Five tips for good governance

Good governance in search box with hands pointing over wooden table

Five tips for good governance

The Charity Governance Code committee has set out several principles for charities in England and Wales. The Charity Commission states that “good governance is no longer an optional extra. It is essential to charities’ effectiveness and survival too.” As a charity trustee, you must be able to demonstrate that you take the principles seriously and can adapt, when necessary, the way you operate.

Good governance enables your charity to comply with relevant laws and legislation and is fundamental to the success of your organisation. It helps guide the organisational culture you want to promote to ensure that every business element fulfils your vision.

Beneficiaries come first

Your charity exists to fulfil a purpose and your beneficiaries are “at the heart of everything.”

Your trustees have a responsibility to ensure your charity meets its objectives and achieves its goals. Otherwise, you fail your beneficiaries and supporters.

Your board should periodically review your charitable purposes to make sure you stay relevant and clear on the desired outcomes and impacts.

Consider training your trustees on your charity’s objectives and how these benefit the public. Ask them to meet with staff or visit sites where your charity work is in action.

Leading by example and assessing risks

Strong leadership sets the tone for the charity, its vision, values, and reputation. Your trustees must devote time to their roles and responsibilities, and lead by example.

Your organisation must formally record the board’s functions and clearly define everyone’s different responsibilities, from the Chair and officer positions to staff members.

However, with leadership and responsibility, there are always risks. You are required by statute and your governing document to make certain decisions, but your board is responsible for delegating tasks, implementing financial controls, and reporting arrangements.

Your board must effectively assess and manage risks by conducting annual risk assessments and deciding how best to deal with them. You will need to describe your approach to identified risks in your annual report and keep it in line with requirements.

The board should agree on an effective process for appointing auditors, and if necessary, establish an audit committee to oversee the audit process.

Integrity

Trustees must act with integrity and undertake duties in a manner congruent with the values, ethics, and principles of your charity.

Create a welcoming and supportive culture to achieve your charitable purpose: you want everyone who encounters your charity to get treated with respect and dignity and to feel safe.

Create a code of conduct for trustees, employees and volunteers that outlines the standards expected from everyone. Your policy and procedures must make sure your charity works responsibly, sustainably, and ethically. The board has a responsibility to ensure the charity follows the law and follows the Charity Ethical Principles as set out by  NCVO (National Council for Voluntary Organisations).

Now, more than ever, charities must focus on safeguarding policies and procedures – not only in person but also in the digital sphere.

Transparency

You want the public to trust in you and your charitable purpose. To successfully lead your organisation, your board must be transparent and accountable.

Therefore, to make accountability real, you need to open genuine two-way communication channels between stakeholders, trustees, and beneficiaries. By showing a willingness to learn from any mistakes and celebrate your successes, you will earn the trust and confidence of the public.

Develop a communications strategy that creates a culture of openness. Your reports should be open to scrutiny from the public. Consider providing regular updates to your supporters on how you deal with issues, the work your charity is doing and how you spend the funding.

Balance of the board’s effectiveness and trustees’ skills

You want your board of trustees to work cohesively together to ensure your charity thrives.

Implement a rigorous approach to recruiting your trustees, their performance and development, and the board’s conduct. You want to have a balance of skills, experience, backgrounds, and knowledge to make informed decisions. The board sets the tone through leadership, culture, and performance, so you want a unified team that will raise questions, challenge ideas and address topics collectively and confidently.

Trustees must consider reviewing their skillsets regularly to identify gaps. You can then look at ways to attract candidates to fill the skills gap and create a diverse group of trustees.

How can we help you?

As dedicated, trusted advisors to charitable organisations of all shapes and sizes, we help trustees through governance matters. Through audits, we can identify any areas of weakness in governance and deliver detailed reports back to the trustees.

We have experience advising and preparing governance policies and procedures, including risk and investment management policies.

Our charities team assists trustees with drafting policies and procedures or reviewing existing policies to enhance good governance. If you need help with any governance matters, speak to our team.
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Charlotte Willmore
Audit Manager at Wilder Coe
Charlotte has experience in the supervision and preparation of statutory accounts, management accounts including tailored client-specific analysis and service charge accounts as well as the audit of statutory accounts and preparation of Corporation tax returns for companies.