Social Value UK

Tag: Governance

  • Impact Reports – Must Haves!

    Impact Reports – Must Haves!

    Ten things you should be looking for when reading an impact report.  A blog by Christina Berry-Moorcroft, Social Value UK Communications and Membership Coordinator.

    Here at Social Value UK we are incredibly proud of our Reports Database, at last count it had nearly 700 reports relating to social value in there for you to peruse and learn from. The reports database is made up of SROI reports, assured and non-assured, social impact reports and cost benefit analysis reports. So whatever sector you work in, whatever level of riguer you’re working at and whatever you need examples of, you can find it in one place. But, what if you’re not sure what you’re looking for, or at? We know that many people like to read impact reports before setting off on their own, so to make the process easier we’ve compiled a handy list of ten things you should be looking for. We hope it helps!

     

    What is it for?
    What is the report you are reading for? Who’s the intended audience? What are they hoping to communicate and/or achieve with this report? If this is immediately clear, then great, keep this in mind throughout the rest of the report. If it isn’t, then this may not be the end of the transparency issues…

    What has and has not been included?
    Have the authors been completely transparent about what has and hasn’t been included? Have they also explained how they came to their decisions about what was and was not material? At this point, it’s also wise to check that the report uses enough data, that it’s representative and that the authors have considered all possible biases. If a report isn’t inclusive of all of these things then there’s a fear the authors of the report are over-claiming, meaning they may be claiming the value of activities they were not a part of creating.

    Is this an output or outcome?

    What’s an outcome? What’s an output? What’s the difference? This can all too often be confused when people start measuring their impact but it’s vital that we aren’t claiming outputs as outcomes if we are to avoid over claiming. An output is a way of describing the activity in relation to each stakeholder’s inputs in quantitative terms, for example the staff who work on the project or the hours a volunteer put into the project. Outcomes are the changes resulting from an activity. The main types of change from the perspective of stakeholders are unintended (unexpected) and intended (expected), but more on that later. For now, ask yourself, has the report you’re reading made clear the difference between outputs and outcomes? We have produced some supplementary guidance on well-defined outcomes that will help.

    Who decides what?
    The Principles of Social Value provide the basic building blocks for anyone who wants to make decisions that take this wider definition of value into account, in order to increase equality, improve wellbeing and increase environmental sustainability. The first principle is the underpinning for all of the following six, and one that you must not forget when reading or writing an impact report! Principle One is Involve Stakeholders and we define stakeholders as people, organisations or entities that experience change, whether positive or negative, as a result of the activity that is being analysed. Were stakeholders involved? And importantly, were they involved in identifying and valuing outcomes? No two outcomes are equal to stakeholders, have the authors shown how they decided which outcomes were more valuable?

    What about stakeholder segmentation?
    Unless the only people impacted by your activities are the exact same in every way: age, gender, socio-economic status, health, relationship status, family set-up, and so on, and that’s highly unlikely, then not including stakeholder segmentation is a massive flaw. Segmentation is the process of looking at different groups of stakeholders, based on anything that makes them different from another group of stakeholders. Each type of stakeholder will have different outcomes, and indeed different valuations for those outcomes, and if the report you are reading hasn’t taken that into account then they could be over-claiming!

    Is it all positive impacts?
    The report you’re reading may be full of positive impacts, in fact we hope it is, we fully believe that measuring and maximising social value will lead to a more equal, more just and more sustainable planet for us all. However, every project, despite how great it’s theory of change is, will have negative impacts, it’s unavoidable. So has the report you’re looking at made allowances for that? Have they asked stakeholders what those were? Have they put measures in place to reduce these? Are they improving their work next time based on this? These are all questions you should be looking for the answers to when reading an impact report.

    And what about the change we didn’t mean to cause?
    Much like with point four, another key thing to look out for is whether the report lists the unintended outcomes of the project. If a report just states the intended outcomes, then they have only looked at, and asked stakeholders about the project objectives. This doesn’t give a full overview of the project, could be neglecting significant impact and is stunting future project improvement based on impact data. Examples of intended outcomes could be increased confidence, a secure job or reduced isolation, whereas as an unintended outcome could be that attendees on a course suffer a reduction in self worth for not doing as well as their classmates. That’s not to say that unintended outcomes are always negative, organisations often create lots of social value that they aren’t accounting for, listing unintended outcomes makes sure this isn’t happening and allows for project design based on all of the information.

    How much of this change can they claim?
    So the authors of the report have considered all of the outcomes, based on the opinions of their segmented stakeholders, they’ve looked at intended and unintended outcomes and considered both positive and negative change, that’s all right? Well, not quite. In order to not overclaim (Principle 5) and be transparent  (Principle 6) then the authors should have also calculated the likelihood of what would have happened to the stakeholders anyway, without their action and what other actors (organisations, people, interventions) may have played a part in the change experienced by a stakeholder. We call this considering the counterfactual and attribution. If 100% of a change is claimed it’s not only not true, it’s a little foolish and means the author is over-claiming, which means their project isn’t as successful as they claim it is, which means they are missing valuable opportunities to make it better!

    Is this important?
    Have the authors of this report demonstrated that they undertook a process of determining what information and evidence must be included in the accounts to give a true and fair picture? Some information is important is material and some is not, has this been considered? Enough information should be included so that stakeholders can draw reasonable conclusions about impact. On top of this, has the information been ranked with relative importance, and importantly, were stakeholders consulted on this?

    Can I trust this logic?
    One thing to consistently consider with impact reports is transparency (Principle 6), authors of impact reports should demonstrate the basis on which the analysis may be considered accurate and honest, and show that it will be reported to and discussed with stakeholders. Have they? And finally, but crucially, have they sought independent assurance of their impact data, assumptions and reports? Verifying the result (Principle 7) is crucial, and shows a mark of quality. You can search our Reports Database for only assured reports, to ensure you are reading reports that have met the standards we require, and find information on the assurance and accreditation services we offer on our website.


    For further information on conducting social value measurement please see     ‘The Guide to SROI’ and supplementary guidance. We offer a range of support services, including mentoring, that can support you further.

    What are your top tips for reading, or writing impact reports? Do you have advice for other community members? We would love to hear your thoughts!

  • Impact Management – A Matter for the Board!

    Impact Management – A Matter for the Board!

    This is a guest blog by member Jim Brooks, Director of Cogent Ventures on why impact management and social value maximisation needs to be addressed by the board. This is part of the Member Exchange Series. Let us know your thoughts in the comments.

    Imagine this scenario:

    You are the Chair of a charity or social business discussing next years annual cycle of business with other board members. It’s a full on cycle so you suggest that finance should be removed from the monthly agenda to free up time. This is done on the basis that we all know how important financial performance is and anyway, we have all the right policies and procedures in place in any case. You would probably get some odd looks and comments such as “you’re kidding right?”. Most would actually be thinking that its time to get a new Chair because this current one has lost the plot. In short, everyone knows how important financial governance is and quite rightly it has a place as a regular item on the agenda.

    So why, I ask, is it perfectly ok for impact management not to be a standing agenda item for boards. Surely we can’t rely on the same  “we all know how important it is” argument, can we?  But this is exactly what i do hear when talking with people from the  social enterprise and charity sector! Whats more as I increasingly raise the subject I tend to get answers such as. “impact is implied, its why we are here” or “impact in our DNA” or even “we report outcomes in the annual report”. However, most people I talk to quickly realise that of course impact management should be on the agenda and then together we ponder why the heck it is not.

    Let me be clear

    Let me be clear about what having impact on the board agenda means. I’m talking about impact strategy, impact reporting and impact performance improvement, in that order. Firstly, the board should be involved in setting the impact strategy, by which I mean the development of the theory of change that leads to the outcomes for beneficiaries and other stakeholders. This way the board are fully attuned to what it is that the organisation does and how this leads to social impact. Once targets have been set the board should review performance against the targets and clearly this needs to happen regularly, in the same way that management accounts are reviewed by the board. Finally, and possibly most importantly, the board then have an opportunity to engage with the management team in impact performance improvement, whether that be to address poor impact performance or to learn from good performance.

    Think about why you won’t be taking finance off the agenda and then apply the same arguments to impact

    None of the above means that having impact management as a regular item needs to be an onerous task and it may not always require a great deal of time. On the occasions where impact strategy is discussed and agreed it may be a fairly lengthy agenda item, similarly when performance improvement is being discussed. There will, however, be times through the year where the slot could be helpfully used for hearing impact related case studies for example. These sessions are likely to take less time but are just as important as they ensure board members remain grounded in the work that the organisation does.

    It will, of course, be for individual chairs reading this to decide if impact needs to be a stand alone agenda item as opposed to being inherent in other standing items. To these people I say think about why you won’t be taking finance off the agenda and then apply the same arguments to impact.

    This is part of the Members Exchange Series, for more information, see here.

  • Beware the trip of the tongue

    Beware the trip of the tongue

    This is a guest blog from Vincent Neate, Head of Sustainability Services at KPMG UK. Vincent has over 20 years of experience at KPMG, where he has been at the forefront of creating relationships and practices based on sustainable value creation. Vincent has recently joined the Social Value UK Board.

    The business world, we all know, is excessively enamoured with acronyms and abbreviations.  Few of us will not have sat in a meeting with some clever-clogs pointing out that we have miscalled an abbreviation an acronym.  Whilst we take the mickey out of ourselves and each other for this, these short hands serve useful purposes.  They speed things up.  They make things memorable.  They trip off the tongue.

    Early in my career with KPMG I spent some very happy years in Research and Development.  Here we would spend hours coming up with acronyms beginning with K which were funny enough to amuse our colleagues but subtle enough to pass partner censorship. So, acronyms can be fun too.

    But, the thing is, words have meanings that we cannot necessarily control.  The introduction to the general lexicon may take them beyond the original abbreviation or acronym’s intent.  What started as a great idea because it tripped off the tongue might even become so ubiquitous that it starts to shape the cultural and strategic agenda.

    I don’t know when ESG was first used in the world of sustainable and responsible investment and I must confess that I have not really tried to find out either.  Over the years I have heard it spelled out in many different ways but we all know that it is shorthand for three words – Environmental, Social and Governance.  It is certainly ubiquitous, companies and investment managers have ESG policies and procedures and The Private Equity industry have ESG Due Diligence questionnaires.  There are untold roles in organisations where ESG is either in the job title or job description.

    My itch about “ESG” started around 2005 when I was on the Professional Standards Committee of Invest Europe (then called EVCA) and facilitated the first face to face roundtable between the PE initiative of the UN Principles of Responsible Investment and a number of the largest global buy-out firms held in New York.  Things have changed beyond recognition in the intervening years but my humorous take on PE and ESG at the time was that the managers were happy to deal with ‘E’ and ‘G’ but less so ‘S’. They were happy to deal with ‘E’ because it had calculable cost benefits. They were happy with ‘G’ because the whole industry is predicated on aligning management and investor interests. The problem was that to get them to embrace ESG we would have to help them understand that ‘S’ meant more than just workers’ councils and handing power to trade unions.

    I thought I was funny.

    I think this example illustrates two very important points.  The first is that the three components of ESG are not, from the perspective of business and management decision making, equivalent. The second illustrated point is that our abbreviations don’t just speed up our communication and occasionally supply mild amusement, they positively direct and drive our behaviour.

    I think this example illustrates two very important points.  The first is that the three components of ESG are not, from the perspective of business and management decision making, equivalent.  They are not of equivalent scope, scale, or even importance.  Governance is huge, it is a meta-process which sits above all operational processes and is the thing that determines the parameters and content of conversation at the Board.  Bad governance is a Board deprived of relevant information; failing to properly discuss information or ignoring information.  That information can be anything – financial, risk, market, regulatory, social or environmental.

    Environmental is different.  It is precise and increasingly indisputable.  If you use energy you have a carbon footprint. If you fell a tree the tree is no longer there. So many parts per million of fluoride in the water supply is harmful.  Environmental can be easily regulated and is.  If it were not for the gradualism of the political process and the lobbying of industry (and I concede wider economic concerns) we could control our environmental impact today.

    Social is messy.  What exactly is the relationship between business and society?  Is it different if the business is large or small?  What should we think when the business is resident in our community and sells in our community but produces out of sight in far flung countries of the world?  There is not the same easy measurement of social performance, even though there is much agreement about methodology in the Social Value Community.  It makes me think that perhaps we should have been putting more emphasis on the social leg of this three legged stool for a long time now.

    The second illustrated point is that our abbreviations don’t just speed up our communication and occasionally supply mild amusement, they positively direct and drive our behaviour.  When ‘ESG’ first came out it was already true that everyone agreed governance was important (even if they only paid lip service) and environmental concerns were going to be easier to action than social ones.  My contention is that how we structured our abbreviation pushed consideration by business leaders of Social impact and Responsibility into a very poor third place.

    We are not bad people, but if you tell me to look at three things and I have the time to look at one, I will probably look at the first on the list. It is way past time for us to turn the list around and put social impact first.

    It would be great to here your thoughts on this via the comments section below.

    You can connect with Vincent on LinkedIn here.