Guide

Effective Governance: A Toolkit for Microfinance Association Boards

Importance of the board of directors in microfinance associations
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This document guides board members and managers of microfinance associations (MFAs) in building and sustaining an efficient and effective governance process.

The SEEP Network’s experience with MFAs has shown that governance, particularly the functioning of the boards of directors, is critical to the success of MFAs. Many MFAs, however, find this difficult, and often face challenges in board continuity, accountability and performance of individual directors.

The document is divided into five sections, with links to specific tools and resources. These sections discuss:

  • Organization of an MFA;
  • Common roles and responsibilities within the MFA structure;
  • Board composition, recruitment of board members, election of board members, and the usefulness of term limits;
  • Importance of providing good orientation and training for board members and recognizing their contributions;
  • Process to set up and use board committees to facilitate and enhance the work of the board;
  • Board meeting process, frequency, format and documentation of meetings;
  • Way that the board should conduct its business;
  • Importance of setting policies and having a code of conduct for board members.