The Power and Art of Mediation

In the past two decades, I have been involved with many high profile mediation’s. This has become a key feature in many of my past and present engagements.

 

Be it, disputes between trustees, disputes between employee and trustees, issues with regulators or between family business partners. Each time, I came in when all options have been exhausted and there is a stalemate, risk of self-destruction or Charity Commission intervention.

 

With Allah’s blessing, I have always prevailed and have been able to resolve the matter amicably. My suggested solutions and plans achieved satisfaction by all parties and a “win win” solution for all with a clear way forward, Allhumdulillah.

 

Although the outcomes were satisfying, the journey to it was often bumpy with lots of grit, patience, and sacrifice involved.

 

My approach to mediation is not conventional. Often the traditional culture forces the disputing parties to accept each other’s demands. Emotions and Islam is used to exploit each parties guilt and force corporation on moral grounds. This seldom results in long term and lasting solutions.

 

My approach is far, from it.

Mediation should be about justice, fair judgement and agreeing on what is right and fair, in the context of the overall objectives of the organisation and its expected destination.
 

For me, mediation is about justice, fair judgement and agreeing on what is right and fair, in the context of the overall objectives of the organisation and its expected destination.

 

This should not be about personal wins. Mediation or compromise should be about both parties winning, not the strong overcoming the weak which is often seen in traditional mediation.

 

In each mediation, I employ the following same principles:

 

Mediation requires a SMART overall objective

 

I determine the overall SMART objective. Something, I can visualize and touch. Something that makes both parties stronger and win. This is the utmost important part of any mediation. Weak or no objectives, results in outcomes that are weak and at times unfair.

 

Empathy is the ingredient to success

 

I place myself in each parties’ shoes and explore the pressure points. Having empathy is the key ingredient for building trust. Empathy should be the starting point for any mediation.

One must see wood from the trees

 

Once the pressure points are identified, I iron them out against the overall objective. It is at this stage; I separate out the noise and the wood from the trees.

 

Baggage needs offloading

 

People carry baggage that they need help with offloading

 

People carry baggage that they need help with offloading. Sacrifices and compromises must always be for a bigger objective and cause.

 

I make an effort to identify and offload this baggage which is often built up over a longer period based on personal experiences and perceptions. Often brushed under the carpet and ignored – never dealt with and it becomes the monster that stops common sense to prevail.

 

Once I am left with the genuine concerns and risks, I build bespoke solutions, based on my professional judgments and experiences – Again, against the overall objectives of the mediation.

 

Closure needs work

 

The mediation is then “closed” by all parties agreeing to “my solution”. By this time, I have earned the trust, strong emotions are ironed out and the focus for both parties is on the “win win” solution. The details are agreed and then signed off.

 

All the above is accompanied and peppered with hard work, difficult discussions, listening, patience, moments of quiet meditations and a hard resolve from me with no compromise.

 

Mediation is most relevant at the top

 

People in positions of responsibility often end up carrying lot of baggage – this builds up over time, much depends on them being able to work effectively with each other. This is not always possible, and this inability of being able to work together often risks bringing the whole building down with years of “building” and “achievements” to a dramatic loss.

 

This is where mediation then becomes that tool that can put the train back on its track.

 

Mediation is not about making people love and hug each other – its about achieving objectives and making sure the train gets to its destination.

 

Mediation is not about making people love and hug each other – its about achieving objectives and making sure the train gets to its destination.

 

End –

 

Author: Nasir Rafiq is a widely experienced Fellow Chartered Accountant (ICAEW) and a Charity Financial Governance Expert.

 

He is the Managing Partner of Dua Governance, a Charity Governance specialist accountancy firm.

 

Nasir has held many senior finance positions within the UK charity sector and continues to advise many charities on governance and leadership matters.

 

Email: info@duagovernance.com

The question of control

Trustees often battle with this question with different answers and approaches. Often conflicts between trustees and management are underpinned by this predicament. Charities are set up by humans and run by humans. The mistake is made when the human factor is ignored. The answer to the question of control lies in how humans normally behave and respond.

When a child is born and throughout the toddler years, parents feed, clothe, hold their hands and constantly check on them. When the same child grows up, becomes an adult and starts university the approach of the parents changes. There is no need to directly feed, clothe or hold hands.

The parents approach changes to now ensuring enough money is in the bank account, direction is set, good university is secured with appropriate accommodation. The constant physical checks turn into keeping an eye on academic results, who the friends are and quality of work experience and references. Same child, same parents, same love but the whole approach changes.

If the approach does not change and the parents remain like they were when the child was a baby or teenager then relationships between parent and child risk becoming sour, challenged and damaged. Charities are the same. When they are set up, they need full attention and involvement of the Trustees, however when they grow large, the whole approach must change. When it does not, this results in relationship between trustees and management to suffer and eventually breakdown.

Like the parents learning from other parents before them, trustees must also learn and apply successful experiences of other trustees and charities. Below are some techniques that have always worked.

Reconciling bank statements to information held by the charity

This should never be underestimated. Tidying up book keeping, preparing good quality year end accounts and picking up fraud, all depends on it. This applies to Charites of all sizes and complexities. Banks are third party organisations and they hold information in a certain way reflecting the instructions from the charity trustees and / or management.

When the bank information is reconciled against information held by the charity which reflects how the charity is run, this has an effect of a third party check over charity finances. This is why a charity with good financial control will always have an effective bank reconciliation process. Trustees should concern themselves about it as it aids control.

Checks and balances on the CEO

A charity with a paid CEO / Manager suggests the charity has grown and requires a different approach. Hand holding by trustees and constant checks should no longer be the case. If this is the case then there is something wrong with either the trustees and / or the CEO. The following are five key checks and balances that have proven to work in larger charities:

1. A robust strategic plan and budget that sets out the framework for the CEO to operate within. Without it, a blind ends up leading a blind, creating issues of trust when difficult decisions need to be taken.

2. A CEO reporting and feedback protocol against the agreed strategy and budgets. The reporting skill of a CEO should be assessed at recruitment stage.

3. A competent legal and audit firm that regularly meets trustees and comments on Management decisions and plans. Trustees should make time for such professionals and should take their advice seriously no matter how difficult it may be to accept.

4. Fair and clear HR policies that dictate how human resource is managed with no trustee or management override. HR issues are often bubbling in the background, if not sorted with good policies and their application, then these bubble burst with ugly consequences.

5. An Audit Committee supported by a professional Internal Audit function. Its not enough to have independent members of the Audit Committee if it is not supported by an competent Internal Audit function.

The key message is that Trustees can remain the same in a charity but the approach must change as the charity grows and enters new challenges.

 

Author: Nasir Rafiq is a widely experienced Chartered Accountant and a Financial Governance Expert. He has directed large finance, HR, facilities and IT functions in charities. He is the founder and director of Dua Governance, a charity finance specialist accountancy and business advisory firm.