Abstract
AbstractInvestigations of how Oxfam Great Britain (GB) managed its safeguarding systems and handled revelations of sexual exploitation by its staff highlighted a variety of internal governance and culture issues, and a lack of transparency as it sought to protect its reputation. The current models of reputation management do not fully explain its actions, however. This article argues that five systemic factors in the environment in which nonprofits operate create undue pressures for protection of reputations and contribute to poor assessment of risks, inadequate accountability systems and limited transparency. These factors include: a stress on success and related competition for market share and pressures for growth; expectations of low overheads; challenges of governance and risk management; lack of public awareness; and regulatory gaps. Drawing on media coverage and the commissions of inquiry, the analysis shows how all of these contextual factors were at play in the Oxfam case, and suggests potential reforms.
Highlights
Investigations of how Oxfam Great Britain (GB) managed its safeguarding systems and handled revelations of sexual exploitation by its staff highlighted a variety of internal governance and culture issues, and a lack of transparency as it sought to protect its reputation
Operating as part of a global confederation of 19 affiliates, whose work is coordinated through Oxfam International based in the Netherlands, Oxfam GB is a separate legal entity, governed by its own trustees, and as a registered charity is under the regulatory authority of the Charity Commission for England and Wales
I argue that five systemic factors create a damaging environment for nonprofit reputation management: a stress on success and related competition for market share and pressures for growth; expectations of low overheads; challenges of governance and risk management; lack of public awareness; and regulatory gaps
Summary
A reputational approach to regulation assumes that organizations are motivated primarily by protecting and elevating their reputations, which are embedded in a network of multiple audiences and in a variety of regulatory relationships with the state, third parties and self-regulation (Carpenter and Krause 2012; Maor, Gilad, and Bloom 2013; Busuioc and Lodge 2017; Mitchell and Stroup 2017; Christensen and Lodge 2018; Crack 2018). While there is an indication that certification systems involving substantial self- and peer assessment and ongoing monitoring enhance public trust and intention to donate (Bekkers 2003; Feng, Neely, and Slatten 2016; Becker 2018; Peng, Kim, and Deat 2019), the effectiveness of clubs requiring only self-proclaimed adherence to standards is generally assessed to be weak (Gugerty 2009; Tremblay-Boire, Prakash, and Gugerty 2016) Third party watchdogs, such as Charity Navigator and GuideStar ( Candid), among many others, claim to overcome the disclosure deficit of self-regulation by providing independent assessments and ratings, again with the assumption that nonprofits will strive to achieve higher ratings and that such ratings will be used by potential supporters to make informed decisions about giving and volunteering. My argument is that existing models of reputation management alone cannot fully explain behavior in the Oxfam GB and related misconduct cases because the environment in which nonprofits operate has become complicated by a number of systemic factors that distort their actions in favour of excessive reputational protection and contribute to poor assessment of risks, inadequate accountability systems and lack of transparency
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