Governance is not all that different to a happy marriage – it requires respect, love of the cause and hard work. Good relationships between the board and a charity’s executive enable organisations to foster a culture of passion and good teamwork. If they don’t work well together, decision-making can be hampered and there is always a risk the organisation will be pulled apart.
So what do organisations need to do make sure theirs is a happily ever after tale? Here are a few tips to make sure your charity is really getting the best from its board.
1. Good governance is invisible
It works in the background, ensuring that values, systems, processes and behaviours are in place to ensure the organisation is well-run. There is plenty of evidence that poor governance can affect the performance of the whole organisation. In its report Tackling Abuse and Mismanagement in Charities, the Charity Commission indicated that concerns about poor governance feature in many of its operational and investigation cases, including those related to financial abuse and safeguarding.
2. Board members should be clear about the objectives of the organisation
The board must be aware of its responsibility to act only in the charity’s best interests. This means being transparent and accountable to the beneficiaries, members and donors.
3. Don’t be afraid to put time, effort and money into ensuring your governance works effectively
The UK corporate governance code for listed companies and the NHS foundation trusts’ code of governance both require boards to undertake an external review of their governance every three years. Voluntary sector organisations may not have the financial resources to spend on such work, but there are ways of undertaking a review in-house (for example by using the voluntary sector code of governance as a benchmark. Alternatively the Charity Commission guidance provides formats that may be suitable). But don’t underestimate the value of an independent view from either an external organisation or by undertaking a peer-to-peer review with a board that has similar characteristics.
4. Recruit the right people
The means of recruiting board members will depend on whether the organisation is a membership organisation (in which case board members – or a majority of them – are likely to be elected by the membership), or non-membership (where the board members may be appointed by existing board members). The board should ensure it gets the right skills, experience and diversity to make it an effective team. The baseline is a regularly updated skills audit that identifies gaps, which can be filled through either election or appointment. Once on the board, all members should have thorough induction training and, crucially, ongoing development and training.
5. Volunteer does not equal amateur
Don’t be afraid to tackle difficult board member issues, which can drain a board’s energy and focus. Use a variety of means to address them such as a code of conduct, board member performance appraisals, and fixed terms for board members. Ignore the cries of “we are only volunteers”.
6. Recognise the value of a good chair
A great chair provides leadership to the board and ensures it achieves its purpose. In organisations large enough to employ staff, the chair manages the chief executive on behalf of the board. As chief executives are usually highly motivated and determined individuals, this requires a different style of management, and boards are most effective where the chair and chief executive work together well. Both should understand their roles and work to achieve the organisation’s aims. The recently formed Association of Chairs is a great source of support for charity and not-for-profit chairs.
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