Good governance is essential to any organisation and is especially important for charities. Reviewing your charity’s governance can be a daunting task and for this reason it is often ignored until a significant oversight occurs.
Adopting a proactive rather than a reactive approach to governance can save costs, time and stress in the long run. Ultimately, and most importantly, good governance will ensure that your charity continues to deliver its charitable purpose to the best of its ability for the benefit of the people, communities, animals and environments you work in.
The Foundation for Social Improvement (FSI’s) team have worked with a number of charities through our training and consultancy services to review and improve their governance. Despite very comprehensive and useful information and guidance, including the Charity Commission’s CC3-Essential Trustee guidance and the Code of Good Governance (currently being reviewed), we often find many charity Boards struggle to find the time to proactively improve their governance practices. So, how can Trustees and senior managers get started?
1.Start by opening up the conversation. As we know from the Four Stages of Competence Model in order to become highly competent we first need to recognise where we might not be doing so well. This can be challenging and requires careful navigating to ensure a constructive and respectful conversation in order to get buy in for the need to review and improve governance.
We often find that it helps at this stage to keep the charity’s beneficiaries and purpose front of mind – a charity with strong and effective governance will be better placed to meet the needs of their beneficiaries and deliver their charitable purpose, now and in the future.
2. Take a good, honest look at how you are doing. The Charity Commission’s CC3-Essential Trustee guidance and the Code of Good Governance are a useful place to start assessing how effective your governance practices are. For example, we recently developed a Board Perceptions Survey based on the principles of the Code of Good Governance for a charity we were working with– we wanted to understand how well individual Trustees thought the Board was doing. We collated and analysed the results and used this during a Board away day to facilitate conversations about what was already working well and should be celebrated, and to develop and prioritise an action plan for improving areas for development.
3.Ensure you are investing in the development of the right skills within your Board and senior team to ensure you are ready to face the challenges of the future. This is more than taking a list of desirable skills e.g. legal, financial, etc and asking current Board members what boxes they can tick.
Go back to your strategic plan and ask: what skills, qualities and experience do we want on our Board to help us meet the challenges our charity will face over the next five years? What skills and experience do we already have in our senior management team and where could the Board complement this? For example, the Board of a charity who has developed a social enterprise trading arm may want someone who has successfully started and grown a small business in a related field. A charity who knows that competitive tendering will be a growing income source in the next 2-3 years might want someone on their Board who has sat on the other side of the table as a commissioner. Every charity is different and only by understanding the skills you need can you undertake a skills audit and proactively address skills gaps, either through training, seeking external advice or targeted trustee recruitment.
4.Take time as a Board away from the business as usual to look at the bigger picture. The Board is ultimately responsible for ensuring delivery of charitable purpose – it is vital that the board is actively and constructively working to ensure that the charity plans how it best meets its objectives.
This may mean looking at how the charity delivers its services – can make better use of new technologies enable you to reach new beneficiaries or deliver services more efficiently? Are you looking outwards to other organisations in the same field seeking to work in partnership or at potential mergers? Are you investing enough time and resources to develop the skills of the volunteers and staff who deliver your services? All of these questions are important.
5.Ensure your charitable structure and governing document remain fit for purpose. I am always surprised at the number of unincorporated organisations I meet through our work at the FSI, who have grown over a number of years and taken on staff, contracts, lease agreements – all exposing the Trustees to personal liability. Even as an incorporated organisation it is important to check back against your governing document – some charities may find for example that they are prevented from undertaking particular activities or that the need that they address has changed, requiring a change to their charitable purpose. If you do need to change your governing document then ensure you follow both the procedures laid out in the governing document itself and the requirements of your regulator, whether this is the Charity Commission, the Regulator of Community Interest Companies or Companies House.
Thousands of people give up their free time to sit on charity boards as they want to make a difference to the communities and causes that they are passionate about. However, it is vital that trustees ensure their governance is effective so they are best placed to meet the needs of the many people, communities, and causes they serve - both now and in the future.
Janine Edwards is Head of Business Development at the Foundation for Social Improvement(FSI). The FSI offer free and heavily subsidised support to small and local charities and community groups (those with a turnover up to £1.5 million) including a suite of half day training courses in Governance.
The FSI also offer expert and in depth consultancy to organisations of all sizes in a range of topics including Governance, Organisational Strengths Reviews, Strategy and Business Planning, Impact Measurement and Reporting and Income Generation.