Corporate governance & Performancemåling i NGOer

Tommy Holmstrøm

Student thesis: Master thesis


The purpose of this thesis is to examine corporate governance and performance measurement in NGOs, and limits lack hereof, puts on public ability to evaluate performance of the organisations. An analysis of level of compliance with recommendations on corporate governance by five of the largest Danish framework organisations yields a disappointing result. With 25 being the highest number of recommendations followed by any of the organisations, and 10 being the lowest number, there are significant room for improvements. Growing importance of NGOs in the international arena, a series of publicized scandal and the erosion of public trust in NGOs, has put the organisations under an increasing pressure to justify their existence. Demand for NGOs to report on outcomes and impact, has resulted in some significant challenges for the NGOs. Causality linkage between intervention and results, are a main concern to creditability of the current non-financial performance measures. Most of the existing literature tend to put emphasize on how complicated these kind of measurements are, instead of trying to figure out, which method that yields the most correct results. With most knowledge obtained by trial and error, the importance of wellfunctioning evaluation procedures is not to neglect. Financial performance measurement on the other hand are easy to measure, as all information is quantified and available in the account books. However, a significant challenge emerges, as the organisations do not share the same definition on cost included in the financial ratio. As put forward by analysis of the administrative expenses expressed as a percentage of revenue, some organisations include depreciation in the administrative expenses, and some do not. Some organisation use tools for time tracking, which makes is possible to perform a more aggressive allocation of costs on the different projects/programs. The thesis concludes that the there is a need to establish a best practice for corporate governance in NGOs and that this can be done by the establishment of a rating organisation.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2015
Number of pages166