30 75 34 51
a.e.norder@student.rug.nl
University:
University of Groningen
Faculty:
Faculty of Economics and Business
Master:
MSc Business Administration – Organizational and
Management Control
Supervisor:
Prof. Dr. D.A. de Waard
Co-assessor:
Daan Tavenier
Supervisor at internship:
Confidential
Word of thanks
At the moment you are holding my master’s thesis about transparent reporting and impact measurement in the NGO-sector. This graduation project was the final project of my master’s, which I can say, was a challenging project. Together with handing in this thesis, I am finished with my five years of studying at the University of Groningen. All in all, I have had an amazing time in Groningen, I developed myself and I feel I am ready for a next adventure, however I am not sure what this ‘adventure’ will be. Since this is my final project of the University of Groningen, I would like to take the opportunity to mention some of the people whom have been important for me during my studies, and especially during this graduation project. First of all, I would like to thank my best friend, Linda Grondsma, who made my time in Groningen unforgettable; thanks for being my best ‘study-buddy’ as well as my best friend. Second, I would like to thank the internship organization, who created the opportunity for me to do my graduation project at this NGO. A special thanks to my supervisor at the case company who introduced me to several colleagues and people from other non-profit as well as for-profit organizations. Due to confidentiality reasons, I cannot explicitly state their names here. However, without these people, I would not be able to collect my data and acquire the necessary background information on the topic. In addition, I would like to thank all interns at the case NGO who made my graduation project interesting, thank you for the continuous support and fun we had together.
Third, I would like to thank my supervisor of the University of Groningen, Dick de Waard, who guided me through this project. Thank you for answering my questions, being able to have Skype-meetings and providing me with helpful feedback on my work.
Fourth, I would like to thank my parents, Harro and Margriet Norder, my brothers, Sietze and Jalte, and especially my sister, Willeke. Without the support of my family, I would not be able to graduate: thanks for always believing in me and helping me whenever possible! I want to emphasize a special thanks to my sister again who had the time to read my thesis, being critical, answering my questions and helping me throughout the whole process; thanks for all the effort and hours you put in my thesis.
Lastly, I would like to thank one person who knows he supported me throughout my graduation project, due to confidentiality reasons I cannot mention his name; I appreciated the time you put in this project. And thanks to you: all my readers, I hope you enjoy reading it!
Hetty Norder
Summary
The rationale for this study is ‘De Transparent Prijs’, a benchmark initiated by PricewaterhouseCoopers (PwC), which encourages transparency within the reporting of the non-governmental sector and social enterprises. Research till now has focused on the advantages and disadvantages of transparency, and on the reluctance of being transparent. However, little research has focused on how to maximize transparency, especially in a non-governmental organization (NGO). Therefore, this study investigates the topics transparency and impact assessment in NGOs. By conducting a case study in a Dutch NGO, the study tries to find ways how transparency towards the organizations’ (internal and external) stakeholders can be improved by ensuring impact of the projects the NGO has. In order to find answers to the research question (addressed in chapter 1), data is collected in interviews with several organizations (in the case NGO, in NGOs comparable with the case NGO and in for-profit organizations). Based on several interesting theories for this study, questions for the interviews were developed. Interviews were conducted with employees from financial, marketing and communication, children’s rights and management departments. Outcomes show that transparent reporting can be improved by impact assessment. However, before this step can be made, this study indicated several other important findings. The findings of the study confirm that intrinsic motivation and willingness by the organization to act transparent are important conditions to be transparent. Therefore, transparency should not be seen as ‘checking a box’, instead, it should be culturally ingrained in the DNA of the NGO. A closely related aspect is the ‘fear’ of organizations to be transparent, which disables rather than enables the organization to be transparent. After the organization increased awareness about these points, and before impact assessments can be carried out, the following three steps have to be made. First, the organization has to define what the direction of a specific project, and the overall direction of the organization is – what does the organization want to achieve with specific projects? Second, the organization needs to identify how these projects can be reached – what are SMART1 indicators per project that are closely related with the overall direction of the organization? Third, the organization should find ways that indicate whether criteria are met or not – which measurements does the organization has to carry out in order to know that goals are achieved? In line with this, the first important question the NGO needs to answer, is to what extent the NGO wants to be transparent and how the organization wants to implement this in their operations. Since during the interviews it became clear that this does not seem to be answered in detail by the NGO yet.
Keywords: transparency, transparent reporting, impact assessment, non-governmental organizations.
Table of contents
Word of thanks ... 3
Summary ... 4
1.
Introduction ... 7
2.
Study rationale – ‘De Transparant Prijs’ ... 9
3.
Theoretical framework ... 11
3.1 Stakeholder theory ... 11
3.2 Legitimacy theory ... 12
3.3 Transparency ... 13
3.3.1 A definition ... 13
3.3.2 Advantages and disadvantages of transparency ... 14
3.3.3 Impact assessment ... 15
3.3.4 Accountability ... 17
3.4 Impression management ... 17
3.5 Link from literature to development of surveys ... 18
4.
Methodology ... 21
4.1 Study setting ... 21
4.2 Data collection ... 21
4.2.1. Primary source of data ... 22
4.2.2. Secondary source of data ... 23
4.2.3. Steps taken in data collection ... 24
4.3 Data analysis ... 25
4.3.1 Controllability, reliability and validity ... 25
4.3.2 Steps taken in data analysis ... 26
5.
Results – comparable NGOs ... 28
5.1 Annual reports ... 28
5.2 Interviews ... 28
5.3 Conclusion ... 29
6.
Results – case NGO ... 31
6.2 Annual report ... 31
6.2 Interviews ... 31
6.2.1 Transparency ... 32
6.2.2 Stakeholders and legitimacy ... 34
6.2.3 Impact of activities ... 35
6.2.4 Communication and presentation of reporting ... 38
6.3 Summary ... 40
7.
Discussion ... 41
7.1 Comparison with existing literature ... 41
8.
Conclusion ... 44
8.1 Theoretical and managerial implications ... 45
8.3 Directions for future research ... 46
8.4 Recommendations ... 46
9.
References ... 49
Websites ... 52
10. Appendix 1 ... 53
Survey for interviews at comparable NGOs ... 53
Introductie ... 53
Transparency ... 53
Stakeholders and legitimacy ... 54
Impact of activities ... 54
Communication and presentation ... 55
11. Appendix 2 ... 56
Criteria for analyzing annual reports of comparable NGOs ... 56
Transparency ... 56
Stakeholders and legitimacy ... 56
Impact measurement of activities ... 56
Communication and presentation of reporting ... 57
Impression management ... 57
12. Appendix 3 ... 58
Survey for interviews at case NGO ... 58
Introductie ... 58
Transparency ... 58
Stakeholders and legitimacy ... 59
Impact of activities ... 59
Communication and presentation ... 60
13. Appendix 4 ... 61
Criteria for analyzing annual report of case NGO ... 61
Transparency ... 61
Stakeholders and legitimacy ... 61
Impact measurement of activities ... 61
Communication and presentation of reporting ... 62
Impression management ... 62
14. Appendix 5 ... 63
Surveys for interviews at for-profit organizations ... 63
Open questions: ... 63
Closed questions: ... 63
15. Appendix 6 ... 65
Answers to analysis of yearly reports ... 65
16. Appendix 7 ... 66
Answers to interview questionnaire – comparable NGOs ... 66
17. Appendix 8 ... 68
1. Introduction
Transparency is a topic that is gaining a lot of attention nowadays and is developing into a strong international norm. This has been ascribed mostly to rising globalization (Florini, 1999). Bauhr & Nasiritousi (2012, p. 9) describe transparency as “a cure for corruption and an important precondition for good governance, economic growth and effective environmental policies”. Transparency is not only of great importance in businesses and governments; also in NGOs increasing demand for transparency has been observed (Burger & Owens, 2010; Marshall et al., 2007). On the one hand, scholars have shown that transparency results in stakeholder engagement (Burchell & Cook, 2013; Hess, 2007). On the other hand, however, researchers have indicated that transparency makes problems more visible, which may work counterproductive for an organization (Bauhr & Nasiritousi, 2012).
In the last fifty years the NGO-sector has expanded immensely (Ossewaarde et al. 2008). Moreover, NGOs are becoming increasingly important in development and world politics; they exert their power on and influence every aspect of international relations and policy makers (Conway et al., 2015; Drabek, 1987; Lehr-Lehnardt, 2005; McGann & Johnstone, 2005). Therefore, transparency is not only a key issue in governments and businesses, but is increasingly relevant in the NGO-sector as well (Burger & Owens, 2010). Since the public considers the NGO-sector as the charity sector, stakeholders rate the non-governmental sector higher on trustworthiness than governments or businesses (Logister, 2007; Melendéz, 2001). The creation of trust within the environment of NGOs, is essential and a crucial element in enhancing transparency in the NGO-sector (Dagiliene et al., 2014). Without the trust of stakeholders, NGOs are less capable of surviving, since they are dependent of the support of their stakeholders (Dagiliene et al., 2014). A process that helps creating and improving trust within the organizations’ environment, is reporting about Corporate Social Responsibility (CSR) (Dagiliene et al., 2014). Although CSR is a voluntary activity, presently CSR is becoming an issue that gains increasingly attention, and is adopted by more and more organizations in the worldwide marketplace (Arena et al., 2014; Tata & Prasad, 2014; Thijssens et al., 2015). With CSR, organizations show that they are responsible and accountable for their actions, and be aware of the impact they have on the society and environment (Tata & Prasad, 2014). Despite this, transparency in the NGO-sector still seems to be low (Lehr-Lehnardt, 2005). For instance, Burger & Owens (2010) argue that the NGO-sector is still reluctant to share their information and some NGOs even refuse to take steps in being accountable. Moreover, McGann & Johnstone (2005, p. 160) describe the NGO-sector as currently being in “a crisis of accountability and transparency”.
Investigating the processes that ensure higher transparency in NGOs, as well as investigating ways in which to increase transparency of NGOs towards stakeholders is therefore of great importance. Along this line, Conway et al. (2015, p.1092), have emphasized “the need to identify and enhance our appreciation of the factors that are crucial to understanding and prioritizing accountability relationships and designing appropriate responses in NGOs, especially in charities and social welfare organizations”. Acknowledging the strong relation between accountability and transparency (transparency through honest reporting of resources and outcomes results in effective accountability (Conway et al., 2015)), again shows the need to investigate transparency in the NGO-sector.
This study aims to respond to this research gap on transparency in the NGO-sector. By conducting a case study of a Dutch NGO, this study identifies ways in which this particular NGO can maximize its transparency towards its stakeholders, within the possibilities and boundaries of the international umbrella organization. Following from that, the research question this study will address is:
Which mechanisms can the NGO use to optimize its transparency towards its stakeholders, while ensuring accountability of the impact of their projects worldwide, considering its current way of
reporting (i.e. annual report)?
The findings of this study are expected to give an example of transparency of NGOs, and can be of managerial value in understanding similar situations in other (comparable) NGOs. In addition, this research will add to the current body of knowledge on this topic, by gaining insight in ways to increase transparency and building strong relationships with the NGO’s public.
2. Study rationale – ‘De Transparant Prijs’
As mentioned previously, NGOs operate in a sector that is valued higher on trust than governments or businesses (Logister, 2007; Melendéz, 2001). Therefore, stakeholders ask themselves where their money ‘goes’, and are critical about the way in which the organization operates and presents itself towards the outside world (De Transparant Prijs, Maatschappelijk Resultaat 2015). Moreover, scholars have argued that increasing attention has been paid to the reporting of corporate social activities (Arena et al., 2014; De Transparant Prijs, Maatschappelijk Resultaat 2015; Tata & Prasad, 2014). Because of this, PwC in the Netherlands designed a benchmark called ‘De Transparant Prijs’ in 2003. The benchmark is an initiative that aims to encourage transparency within the reporting of the non-governmental sector and social enterprises.2 It identifies which of the participating organizations in the Netherlands is the most transparent in its reporting.
Since this year a shift has been made from focusing on the annual report of organizations only, towards a focus on websites and additionally focusing on the annual report. According to the project leader of the ‘Transparant Prijs’, “Gradually the ‘Transparant Prijs’ became a competition for the ‘most beautiful
annual report’. The organizations polished their reports, and illustrated them with pictures and storytelling, which is not the aim of the benchmark. Since relevant issues should be addressed on the website as well, we decided to focus on the website first, and secondly focus on the annual report. Besides, we want to adopt a stakeholders’ view; an ‘average’ stakeholder takes a look at the website first, only the ‘real diehard’ will take a second look at the annual report. That made us decide to look at an organization’s website first, and additionally at the annual report, as there should still be consistency between these two” [Interview project leader translated from Dutch by author].
The most important goal of the ‘Transparant Prijs’ is raising awareness about the impact organizations have on society.3 The benchmark gives NGOs and social enterprises the opportunity to show the Dutch public what they do and have accomplished throughout the year.
The ‘Transparant Prijs’ measures transparency on the following three aspects: compliance, impact4 and communication, the focus being on the ‘impact-score’ that represents 50% of the overall score, communication weighs 30% and compliance 20% (De Transparant Prijs, Beoordelingscriteria 2016). Determining the impact involves an analysis of the NGO within its environment, considering promises towards its stakeholders, identifying risks and the realized outcomes/effects the NGO had on its environment. Evaluating the communication focuses on vulnerability, storytelling, readability, structure, compactness (shortly and simple), timeliness and accessibility of reporting towards the NGO’s public. Lastly, assessing compliance involves criteria such as strategy, mission, vision, finance, communication with stakeholders, and relation with the NGO’s international organization (De Transparant Prijs,
2 www.pwc.nl, assessed on 25th of March 2016; 3 www.pwc.nl, assessed on 25th of March 2016;
4 The term ‘impact’ refers to responsibility of the impact and is defined as the outcomes/results of operations the organization
Beoordelingscriteria 2016). The score an organization receives is divided by an A/B/C-rating. An A represents at least a score of 75%, a B shows a score in between 55% and 75%, and a C presents a score below 55% of all achievable points (De Transparant Prijs, Maatschappelijk Resultaat 2015).
According to PwC: “Results cannot be achieved without having a clear dream, vision and mission that affect and connect people. A clear strategy with a focus to create impact, is needed to realize this dream. Therefore, with this triangle – dream, strategy and impact – lies the core of NGOs and their reporting” (De Transparant Prijs, Maatschappelijk Resultaat 2015, p. 5).
3. Theoretical framework
This section starts with the base for this research: stakeholder theory. This theory is fundamental, since stakeholders are the most important actors for an NGO. Consequently, NGOs need to legitimize their work towards their stakeholders. Therefore, the legitimacy theory will be presented in this chapter as well. With these theories in mind, the topic transparency is discussed in more depth: a definition of transparency is given and advantages and disadvantages are discussed. Then, the term ‘impact assessment’, the leading aspect of the ‘Transparant Prijs’, is introduced. In this section, accountability is assigned as well, because this is closely related with transparency. Finally, the topic of communicating transparency to the public is addressed, by explaining the term ‘impression management’.
3.1 Stakeholder theory
Organizations should commit to their stakeholders with reporting about their activities (Global Reporting Initiative, 2002). Therefore, organizations should adopt a complete stakeholder perspective and involve stakeholders within their reporting, since listening to stakeholders’ demands is crucial for an organization to survive (Emeseh & Songi, 2014; Hess, 2007). Moreover, the guidelines of the Global Reporting Initiative (GRI) (2002, p.9) state: “reports alone provide little value if they fail to inform stakeholders or support a dialogue that influences the decisions and behaviour of both the reporting organisation and its stakeholders”. Identifying topics that are of high importance for stakeholders, and addressing them in annual reports is necessary. A materiality matrix helps identifying these topics, according to the interest of the stakeholders and the interest of the organization (see Figure 1).
Figure 1: Materiality Analysis (De Waard, 2014)
stakeholder and the organization, these should all be addressed in the annual report. Topics placed in the light blue area of the diagram can still be discussed, although they should not be the main focus of reporting and thus should be discussed in a smaller portion.
Today, a shift in stakeholders’ demands has been made from asking for purely financial disclosure towards reports that include more environmental and social issues, which are often addressed in the form of a sustainability report (Adams, 2004). A relation between stakeholder theory and sustainability reporting has been shown by other authors as well. The starting point of a sustainability report is stakeholder engagement, which supports a dialogue between the organization and its stakeholders about the correct way the organization should behave (De Waard, 2011; Emeseh & Songi, 2014; Hess, 2007). Organizations are obliged to involve stakeholders in their reporting, since stakeholders are essential for the organization to survive, and therefore have the right to be informed of the issues the organization faces (Emeseh & Songi, 2014). However, Adams (2004) claims that some organizations fail in implementing stakeholders perceptions, for example due to unwillingness to disclose negative information, which results in in-complete reports, other authors still emphasize the importance of stakeholder engagement. Organizations implementing stakeholder dialogue, may increase their transparency through improved disclosure (Hess, 2007; Marshall et al., 2007). Since optimizing transparency seems to start with stakeholder engagement, this is a relevant theory, and provides the basis for this study. The following section will discuss a closely related theory, the legitimacy theory, which presents how and why organizations should behave appropriately within their environment.
3.2 Legitimacy theory
Alongside the stakeholder theory, legitimacy theory is an important concept in this study. These two theories overlap and reinforce, rather than compete, with each other (Emeseh & Songi, 2014). Stakeholders represent the public of the organization, which is part of the society. An NGO needs to be legitimate towards its public, by gaining permission of their operations, a so called ‘license to operate’ (Brown & Deegan, 1998). This can be seen as fulfilling a contract between the NGO and the society, where the ‘service’ is accomplished for a pre-specified price (Edwards & Hulme, 1995).
Ossewaarde et al. (2008, p. 43) define legitimacy as “a generalized perception of assumption that the actions of NGOs are desirable, proper or appropriate within their institutional environment”. Past research has shown the interconnectedness between legitimacy and transparency: it is often assumed that transparency improves legitimacy, since transparency can reduce uncertainty which makes it more likely that the public agrees with the system as being ‘correct’ (Bauhr & Nasiritousi, 2012; Edwards & Hulme, 1995). This makes it important for an organization to be transparent about their activities that have positive as well as negative effects on society (Luckerath-Rovers et al., 2015).
from them (Conway et al., 2015; Ossewaarde et al., 2008). However, the institutional environment of organizations is constantly changing, requiring the organization to remain responsive in their reporting to their environment (Brown & Deegan, 1998). Lister (2003) distinguishes four types of legitimacy when responding to the NGO’s stakeholders: regulatory, pragmatic, cognitive, and normative legitimacy. These overlap slightly with the three different types identified by Ossewaarde et al. (2015): regulatory, cognitive, and output legitimacy. NGOs can use different strategies in order to stay legitimate and act in a desired and appropriate way, however, little empirical research has been conducted on the specific use of strategies for NGOs’ legitimacy (Ossewaarde et al., 2008). Based on the previously indicated types of legitimacy, this study adopts the idea of legitimacy according to the following types:
1. Normative legitimacy: achieve congruence between values of the NGO and values of the stakeholders (Lister, 2003; Ossewaarde et al., 2008);
2. Regulatory legitimacy: act conform the (international) law and requirements of the country an NGO operates (Ossewaarde et al., 2008);
3. Cognitive legitimacy: achieve congruence between cognitive models of stakeholders and the organization (Lister, 2003; Ossewaarde et al., 2008);
4. Output legitimacy: achieving accountability of the NGO’s actions towards its stakeholders, through for example transparency (Ossewaarde et al., 2008; Slim, 2002).
Legitimacy in the form of these four types should be followed by NGOs so that they can fulfil the contract organizations have with society and stay legitimate (Edwards & Hulme, 1995). When organizations report in a transparent way about the impact their activities have, legitimacy towards society is enhanced (Deighton-Smith, 2004; Edwards & Hulme, 1995; Lehr-Lehnardt, 2005). Altogether, this paragraph emphasized the importance of legitimacy of organizations, showed the relationship between transparency and legitimacy, and thus the need for an NGO to adopt transparent reporting within their organization in order to stay legitimate.
3.3 Transparency
As presented before, transparency is useful when listening to stakeholders’ perceptions and enhancing legitimacy. However, what is exactly meant with the term transparency and how can this be obtained by organizations? The following section will explain the topic transparency in more depth.
3.3.1 A definition
is relevant for evaluating institutions”. This is in line with Nelson (2001) his description of transparency seen as a process that makes information accessible, visible and understandable, which enables others to evaluate the performance of the organizations involved. The others, are specified as the organizations internal and external stakeholders who are interested in the state of the organization through its reporting (Marshall et al., 2007). This study uses the following definition of transparency, based on the definitions above: as something that releases information that is relevant for evaluating organizations by its internal and external stakeholders. In that broad definition, this study follows the idea of regulatory transparency, a term introduced by Kosack & Fung (2014). They identified four varieties of transparency, by two different dimensions of transparency: the targets and the users. The four different varieties of transparency that arise are: freedom of information, transparency for responsible corporate behavior, regulatory transparency and transparency for accountability. As said, the current study focuses on ‘regulatory transparency’, since the focus is on providing information to the public, such as financial and non-financial disclosures. In financial reporting, transparency is an element that should be wished for (Barth & Schipper, 2008). As well as the importance of transparency in financial disclosures, transparency is an essential condition in the disclosure of non-financial issues (Dubbink et al., 2008). Therefore, transparency is something to aim for throughout all activities of the organization. Instead of checking boxes and presenting documents that are asked for by the public, transparency has a deeper meaning and should be culturally ingrained in the DNA of an organization (Morino, 2010).
3.3.2 Advantages and disadvantages of transparency
As mentioned earlier, the majority of past research on transparency has investigated the relevance of transparency in government and businesses, where both advantages and disadvantages of transparency have been identified. Since the non-governmental sector is increasing in world politics, the demand for transparency does not only exist in government and businesses, yet also in the non-governmental sector (Burger & Owens, 2010; McGann & Johnstone, 2005). On the one hand striving for transparency can be advantageous, but on the other hand it can be disadvantageous and comes with difficulties (Florini, 1999). This section will provide an overview of the advantages and disadvantages that come along with aiming for transparency.
support of their stakeholders (Burger & Owens, 2010; Dagiliene et al., 2014; Melendéz, 2001; Morino, 2010). Finally, another advantage of increased transparency is an improvement in the legitimacy and accountability of organizations (Auld & Gulbrandsen, 2010; Bauhr & Nasiritousi, 2012; Conway et al., 2015; Dubbink et al., 2008; Hess, 2007; Lehr-Lehnardt, 2005).
Apart from these advantages, some authors argue that transparency can be disadvantageous and comes with difficulties, which may influence the organization negatively instead of positively. An increased amount of transparency in reporting makes decision-making discernable, however, this might be different from expectations of the public. Therefore, enhanced transparency, makes problems more visible, conflicts with unmet stakeholders’ demands and can be used ‘against’ the organization (Bauhr & Nasiritousi, 2012; Dubbink et al., 2008). Dubbink et al. (2008) identify several disadvantages of complete transparency in relation with CSR reporting. Measuring the impact of activities organizations have on society cannot always be expressed quantitatively, it is seen as a process instead of presenting ‘raw’ numbers (De Transparant Prijs, Maatschappelijk Resultaat 2015). Therefore, a detailed presentation of outcomes of CSR activities can be problematic and costly (Dubbink et al., 2008). Furthermore, providing excessive information to an organizations’ stakeholders can be inefficient since stakeholders are overloaded with material, which makes it difficult for them to select the relevant information of the organizations reports (Dubbink et al., 2008).
As presented in this section, being transparent can be advantageous for an NGO, but it can come with difficulties as well. Unfortunately, the disadvantages are outweighing the advantages, since research has indicated that NGOs are still reluctant in being transparent. A possible reason for this is feeling of pressure of the public and meeting unexpected demands of stakeholders, which makes organizations withhold information (Conway et al., 2015; Ossewaarde et al., 2008). These days, transparency is seen as something negative and inefficient in the NGO-sector, and can sometimes even be used as a tool for punishment (Morino, 2010). Along this line, McGann & Johnstone (2005) state that standards and models about transparency in the non-governmental sector can help NGOs to be more self-aware and effective, which can help to overcome the image of the NGO-sector as a vulnerable sector. Thus, one can see that a necessity exists to alter transparency into something positive: show its effectiveness and make it less scary to the non-governmental sector (Morino, 2010). Therefore, it is of great importance to obtain more insights into the ways to increase transparency in the NGO-sector, in order to find a balance in the right way and amount of transparency, so that it is used as an effective tool, without causing harm to the organization.
3.3.3 Impact assessment
demands for better impact evaluation has not only been expressed by the NGO-sector itself, donors emphasize the importance of impact assessment of activities performed by NGOs in reporting as well (Brigham & Hayes, 2013). Therefore, alongside financial aspects, the demand for non-financial disclosure is growing, which currently makes reporting about impact an important part of organizations’ reports. A focus on environmental impact existed already, however CSR has gained more attention nowadays, which makes impact organizations have on the whole society relevant as well (De Waard, 2011). Impact measures include social, environmental and economic performance of the organizations operations and should be effectively presented towards the organizations’ stakeholders (Gibbon & Dey, 2011; Hernandez & Hugger, 2016). Impact assesses long-term changes of interventions by organizations, which should not be confused with outputs or outcomes (Adams, 2001). As illustrated by Figure 2, when assessing impact an organization attempts to go further than measuring immediate results of interventions.
Figure 2: Theory of Change5
Research has been conducted on how impact can be assessed, and several impact assessment models are identified as useful in measuring impact. Two companies of the big four, KPMG and EY, developed a methodology to measure impact, which they call True Value and Total Value. These models identify the total value an organization has by correcting its profit with positive and negative outcomes on the social, environmental and economical aspects, expressed in earnings (KPMG, 2015; EY, 2016). Other tools for measuring impact of organizations in the NGO-sector and social enterprises are indicated by the New Economics Foundation (NEF), such as Social Return on Investment (SROI), Eco-mapping, Social Enterprise Balanced Scorecard and Social Accounting and Audit (SAA) (the New Economics Foundation, 2009). NEF also assists the organization to identify which tools are useful for the kind of impact (social, environmental or economic) organizations desire and how organizations can implement these.
However, impact can only be effectively assessed when the organizations’ strategy and goals are clearly formulated (Luckerath-Rovers et al., 2015; De Transparant Prijs, Maatschappelijk Resultaat). This makes effectively reporting about impact only possible when clear indicators are known about specific activities, and closely related to the mission of the organization. Besides, it is impossible to report about the impact of all activities of the organization, which makes it necessary to focus on topics that have high priority for stakeholders, mentioned with the materiality matrix in paragraph 3.1 (Luckerath-Rovers et al., 2015, de Waard, 2014).
5 Based on www.impactcentral.co.uk, assessed on 1st of June 2016.
Since impact assessment is gaining more attention, NGOs as well as their stakeholders, desire for better impact reporting. Several models and tools have been designed that can be implemented by NGOs to present the impact of their activities. Although the challenge remains which and how models should be implemented in order to meet stakeholders’ demands and thereby increase transparency.
3.3.4 Accountability
Past research shows the interconnectedness between transparency and accountability, when increasing transparency, accountability is enhanced too (Auld & Gulbrandsen, 2010; Bauhr & Nasiritousi, 2012; Conway et al., 2015; Dubbink et al., 2008). Brown & Moore (2001, p. 570) investigate the concept of accountability in international NGOs, and define it as “a strategic idea to be formulated and acted on by INGOs (International NGOs) with the goal of better understanding and achieving their strategic purposes”. Accountability includes many factors, such as reporting requirements, openness and demonstration of effectiveness and outcomes (Melendéz, 2001). Brown & Moore (2001) argue that when an organization makes itself accountable to its stakeholders, they will receive their support. However, the demands of stakeholders are different. For NGOs this implies they need to identify and choose which particular stakeholders are of importance for the organization, identify their demands and translate this in the mission and strategy of the NGO (Brown & Moore, 2001).
3.4 Impression management
Although Conway et al. (2015) argue that an organization may use impression management conscious or unconscious, it is relevant to understand how an organization can affect perceptions of stakeholders and stay legitimate. Therefore, it is not surprising that annual reports are seen as instruments of impression management (Arndt & Bigelow, 2000; Ogden & Clarke, 2005).
3.5 Link from literature to development of surveys
The theories outlined in the previous section are all in a way related to the topic transparency, and are thus relevant for this study. In order to test whether and how these theories explained in literature do exist in practice questions are developed. Some questions are used in the form of a survey during interviews, other questions are used as criteria to analyze annual reports of NGOs. These questions and criteria are arranged by different themes derived from the literature, within each theme, several questions are asked. The criteria for analyzing reports are mostly in line with the evaluation criteria of the ‘Transparant Prijs’ of PwC, however some additions are made based on literature. Table 1 presents the themes, and indicated some topics that are of importance within the specific themes, some examples of related questions and criteria are presented.6
Table 1: Summary of surveys Theme in
literature
Summary of most important aspects of the survey
Summary of most important criteria for analyzing the annual reports 1. Transparency Introduction: Introductory questions about
transparency, questions about the truth and a lie are asked, an example: when you don't say something,
you don't lie.
Definition: Does the interviewee agree with the
definition of transparency as established in the theoretical framework?
Transparency: Does the interviewee see the
importance of that transparent reporting? Do the positive outcomes of transparent reporting outweigh the negative ones? Does the interviewee believe that his/her organization reports transparent about their activities?
Mission and vision: Is the mission and vision of
the organization well formulated and it is clear why the organization exists?
Results: Does the organization report about
positive as well as negative results? Besides, does the organization report about evaluated results, based on the previously set goals?
2. Stakeholder & legitimacy theory
Stakeholder ranking: The interviewee is asked to
rank five groups of stakeholders from the least important to the most important stakeholder for the organization.
Stakeholder importance: Does the organization
depend on its stakeholders, and are organizations obliged towards their stakeholders to provide a yearly report? To what extent does the organization has to take stakeholder perceptions’ into account?
Stakeholder importance: Does the organization
report about stakeholders’ interest, for example by means of a materiality matrix? Is the organization aware of its environment?
Activities: Is it clear why the organization
engages in several activities? Does this relate with the organizations mission?
3. Impact measurement of activities
Mission and vision: Does the interviewee think that
the mission and vision are clear to everyone, and well formulated?
Transparency: Is it the organizations’ responsibility
to report transparent? Besides, is it relevant and possible?
Own organization: Is the interviewee content with
the degree of transparent reporting of the impact their organization has on society and environment? Is there room for improvement?
Impact: Does the organization report about the
impact it has with several activities? Are positive outcomes as well as failures identified?
Risks: Does the organization report about risks
they might face in the future, or experienced in the past? Are challenges formulated?
Future: Does the organization report about goals
and challenges they may face in the future?
4. Communication & presentation of reporting
Reporting: What is the goal of reporting?
Impression management: Does the interviewee
think that organizations in general use impression management in their yearly reports? Is it approved to use impression management strategies to shape the perceptions of stakeholders?
Own organization: Does the interviewee think that
his/her organization uses impression management strategies?
Communication: Is the annual report communicated well, i.e. no difficult terminology? Does the organization take the stakeholder along with their activities so that they feel involved?
Impression management: Is there a balance
4. Methodology
The business phenomenon of interest in this study is how NGOs can maximize their transparency, through improved reporting about the impact they have with their activities. The proposed study followed a theory development approach for a practical, qualitative case study that is conducted at a Dutch NGO. This section starts with a brief introduction of the case NGO, followed by a description of the data collection method and data analysis.
4.1 Study setting
The empirical part of this research consisted of a case study at a Dutch NGO, which is part of an international non-governmental mother organization (hereafter referred to as international NGO). The international NGO operates in many countries, where in some countries national committee operate.7 This study selected the Dutch NGO, and did not investigate the topic of research at other national committees neither at the international mother organization. The case NGO was selected for this study since they expressed the research need for this study; the case NGO aims to improve their reporting and accountability of the annual report, which might result in a higher position on the Dutch benchmark, the ‘Transparant Prijs’, in turn.
The international NGO strives for equal human rights in the world. Within this international mission, the case NGO has three core activities in the Netherlands, which are fundraising for Dutch and international projects, building partnerships with companies, and performing lobby activities. Of the total amount of funds raised by the case NGO, a substantial amount goes to the international NGO who allocates it over the international projects. Due to the non-governmental character of this organization, stakeholders want to know how their money is spend, to which projects their money goes, and what is achieved with the money collected. Transparent reporting, especially about the impact the case NGO has with their three core activities, is of great importance. Therefore, this study investigated whether and how this can be enhanced. The next section describes in detail how data for this study is collected.
4.2 Data collection
For this qualitative case study, primary and secondary sources of data were used in order to collect the data. Data was collected at the case NGO, and at four comparable NGOs selected for this study. These four other comparable NGOs were chosen according to a few criteria. First, they all participated in the ‘Transparant Prijs’ of PwC. Second, they were all ranked in a higher segment of the ‘Transparant Prijs’ than the case NGO (De Transparant Prijs, Maatschappelijk Resultaat 2015). Third, the researcher chose these NGOs in order to have a variety of different NGOs, which presents a representative set of other non-profit organizations.
The primary source of data was collected by conducting interviews at the case NGO and at the four comparable NGOs selected for this study. The secondary source of data was collected with the analysis of documents (i.e. annual reports of both the case NGO and comparable NGOs, and other documents), and the observations during meetings. Different types of data collection methods are adopted to provide stronger substantiation of constructs and hypotheses (Eisenhardt, 1989).
4.2.1. Primary source of data
The primary source of data was derived from interviews.8 Interviews were used to familiarize with the specific context of the case NGO. Interviewees were divided into three groups. The first group of interviews were conducted at the case NGO itself. Another group of interviews was conducted with employees of the other four comparable NGOs. The employees interviewed, both at the case NGO and comparable NGOs, were interviewed since they were all, content- or communication-wise, related to the development and design of the annual report. The employees interviewed worked at the financial, marketing and communication, children’s rights and management departments. A combination of interviews at several departments was important since they all looked from another angle to the topic of interest:
1. Financial department: these employees were relevant, since they were able to show the author were the information of the annual reports comes from, and how it was developed.
2. Marketing and communication department:
Marketers were relevant, because they were able to show how stakeholders were involved with the organization, and showed how stakeholders’ demands were met. This approach is used, since there was limited time to interview a representative amount of stakeholders, although that would have been a fruitful approach to identify stakeholders’ demands (Conway et al., 2015). Communication advisors were relevant, since they were able to inform about how information was communicated in the annual report towards the organizations its stakeholders.
3. Children’s rights department: these employees were interviewed, since they have a good overview of the projects carried out by the NGO. Additionally, they provide crucial input for the annual report.
4. Management department: managers and project leaders were interviewed since they had a good overview of the whole organization. Moreover, they were closely connected by the development of the annual report.
Apart from the different views the employees have on the topic of interest, the selected departments showed a connection to one or more topics of literature as well, which is presented in Table 2.
Table 2: Organizational departments linked to literature Topics of literature → Departments ↓ Stakeholder Theory Legitimacy Theory Accountability Impact Assessment Impression Management Financial V
Marketing and communication V V V
Children’s rights V
Management V V V V V
By interviewing several employees from the case NGO and comparable NGOs, differences and similarities were identified. The last group of interviews was conducted at companies who do not operate in the non-profit sector. These interviewees worked for example as accountants, (fund and asset) managers, or impact investment analysts. These interviews were conducted beforehand to gain more insight in the topic of this study. However, interviews in this group were also conducted at the end of the study to acquire more knowledge about impact measurement methods, to understand how these models work, and to identify which models could be adopted by the case NGO. In total, 20 interviews (10 at the case NGO itself; 4 at comparable NGOs; 6 at other companies) were conducted in order to collect data. All interviews were conducted with only one interviewee, except for one interview at a comparable NGO, this specific interview was conducted with three interviewees at the same time. The interviews had an average duration of 50 minutes, and were all conducted in March, April and May of the year 2016. All interviews were conducted in Dutch and thus recorded and transcribed afterwards by the author in Dutch. Three interviews were conducted by phone, of which one was at the case NGO, one at a comparable NGO and the last one at another for-profit organization. Directly after these interviews had been conducted, a summary of the interview was made by the author. The transcribed reports and summaries made it easier to code and analyze interviews in order to find solutions to the research question. Interviews were coded in Dutch as well; important quotes implemented in this thesis were translated in English by the author.
4.2.2. Secondary source of data
whether and how these models can be implemented in NGOs, and in which way this can enhance transparency.
Another source of secondary data was collected during several meetings in- and outside the case NGO. The researcher attended meetings about impact measurement in the non-governmental sector, and other meetings with for-profit organizations who explained their impact assessment model in more detail. During these meetings the researcher was able to acquire more background knowledge about issues related to transparent reporting, which were helpful to put the case NGO in the bigger picture and allowed for well formulated recommendations given in paragraph 8.4. Moreover, it the meetings gave the author more insight in the ‘struggle’ that other non-governmental organizations experience with impact assessment as well.
4.2.3. Steps taken in data collection
With regard to the interviews and the analysis of the annual reports, a questionnaire was developed. The questionnaire of the interviews was based on the literature, and the questionnaire of the annual reports was mostly based on the criteria of the ‘Transparant Prijs’ by PwC ((De Transparant Prijs, Beoordelingscriteria 2016).9 However, some additions were made in this survey, since not all topics covered in literature were mentioned in the criteria of the ‘Transparant Prijs’ as well, for example the topic impression management. The annual reports were analyzed before the interviews were conducted, and were analyzed according to the previously made questionnaire. First the annual reports of comparable NGOs were analyzed, followed by the interviews at comparable NGOs. Before the interviews were conducted, the interviewees received the survey via email in order fill out the survey and familiarize with the topics discussed in the interview. Since a 5-point Likert scale was used in the survey, it was easier for the researcher to organize and compare the outcomes. During the interviews, interviewees were able to provide more in-depth background information on the specific questions. Besides, the interviewee had the ability to provide an explanation to the questions asked.
Colleagues proofread the questionnaire before starting the official data collection. Additionally, the researcher conducted a trial-interview with another student to see whether the survey was well designed, which made it possible to detect errors and adjust some questions before the interviews were conducted at the NGOs. After the analysis at the comparable NGOs was completed, both surveys (one for the interviews and one for the analysis of annual reports) were, if necessary, revised to make them more suitable for the analysis at the case NGO.10 At the case NGO, the same procedure was followed. Thus, first the annual report was analyzed, followed by the execution of the interviews.
Interviews conducted at companies that operated in the for-profit sector where prepared for every
9 A summary of these questionnaires can be found in paragraph 3.5; the complete questionnaire for the interviews and analysis
of annual reports of comparable NGOs can be found in Appendix 1 and 2 respectively. The complete questionnaires for the interviews and analysis of the annual report of the case NGO can be found in Appendix 3 and 4 respectively;
10 The complete questionnaire for both the interview questions and the analysis of the annual reports at the case NGO is
interview separately. Mostly, questions were based on the questionnaire used for interviews at the NGOs, which was developed already. However, some questions were added or deleted, since the author wanted to receive extra background information on, for example, impact measurement. Therefore, suitable questions where made per specific interview.11
4.3 Data analysis
This paragraph will start by justifying for controllability, reliability and validity, followed by a brief discussion of the steps taken in data analysis.
4.3.1 Controllability, reliability and validity
Controllability, reliability and validity are the three most important research-oriented quality criteria that provide the basis for inter-subjective agreement (Aken et al., 2012). Controllability of the study was fulfilled by the author by writing down all research steps during the process, which made it easier to write the methodology afterwards. This made the study controllable; and is a prerequisite for reliability and validity (Aken et al., 2012). A study is reliable when the results are independent of characteristics, such as the researcher, respondent, instrument and situation (Swanborn, 1996). Adopting a standardization strategy minimizes the researchers bias; it uses clear procedures for data analysis, collection and interpretation (Aken et al., 2012). Therefore, the researcher used a survey with a 5-point Likert scale instead of using open questions only, which made it easier to focus and prevented deviation of the topics. Respondent reliability was enhanced by conducting several interviews in the case NGO. Besides, four interviews were conducted at other NGOs and six interviews were conducted at other for-profit organizations. Since several employees at different organizations were interviewed, respondent reliability was safeguarded. Instrument reliability is protected because three sources of evidence were used: interviews, documents and meetings. According to Aken et al. (2012) using multiple instruments is called triangulation and can remedy shortcomings and biases, of the instruments by complementing and correcting each other. Finally, the situation reliability is paid attention to since all interviews, except for one, were conducted with respondents of each group separately. Besides interviews were conducted at different times and days. The last research quality criterion is validity. Validity can be divided into construct validity, internal and external validity (Aken et al., 2012). Construct validity was improved in this study since the author used multiple research instruments. Moreover, the researcher aimed to think of alternative explanations instead of adopting one perspective in order to increase internal validity. Finally, external validity means that results are generalizable among other organizations or situations (Aken et al., 2012). Since interviews were conducted in different departments of the case NGO and other comparable NGOs, the researcher tried to enhance external validity.
4.3.2 Steps taken in data analysis
The method of Eisenhardt (1989) was followed in the analysis of the data. The annual reports of comparable NGOs were analyzed according to a previously made survey, in which criteria were created on a 5-point Likert scale. The outcomes of the survey could be easily arranged in Excel12, besides, the author noted additional comments per question in order to justify the specific answer chosen. After the analysis of the annual reports, interviews were conducted at all comparable NGOs of which the annual reports were analyzed as well. Due to the analysis of the annual reports, the author acquired additional (background) knowledge about the organization. Besides, the researcher was able to put several answers during the interviews in perspective, which made it possible to recognize whether the annual report and the perspectives of the employees were in line with each other. The results of the questionnaire were arranged in Excel as well. All interviews were recorded or summarized afterwards in the case of an interview conducted by phone, since all interviewees explicitly allowed recording. The next step in the data analysis was the transcription of the interviews. Since all outcomes were organized in Excel, it was possible to identify differences and similarities among this group of comparable NGOs. Along this line, the author wrote the results according to the outcomes arranged in the Excel and the topics identified in the theoretical framework. After the interviews at the comparable NGOs, the researcher noticed some topics that were to a greater extent important than expected beforehand. Therefore, some questions of the surveys for the case NGO were slightly changed, besides, some questions were added. The annual report of the case NGO was analyzed in the same way as the analysis of the comparable NGOs. Interviews at the case NGO were all recorded, except for one interview that was conducted by phone, afterwards all interviews were transcribed or in the case of an interview by phone, summarized. After all interviews were transcribed, the author coded the first interview. After the first interview was coded, the other interviews were coded according to the same coding categories. In total, fifteen coding categories were used and related to a topic identified in literature (Table 3).
12 Appendix 6 shows all outcomes of the analysis of the annual reports; Appendix 7 shows all outcomes of the surveys of the
Table 3: Coding categories
Topic of literature
Coding category
Transparency Importance of transparency
Transparency Liveliness of transparency in the organization Transparency Risks when being non-transparent
Transparency Internal transparency
Transparency Intrinsic motivation to be transparent Stakeholder and legitimacy theory/accountability Goal of reporting
Legitimacy theory License to operate
Accountability Balanced way of reporting
Impact assessment Ability to learn by the organization Impact assessment Understandability of vision and mission Impact assessment Possibility of impact measurement Impact assessment Impact measurement
Impact assessment Project evaluation
Impact assessment and transparency Impact measurement and its effect on transparency Impression management Disguising information
5. Results – comparable NGOs
5.1 Annual reports
In Diagram 1, the results of the outcomes of the analysis based on the survey (see Appendix 2) of the annual reports are presented. Every bar in the diagram represents a sub-category (identified from the literature) of the survey, and the NGOs’ score on the corresponding questions. Most of the reports (25% ‘completely agree’ and 58% ‘agree’) were clear in presenting their goals and evaluating how these goals were met. However, the reports explained in less detail whether stakeholders’ needs where taken into account, and how these were identified. The organizations expressed a difficulty or reluctance to report about the negative impact (failures or risks) they have with their activities. A few organizations found an equal balance in reporting challenges as well as successes. However, other organizations reported their successes in greater detail than their failures.
Diagram 1: Comparable NGOs, results analysis of annual reports
5.2 Interviews
Diagram 2 presents the outcomes of the interview surveys, divided in the same sub-categories as the questionnaire of the annual reports. All organizations see the importance of transparent reporting (70% chose ‘agree’), and try to report as much as possible about their activities. However, most interviewees still expressed their opinion that there is room for improvement.
Diagram 2: Comparable NGOs, results analysis interviews
0% 10% 20% 30% 40% 50% 60% 70%
Completely agree Agree Neutral Disagree Copletely
disagree
Transparency Stakeholders and legitimacy theory
Impact measurement of activities Communication
Impression management 0% 10% 20% 30% 40% 50% 60% 70%
Completely agree Agree Neutral Disagree Completely
disagree
Transparency Stakeholders and legitimacy theory
One frequently discussed topic is ‘the level’ of transparency in reports. Adopting a transparent way of reporting means disclosing sensitive as well as other, outcomes that do not harm the organization’s reputation, non-sensitive information. However, a few interviewees mentioned a ‘fear’ of being transparent about sensitive topics exists; instead of reporting about ‘lessons learned’ or challenges, these topics are concealed. The employees indicated the importance of reporting about sensitive topics:
“It is not okay to withhold sensitive information. If this is the case, we see it as a challenge and try to explain our decision-making even better towards our stakeholders.”
“When only presenting ‘good-news stories’ reports are unbelievable, which makes stakeholders suspicious.”
Although the annual reports did not specifically mention stakeholders’ needs, for example with a materiality matrix, the interviewees demonstrated how stakeholders were involved. One example given by the interviewees in this regard were regular mailings or meetings between stakeholders and the organization, yet these examples were not stated in the annual report. This shows a shift from the topic ‘stakeholders and legitimacy’ of the annual report (25% ‘completely agree’, 42% ‘agree’, and 33% ‘disagree’) to a higher percentage in the interviews (33% ‘completely agree’, 33% ‘agree’ and 33% ‘neutral’).
Most interviewees expressed their opinion that impact assessment is very important nowadays. However, the interviewees expressed a struggle to measure impact. For instance, measuring impact was considering something ‘vague’ and identifying indicators that measure impact was seen as difficult. Another challenge NGOs encounter is to what extent they contributed to a specific project and to what extent they can attribute it to their own efforts. Additionally, all participants emphasized the importance of regular evaluation of completed activities, and incorporation of lessons learned, which was believed to enhance the design and performance of future projects.
5.3 Conclusion
Overall, as stated by several authors presented in literature, transparency is a topic that receives more attention nowadays (Burger & Owens, 2010; Marshall et al., 2007). This was something the author also experienced during the field research. Among the NGOs a desire existed to provide, apart from pure financial disclosure, non-financial disclosure as well. Impact assessment is a topic that raised a lot of attention during the past years, as emphasized by an employee:
“Every organization is working on impact assessment; it seems a ‘hot-topic’ these days.”
6. Results – case NGO
This chapter starts with the presentation of the results of the analysis of the annual report of the case NGO. In addition, a comparison with the analyzed reports of the comparable NGOs is made as well. Furthermore, the results of the ten interviews conducted at the case NGO are given.
6.2 Annual report
Diagram 3 presents the scores of the case NGO on the analysis of the annual report. Comparing Diagram 1 and Diagram 3, the comparable NGOs scored relatively higher on the topics addressed in the survey then the case NGO. This was expected already, since the survey was mostly based on the ‘Transparant Prijs’ and the comparable NGOs were ranked higher on this benchmark. The NGO mentioned the term ‘transparency’ in its annual report several times; employees are aware about the need to be transparent, although it seems that there is room for improvement in the NGO’s reporting, which is why this study was done in the first place.
Diagram 3: Case NGO, results analysis annual report
The most important stakeholders of the case NGO were mentioned; however, their needs were not explained in the annual report. A brief description was given about the mission and vision of the NGO, and was in line with the projects and activities undertaken by the case NGO. However, reported outcomes were mostly successful, and impact assessment about projects were not identified. Overall, it seemed that the NGO was fearful to show their vulnerability to report about failures, negative impact or risks, which resulted in a very self-confident report with a lot of ‘good-news stories’.
6.2 Interviews
In this paragraph the results of the ten interviews are presented. The previous showed diagrams were based on a relative scale (the vertical axis shows percentages), and the diagrams from this paragraph onwards are based on absolute numbers. The vertical axes of the following diagrams present the amount
0% 20% 40% 60% 80% 100%
Completely agree Agree Neutral Disagree Completely
disagree
Transparency Stakeholders and legitimacy theory
of employees, and the horizontal axes of the diagrams represent the relevant questions indicated in the survey.13
6.2.1 Transparency
In total, nine people expressed the relevance of transparent reporting about all activities of the NGO (Diagram 4, question 4). However, only five people did agree that the NGO is reporting enough about its activities currently (Diagram 4, question 5). One employee even stated:
“There is a lot of room for improvement in the process of developing the annual report: I feel that the annual report is inaccurate guesswork and not based on consistent criteria.”
Diagram 4: Results interview questions 3-7, topic transparency
Interestingly, six employees agreed (partly or completely) with the question whether transparency ‘lived’ throughout the organization (Diagram 4, question 7): four employees disagreed or chose the option ‘neutral’. The researcher experienced some dissatisfaction by the employees about this question. Most employees expressed that colleagues tend to talk about transparency, however, when discussing several issues that can affect the organization’s reputation, suddenly transparency does not seem a topic of interest anymore. This is quite contradictory, and supported by an employee:
“We talk about transparency, but at the same time, I also doubt whether we really want to be transparent. We say we act in a transparent way, but what do we exactly mean with this? It seems like we are afraid, or only want to be transparent about the topics we want to tell.”
Another employee expressed dissatisfaction by saying:
“The term ‘transparency’ is quite lively, especially in relation with our new office, but we do not talk about transparency in the way I see it: what does the organization do and how do we spend the public’s money?”
Another closely related aspect, and frequently mentioned by employees during the interviews, is the degree of internal transparency of the organization between employees. Some employees argued that
13 The complete survey of the interviews can be found in Appendix 3.
0 1 2 3 4 5 6 7 3 4 5 6 7
everyone has his/her own job, and thus responsibilities, in the organization. However, other employees emphasized the importance of internal transparency between each other, by saying:
“When the organization is transparent, employees are also forced to act transparent, honest and open towards each other; if this is not the case, you cannot hold your colleague accountable for his/her behavior and criticize the way he/she works.”
In addition, someone else expressed a concern about the absence of internal transparency:
“It is my responsibility to make reports, however there is no colleague who asks me how I come to the results. It seems like they are not interested in the things I do, but they are content when the report is accepted. This way of working worries me sometimes, it is not transparent at all.”
Another employee argued that the emphasis is on the successes instead of the failures:
“Sometimes we talk about failures, however not in a great proportion. Besides, we really have to do something with these negative outcomes, we have to identify lessons learned and we have to explain this towards each other.”
Employees will only mention failures towards each other when the working environment feels safe enough to express this. However, this is doubtful and argued by an employee who stated:
“Since last year, we are also presenting our ‘failures’ to each other. The first time I did this, my colleagues came to me and said ‘wow, it is so brave of you to share this with us’. I was surprised by hearing this, since I feel safe to make other people part of my work. However, this reaction made me realize not everyone feels safe enough to share his/her failures with colleagues.”
Employees mention that it is not their responsibility to emphasize the importance of transparent reporting in the organization, they point at each other instead, and shift the responsibility to someone else. The awareness of the importance of transparent reporting and the consequent risks involved when not being transparent, does not exist. The term ‘transparency’ lives in the conversations, but does not, or in a limited way, live in the actions taken by the NGO and its employees. Since employees do not feel support throughout the organization, it is no one’s responsibility, which does decrease instead of increase the NGOs and employees’ willingness to be transparent.
