It’s not rocket science. We know trustees must govern to ensure their charities follow rules. So, how is this done and failure avoided? Hoping for the best? Trusting to the faeries? All that is necessary can be summarised in one guiding concept, one word, but I’ll get to that directly ….
As I browsed Charity Commission activity recently, I read about the start of yet another formal inquiry, this one relating to reporting, governance and regulatory failings. Boiled down, in fact all the suspected problems represent governance failings. The charity concerned is a poverty charity aiming to do good work, which it has quite possibly achieved in some measure, but the failings (if found) will have undermined this significantly. The inquiry and its aftermath continues.
The public continually supports charities like this, as well as those focussing on medical conditions, animals, education and a host of other community challenges. We’re all aware of the continual needs; we feel the enormity of the demands; and we’re grateful and supportive of charities which set themselves to work addressing these. We support and trust charities, recognising their special role. But charities are not special in the sense of being exempt from good behaviour: like any viable organisation, they must be well governed.
Being forgetful, busy or unlucky can sometimes play a part in defaults. However, governance oversights, unsystematic admin and over-ambition are more likely culprits. Charities are privileged with a special position in society, but that doesn’t excuse them from governance and regulatory behaviour. They must adhere to good governance in order to be both effective and trusted.
What does that mean? How should charities ‘do governance’ and avoid failure? Charity Commission intervention as above highlights that many trustees do not comply with or even understand what they should be doing. Governance is really control, meaning every aspect of a charity’s business needs to be well conceived and delivered. Simultaneously, a charity must keep adequate accounts, report as required to the Charity Commission and other bodies, and adhere to all law and regulation affecting their work. As I read about that Charity Commission inquiry I mentioned, I inwardly rolled my eyes: how often does this need to happen before charities get the message? Perpetually I guess.
Well, I’m not going to revisit all the steps necessary for trustees and senior teams to achieve good governance; you can read about that on my website and elsewhere. Let’s be more direct. If we ignore for now the situations of deliberate abuse (after all, those responsible won’t be reading this), there is really just a single guiding behaviour for trustees and senior teams to follow and consequently also one way to minimise the risk of default: engage.
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