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What You Need to Know About Good Charity Governance

by | Oct 19, 2021 | Emma Willder

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It’s not easy being a Trustee. Not only do I work with Trustees every day as part of my role at Beyond Profit, but I also sit as a Trustee of Wood Street Mission, a charity that supports struggling families across Salford and Manchester.

As Trustees, we are responsible for ensuring our beneficiaries receive the best support, and that the charity operates within the standards of good governance. It’s a role that most of us choose because we believe in the charity’s purpose and want to be the difference.

With Trustees’ Week fast approaching, we thought we would share some insights into what small charities need to know about good governance.

If you only remember one thing…

Good governance is all about people; you can have the best processes in the world, but unless your people have bought into them, and followed them, it doesn’t matter.

The ideal trustee is someone who is genuinely there to make a difference. Not what we refer to as ‘committee collectors’ – where people sign up as Trustees for multiple charities for all the wrong reasons.

I once worked with a charity that had a corporate Trustee and then appointed Directors from the corporate Trustee to the Board. It was borderline disruptive because they would impose certain Trustees on the Board – people they knew, or a ‘friend of a friend’. The problem is, as a Trustee your responsibility is to act in the best interests of the charity’s beneficiaries, not the person who appointed you. It creates conflict. And while this should be captured by your ‘Conflict of Interest Policy’ and governed under your charity’s ‘Code of Conduct’, you are reliant on people to follow those processes.

The best Trustees are those who empathise with your purpose. It’s why the Trustee recruitment process and open recruitment should be a priority for every charity. Trustees need to represent the communities they serve because they understand the precise help your ‘actual’ beneficiaries need – not just an idea of who they think the beneficiary is. With that feedback loop in place, your governance processes are more likely to be followed, because they are having a long-term impact on the people you serve.

What makes a good governance process?

Good governance helps your charity to make better decisions, and have greater oversight of risk and finance, which places you in a better position to support your beneficiaries both now and into the future.

Therefore, the main objective for your governance processes is to ensure the efficient and effective running of your charity. This incorporates regulatory compliance, risk identification and mitigation, how to grow and maintain support, and ensuring that what you do is advancing the charity’s objectives.

If you’re unsure how to achieve this in practice, the Charity Governance Code is a great starting place. Although it is not a legal or regulatory requirement, it provides you with a robust framework to help you create an ingrained culture where everything is working towards the charity’s purpose:

  • Organisational purpose: the Board is clear about the charity’s aims.
  • Leadership: the Board is effective in driving activity in line with the charity’s aims and values.
  • Integrity: the Board reflects the charity’s ethics and values in everything it does.
  • Decision-making, risk and control: processes are informed, rigorous, timely and monitored.
  • Board effectiveness: the Board is diverse in skills, experience, backgrounds and knowledge.
  • Equality, diversity and inclusion: supported throughout the charity and in its own practice.
  • Openness and accountability: the Board operates with transparency.

The Code is purposefully aspirational to encourage Trustees to strive to constantly improve and be the best they can be. It’s why the Code reiterates how important people are to the creation of good governance. It says that built within the foundations of good governance are Trustees, and how they must be, “committed to their charity’s cause and have joined its board because they want to help the charity deliver its purposes most effectively for public benefit”.

How Beyond Profit can help

We specialise in helping small charities because we know how tough it is to manage a charity on limited resources. Our purpose is to level the playing field so every charity has access to the same skills, knowledge, and expertise to meet the needs of the beneficiaries, and the expectations of the Regulator.

If you don’t have governance policies in place…

The whole point of a policy is for it to live and breathe within your charity to guide the way you operate – not be saved to a folder, never to see the light of day again. Rather than take a carbon copy of something you find online and attempt to retrospectively fit it to your charity, talk to our specialist Governance Team. We can help you to create policies that fit your charity perfectly because they mirror the way your people think and work.

If you have policies in place, but they’re not working…

Invite us to come and review your governance policies. As silent observers in your Trustee meeting, we can focus on people’s behaviours and see who is/isn’t contributing to the discussion. We will then compare our observations against your Charity Code to highlight any problem areas and develop an action plan. Depending on how involved you would like our team to be, we can either hold your hand through the process or step back and leave you to get on.

If you want to be certain your charity has good governance in place, send us a message to see how we can help…

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