Governance Project Project...Logic : There is a need to simplify the %s. The Chapters are to be...

Governance Project

© National HRD Network. Disclosure not permitted 1

Approved by Board, AGM/EGM and Charity Commissioner

1995 First Change Report (Change of Address) From IIM Ahmedabad- 40 Cosmo

Villa Ahmedabad

Change Report filed in 2011 that became the Inputs of Blue Book including the

Selection of National President.

Change report filed in 2017 with amendment in NHRDN Membership

Approved by Board, AGM/EGM and Pending with Charity Commissioner

2019-Membership Change

Approved by Board and AGM/EGM and not Submitted with Charity Commissioner

2012-Creating new post of Director General/CEO

2017-Centralised Membership

Approved by Board only and neither approved by AGM/EGM and nor Submitted

with Charity Commissioner

1997 Shifting of HQ to Hyderabad

2003 Shifting of HQ to Hyderabad

NHRDN Governance Amendments


Governance Project

NHRDN 113th Board Meeting

September 26, 2020

Project team :

Sudheesh Venkatesh

J Ravikanth Reddy

Ashok Ramchandran


Based on our Reimagined Mission, clarify roles of National Secretariat &

Chapters

Role of NHRDN Board and the Chapter Boards

Identify the approach to National programs / properties Vs Chapter

accountabilities

Review the effectiveness of current mechanisms – Agreements, Bye laws,

Blue book

Review the Audit status of NS and all Chapters

Governance around memberships and financial matters, other spends /

payouts

Strengthen / establish governance mechanisms such as Ombudsman,

process of resolution of complaints / grievances

Deliverables of the project


Sudheesh, Ravikanth and Ashok have reviewed the structure and content of the

Blue Book. This has been circulated to all Board members and Chapter Presidents

and feedback received.

The updated Blue Book will consist of 3 parts : (a) The approved MoA / Bye laws ;

(b) Approved Rules & Regulations ; (c) Guidelines --- This segregation and updation

of the Blue Book, established in 1986, is an effort to make it contemporary, and to

have ease of use and reference. This segregation is courtesy Sudheesh and

Dhananjay & Nalin.

We are at the stage where differences in understanding and assimilation of the

contentious history has been done. And the resolve to move forward established.

This has taken time and lots of study of past documents as well as discussions.

The objective today is for the Board to sign off the new Blue Book post which it will

be presented in the EGM / AGM and then presented to the Dy. Charity

Commissioner for approval. Post which, these changes take effect.

Approach to the project


Logic : There is a need to simplify the %s. The Chapters are to be incentivised in a

transparent manner to host and carry out activities, with the needed support from

NS.

All National Events ( approved as such by the Board) will have Chapter : NN ratio

as 60 : 40

All monies from Chapter-led local activities will accrue to the Chapter only

No events will be hosted directly by the NS . All National events will be pre-agreed

by the Board and will be assigned to specific Chapters. The concept of Learning

Centre is annulled, and for ease of understanding, such services will be provided to

the Chapters by the NS.

1. Sharing of monies


NS shall not host any events directly

Membership:-GST will be paid by National Body and the Chapter share will be

released after deducting the applicable TDS

National Events:- for all National events, National PAN will be used and GST will be

paid by National body, Surplus will be shared with the Chapters after deducting the

applicable TDS

Current

Percentage Share

Proposed

Percentage Share

Chapter NS Chapter NS

Individual / Student membership 80 20 80 20

Institutional membership 75 25 80 20

Pure Local Chapter events 100 0 100 0

National events hosted by assigned

Chapter

60 40 60 40

Annual National Conference hosted by

assigned Chapter

80 20 80 20

1. Sharing of monies (Contd…)


Advertisement revenue from website, e-newsletter, journal, app etc

Revenue from In-house programmes including quizzes, business simulation etc

Online NHRDN - Ram Charan Young HR Icon Awards

Online certifications and programmes

Advanced Leadership Programme

Monies of these exceptions to accrue centrally to the NN

The monies in the NN are also for the use of furthering our common

agenda !


1. After due deliberations, it is understood that all members belong to a specific chapter, even

while they equally belong to the National Network.

2. The road ahead on membership collection : The age of digital payment and ease of use is

here. It is proposed that all memberships be only routed through the website, and accounted for

as a central process for all of us– whether done at remote basis or at the Chapter event location.

This will facilitate the renewal and other correspondences etc in a consistent manner. It will also

drive traffic to our website. All membership numbers will continue to be issued centrally, for ease

of administration.

On a monthly basis, the accounts and remittances will be transferred to every Chapter.

Taxation shall be as applicable at the point of remittance of any monies transacting either way

(NN-Ch and Ch-NN)

2. Membership – Ownership, Methods & Monies


1. National President – Selected by a panel and per process as stated in the

Blue Book and approved by Deputy Charity Commissioner.

National Secretary & National Treasurer – Selection continues per process

in the Blue Book and approved by Deputy Charity Commissioner.

Criterion for Elected members to the National Board:- Minimum 5 years

membership ( proposed for 2 years) and to have been a Chapter EC

Member/National Board Member (to be discussed)

Regional Presidents and Chapter Presidents – Selection continues per

process in the Blue Book. However, Government Bye laws will supercede

the provisions of Blue Book.

The Director General will report to the National Secretary. This clarifies the

duality of the National Secretary being responsible for the functioning of

the NS, while the DG reports to the National President. This is more of a

technical sort-out – thanks to Ravikanth for pointing out.

3. Structure and Roles


1. Affiliation Agreements – As all important changes have been incorporated in the Blue Book,

the need for affiliation agreement cease to exist.

2. After the Blue Book Changes come into effect, all Chapters to modify their Bye laws align with

common points for consistency. This updation and consistency is important to be done every

time we modify the Blue Book.

3. The matter of Audits, annual returns and submission of records to the NN –The Blue Book

sees this as a process to be ensured this needs to be done. Both for the health of the

Chapter and as a monetary accountability of the Board and the office bearers.

4. A Chapter is an indivisible part of the national body, even though it may have its own state-

level byelaws to abide by. Both are legally valid, and regulations on both aspects need to be

complied with.

5. The issue of Hyderabad as the HO – this was committed to the Telengana Govt, in the matter

of securing preferential land for the purpose of hosting the HO of NHRDN. This was ratified in

the Boards of 1997 and 2003. We already have the Registered Office in Ahmedabad. We

recommend the addition of Hyderabad as Operating HO. We will also continue with the

functioning of the NS in Gurugram, which is also in our owned office there.

4. Update and resolution of contentious issues


6. Capex use – The Board has granted till date Rs. 10 Lacs to Chennai Chapter in

2003 and Rs. 100 Lacs to the Hyderabad Chapter between 2009-17, towards

creation of the offices, including the part of the building in Hyderabad, to be

deemed as the HO.

It is recommended that we stop further disbursement of capex, with the world largely

and decisively moving towards digital. Also, for the occasions where we need to host

members / events, we solicit the facilities of Management Institutes / commercial

properties on rent and use. The ability to have any other objective basis to distribute or

sanction monies as capex is not there, and will be difficult to manage in a voluntary /

rotational appointment led organisation.

4. Update and resolution of contentious issues (Contd.)


1. Compliances review to be done across NS and Chapters – we are Trustees and are accountable.

The role of the NS is to collate and report to the Board. Ravikanth has a differing view. My view –

the Bye laws and the Rules & Regulations seek this, and we must provide this. The spirit is not

“why should NS supervise ?” It doesn’t -- BUT – the actual truth is “the Board must know”.

2. Signatories including Bank accounts - updation and collation needed

3. Membership clean up exercise to be done – to ascertain actual paying members

4. All Chapters need to register under the Trust Act / Societies Act and secure their not-for-profit

entity taxation approvals under Sec 12A. This needs anchoring.

5. The smaller (unregistered / unapproved) Chapters – called Association of Persons – need clarity

of definition and a clean up – Reg. Presidents to prioritise this, in coordination with NS

6. Regular Rhythms of the organization incl meetings, minutes, needs reaffirming – National Board &

Chapters.

7. All Chapters Executive Boards as well as National Board members – need to go through a refresh

of their fiduciary and regulatory accountabilities.

8. Website updation, Journals and newsletters and digital campaigns to be strengthened – centrally.

Also, all e-learning, platforms and intellectual properties to be kept for common use, centrally, and

Chapters not to replicate locally.

9. Ombudsperson and Grievance Resolution process – rolled out and uploaded to the Website, as

agreed

5. Some of the processes that need to be done by NS & Chapters, and reported back to Board


Updated Blue Book Draft – Feedback received

Feedback Received Action Taken

1. I am concerned about how we could make the

rules known (and therefore respected) in the

chapters and what the consequences of non

compliance may be. EC members in the Chapter

have no orientation or familiarity with the Chapter

rules let alone the Blue Book to be able to

appreciate the boundaries that they need to

function within. Can we look at producing a simple

summary of the BB for all EC members that they

need to go through ahead of taking charge?

2. As you have rightly said, Chapter bye laws have

to align with the BB and we will need to review our

respective Chapter rules once the amendments

are ratified.

The Regional President and Outgoing Team shall

familiarise the incoming Team about different

provisions and responsibilities of the Bye Laws and

other protocol of NHRDN, including the blue book/bye

laws etc.

Equally the National Secretariat shall be point of

Contact for clarification, if any It is expected that every

incoming office bearer shall update Herself/himself of

all the relevant chapter and National Processes.

The outgoing Team shall also ensure proper handover

of accounts, processes and other matters of the

chapter.

It is intended that both National Network and Chapters

will maintain two way communication including sharing

of membership data, financial transactions,

remittances, taxation and audit Changes in bye laws,

Legal notices etc. This is important because of need to

ensure proper communication between two parts of

organization. A summary of the above should be

presented by National Treasurer at every Board

Meeting



3. Now that you have clarified the details of membership, it would be good to state

explicitly that chapters do not have flexibility to offer new kinds of memberships,

for different fees. I know that it is understood to be that way but there is always

a temptation to offer membership at discounted rates

Agreed. A line in this regard

to be added in the Blue Book.

4. A point on annual memberships is not clear. What difference does it make to

renew before March 31 following the expiration of the membership? Will the

renewal be at a lower fee? Or will there be any penalty for late renewal, beyond

the March 31 deadline? As I understand the situation, annual membership is

renewed for the same original membership fee. The March 31 reference for

renewal of annual membership just seems like a redundant point to me.

Point noted and implemented

- Membership to be given

from date of joining to

stipulated periods

5. Virtual AGMs may not be permitted in all states at the present moment. I know

for sure that Tamil Nadu is not permitting it even in the midst of the pandemic.

This is a new issue for the government created by the CV situation and I am

sure we will get direction on how we manage AGMs.

In the current context virtual

AGM is the only viable option

available to National Network

6. Have you considered separating the Brand Manual as a stand-alone document

that can be shared easily since Communications is managed by several people

across chapters and they need to know and abide by the standards laid down

for branding? Similarly, there may be other sections that can be separated from

the Blue Book (but retained in a way to allow for flexibility to change content)

but can stand on their own and modified easily without going through the long

drawn out process - like the Awards section, National Conference section, etc.

Brand Manual is part of

Supplementary reading

material. Content may

change from time to time so a

version control would be put

in place

Updated Blue Book Draft – Feedback received (Contd…)



7. On the section on Chapter - pt 6 outlines the sharing of funds for

membership etc. I did not understand the point on the various nature of

events covered here. Does this apply for only the NS initiated events or even

those initiated by the Chapters?

Also in the responsibilities of the Chapter, it would be good to encourage the

Chapters to consider initiatives/ programs for the local members in line with

the local requirements - eg initiatives/ programs for the IT based folks in

Bangalore, Automotive HR folks in Chennai etc. Some thinking from the

Chapters would be good.

8. Also it’s good to have some section outlining about some Volunteering

programs at the Chapters - eg the Young Advisory Board and the NHRD

Ambassadors that we have in Bangalore. This will help us broadens the

engagement with members and deepens the quality of offerings. Also

increases the sustainability of the Chapter

As clarified in slide 7 and 8.

It is a good practice. Chapters may

implement appropriately.

9. (Point No. 1 to 3 Blue book)

1. A Local Chapter may be started in a region or city where there are not less

than 30 individual and 10 institutional permanent members. The Local

Chapter will be registered after approval by the National Board of the

Network. (Page No. 32 of BB)

Individual Members proposed to be

30 however for institutional

membership for first year it is

recommended to reduce the same

to 5 institutional members in first

year. However, the same to be

increased to 10 in the subsequent

year




10. Its not practical not possible to to10 Institutional members before

starting a chapter. Owing to this restrictive clause,we could see many

stand-alone forums are growing and they are performing better than

NHRD Chapters. Hence, 10 Individual members would be ideal to start

a new chapter. We can have a defined infancy period / incubation

period. Without, having local small Chapters, we will be only metro

NHRD

As explained in the previous

point.

11. Many small chapters are dormant now. Many small chapters have

Governance and Statutory compliance issue. Due to lack of statutory

compliance, they lost their legal entity which should be validated by

NHRD HQ

Reviews are underway. Stock

taking to be done by 31st October

2020, followed by corrective

action. Expected closure by 30th

November.

12. Initiate / support the process of closing/merging of non-performing

chapters as necessary (Page no. 26) . Also have a clear process

for merger or closure of non-performing Chapters. This will also drive

action.

(Point NO. 4 to 6) Refer Annexure 1of your email:

Per above point.

13. Membership of NHRDN for at least 5 years and been an office

bearer / executive member of a local Chapter / National Board.: Can

we also have such eligibility conditions for other board members /

office bearers?

For Elected National Board

Member: Recommended for

2years. To be discussed in the

Board Meeting




14. The member to get elected should necessarily go through the election

process and at least 2% of the total national membership pool on the

last day of the last fiscal should vote for him / her otherwise the

position would stand vacant (May be 2% of the total votes casted for

in the election. 2% of total membership may not be right as you can’t

expect everyone to vote)

Since last year electronic voting

has been introduced leading to

enhanced involvement of

members.

15. This would ensure that the elected member is a fair representative of

the member community. Where the contesting members do not fulfil

the criteria of requisite votes in the election process, the Election

Committee (to be constituted by the National President) is authorized

to recommend from among the contestants on a significant

representation basis. (This process may create conflicts. Overriding

clause undermining the concept of democracy.

Noted. This is intended as

guideline only in such

extraordinary situations and is

intended as a backup.

16. Local chapter being registered as a distinct legal entity and also at the

same time being a constituent of NHRDN national body, is an

important contradiction which needs to be resolved. For instance,

NHRDN Ranchi too has its unique Bye-Laws and constitution, but just

by having an unique clause inserted in the Constitution this

contradiction has been taken care as early as in 2014.

All Chapters to amend their Bye

Laws to reflect the needed

alignment, specially to the

matters relating to operation of

NHRDN in a unified manner




17. There are places where the NHRDN Blue Book (BB) is seeking to

stipulate how the bank accounts are to be maintained and operated,

how chapter office bearers are to be selected/elected/nominated, how

chapters are to conduct their routine affairs, roles and responsibilities

of executive committee and its members, how programs are to be

designed and organized. These references create complications and

could be deleted to allow chapters to work as per their local condition

This is intended only as a

guideline for clarity, specially for

new people coming into the team.

18. The provision for approval of National Body as mentioned in the BB

for national events is seeking to curtail autonomy of the local chapters

and is not practical as both are distinct legal entities. Past events of

NHRDN Ranchi whether National / International have all been

designed and approved by chapter Executive Team.

This provision is to ensure

adequate clarity for what

constitutes a National Event and

to be circulated as so. And what

constitute a Chapter event and to

be circulated as so.This will bring

clarity and consistency.

19. Many chapters have members from multi cities, Ranchi chapter is

having members from Dhanbad, Jamshedpur, Bokaro etc. There are

states which have more than one chapter. Delhi chapter includes

members from multiple states it is very important to resolve the

jurisdiction issue for chapters while reframing the chapter structure

section in BB

Agreed.




20. The chapters are required to register for GST

only if the turnover exceeds Rs. 20 lakh. In view

of this, in the past membership money received

by some chapters have been without the GST

component. However, in view of membership

proceed being entirely collected by national

body, being suggested now, the GST

component shall have to be entirely deposited

by national body and only 80% membership

proceed need to be transferred without any GST

share. Else chapters will have to mandatorily

register themselves for GST which will add to

smaller chapter load.

GST payment on each and every

membership is a must.

In case of GST registered Chapters, 18 %

GST of 80 % membership fee to be

deposited by the Chapters to the State

Government.

National Network to ensure GST payment

compliance for non GST registered

Chapters.

TDS to be deducted as per law in both

cases.




21. Many a times, smaller chapters such as Ranchi

have to depend a lot on support from National

Secretariat (NS) for wide circulation of their

flagship events. Discontinuing such support

could adversely affect the success of events

organized by smaller chapters. However, to tide

over the complication associated with frequent

emails from NS spamming our

subscribers/members for small time events such

as routine monthly/weekly webinars the

following is suggested –

a. Asking chapters for moratorium on request

for routine weekly/monthly events such as

Webinar Talks / events

b. Asking chapters to identify their flagship

national events in advance for uploading on

NHRDN website calendar and only events

shared in calendar shall be circulated

through NS as national event

After due Consideration, the following is

clarified:

1.All National Events will be circulated to

the National database

2. All Chapter led event will be circulated

to the Chapter and Regional database




22. It is understood that there are outstanding dues to smaller chapters on

account of membership proceeds which were earlier received by NS.

For e.g., the Membership proceeds due to Ranchi chapter was

transferred by NS for 2019-20, however, the same is pending for

membership fees collected by NS from 2012-13 till 2018-19.

Reconciliation to be done with

fresh outlook and all such dues, if

any, will be cleared by 15 October

2020

23. Also, to the extent possible administrative hassles may be eliminated

to enable chapters to host their event/campaign information on

NHRDN website. At present these issues are expedited thru regular

calls. However, routine SOPs may be developed for such regular

administrative issues.

Agreed. Will be done.

24. Doubling of membership for smaller chapter may be very difficult. For

instance, Ranchi chapter has got all major PSUs/institutes as its

institutional members in last couple of years and adding more may not

be feasible. Instead, the focus may be on creating unique

participation/engagement experience for HR

professionals/Academicians & Students at large.

Noted. Regional Presidents and

Membership Project Team to

guide. It should be our intent and

spirit to widen our membership

base significantly.




25. Smaller chapters are having a feeling of being dwarfed by

giant chapters and their activities. We can also have a

scheme of each smaller chapter being adopted by a major /

larger chapter for sustaining its activities, which may be

elaborated in the BB

Regional President to

support alongwith bigger

chapters as relevant.

26. After having gone through the draft blue book , bye-laws and

its annexures/guidelines, I strongly propose to continue with

the current method of membership enrolment process. As NS

is digitalised the process now, it has become much

easier now for the new members to get attracted with this

platform. The chapter like ours who do not have GST number

is prefer to continue with the existing system of 80:20 sharing

with the improvised credit back time limit of 30 days instead

of 3 months or so.

Agreed.




27. We are giving 10% on events to ‘Associate Members’ but no

discount to student members. We suggest 10% of discounts on

events to student members also

• Similarly, Individual Life members should get a 15% discount

on events in place of 10%. There should be clear differentiation

between Individual Annual and Individual Life members.

• Two new categories of individual memberships have been

added (a) Associate Professional - NHRDN Membership

Offered to first-time Professionals on a complimentary basis for

6 months (b) Associate Student - NHRDN Membership offered

to first-year Management Students on a complimentary basis

for one year

• We need to explain the definition of ‘first-time Professionals’.

What will be the criteria? How it will work? How it will be

validated? Who will validate? National or respective Chapter.

• We may have a provision to give Institutional Membership to

the organizations who are sponsoring our events. (Annual or

Permanent depending upon the sponsorship amount)

28. Member Honoris Causa process should be simple. EC of the

Chapter should have empowerment to recommend. EC can

recommend with 100% concurrence of everyone and that should

be considered as strong recommendation and can be approved

The membership Project Team has

already reviewed this and has

recommend as below:

1. Working Professionals may be

issued complimentary membership

for 6 months

2. Students may be issued a

complimentary membership of 1

year

3. National President may approve

membership discount ranging

between 15% to 25 % for special

NHRDN membership campaigns

from time to time, across the

country.

4. Process for Member Honoris Causa

is detailed in the new Blue Book to

bring consistency in approach and

keep Chapter, Region and National

Network on the same page.




29. Are Chapters allowed to make their website? Currently, few chapters

are having their websites.

It is intended to have only one

website www.nationalhrd.org and

each Chapter to have a

subdomain. Chapter having

separate to migrate to the

www.nationalhrd.org by 31st

December, 2020.

30. How Chapters will be represented on the new NHRDN website? Will

there be a micro-website with Sub-Domains and Sub-Admin Control

Panel for the Chapters to edit their content.

Yes

31. There should be predefined guidelines for the website of the Annual

National Conference. Hosting Chapters create their website with a

new domain of National Conference but post-conference nobody cares

about the content and data. All controls and rights should be

transferred to the National Secretariat post-conference.

Annual National Conference will

be hosted through the National

Website so that we can have

singular drive and servicing.



http://www.nationalhrd.org/http://www.nationalhrd.org/


32. I have already stated, and consist in my view points, not to centralise the

membership collection and amendments to collect the same, This is not as per

the law. To that extent I have already sent an SBS opinion, EY also agreed to

the points stated by the SBS.

The point stated of centralising membership is for the ease of administration

and use of technology - the same can be done even now by adding the chapter

account No to the web site. Any way now we are adding the

The collection of GST on membership of small chapters is also not right as the

GST is not applicable to them - revenue of less than 20 lakhs.

The larger chapters have GST No , any way they are paying the GST and filing

the Returns. The large chapter also will find it difficult to get 12 A exemption

under Income Tax Act

In Hyderabad, the income tax commissioner insisted to submit the Membership

fee Invoices - as part to study and clear 12 A exemption application - we have

completed the same on 7th sept 2020 -which is pending from Nov 2019, (

hearing completed in March 2020).

The above we could do as we have taken a stand and Invoices were available

to prove to them that they are the members of the chapter and we are involved

in charity. Even now they are asking lot of details including the payment of

income Tax and source.

After Due Consideration and

detailed deliberation, the approach

as drafted in the new blue book , is

recommended to be taken forward.

1. Essentially the current process

is to continue and has been

clarified in the Blue Book.

2. This process will ensure

consistency and administrative

ease of membership services,

especially in this digital era.

3. All memberships to route

through the National Website

only.

4. Please note that this does not

in any form violate the primary

ownership of the member by

the chapter , while recognising

that all members are also a part

of a national body called

NHRDN.

Please refer to the new Blue Book

for the drafting clarity.




My recommendation is in the following order on the four models (ref 3.5 page no 96) which are all

compliant with the law:

Preference 1: Model no 2 - for chapters which already have GST reg and being digital this can still

be run through the national website - (Provide the option to chapters - most of the chapters may

not choose/need this)

Preference 2: Model no 4 : Which still gives the chapters its individual status - and NS its

overarching role - and being digital execution should not be a challenge. (Provide the option to

chapters - - most of the chapters may not choose this )

Preference 3: Model no 3: Not a preferred model - as it does not reflect the physical process

(existing narrative of by-laws - section 2 on page 86) of member being part of chapter first and

then affiliated through the chapter to NS --- but if we still go ahead with this model - request this to

be done with a clear written down narrative in by-laws that this is being done for better

convenience and while every one is a member of chapter first and then through affiliation becomes

a member of NHRDN - NS.

There is a fear in chapter that - their individuality and enterprise spirit will be killed if they become

subsumed in the model 3 - and it kills the federated structure - as envisaged at the time of

formation of the body. This feeling seems to have gone beyond the Chapter committee and to the

larger member base. My suggestion is to figure out the best possible way..... maybe focus on

winning the war and let go off a few battles.

Hyderabad also has a peculiar problem of land allotted by the State Govt.... and expectation of

GST remittance locally.

As clarified in

the earlier point

and the new

Blue Book draft.

Updated Blue Book Draft – Feedback received


1. Approval by the Board of the updated, three part Blue Book including all the changes

proposed.

2. Circulation of the old and the new Blue Book to all the members- 15 days prior to the

AGM.

3. AGM to be hosted virtually- date to be finalised.

4. Changes to be presented to the Dy Charity Commissioner, Ahmedabad

5. Once approved, the documents to be placed on the website for use by all

Path forward


Onwards to a strong fabric for NHRDN!

Thank You !


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