Do you have good governance within your charity? Trustees often face significant challenges when dealing with a small charity, such as unclear responsibilities, inadequate financial oversight, and poor communication among board members.
However, these governance issues can be avoided with the right awareness and best practices. Effective governance is crucial to the success of any charity, and addressing these challenges is key to ensuring long-term impact.
We explore the four key lessons for trustees of small charities.
Size doesn’t matter
Be aware that the same responsibilities are required regardless of the size of the charity.
All charities need financial policies and procedures, appropriate safeguarding policies, a conflict of interests’ policy and other key controls.
Although the complexity may be reduced with a smaller charity, the regulator’s guidance applies to charities of all sizes.
You can prevent issues
Remember that prevention is better than cure when it comes to effective governance.
You must file accounts and annual returns on time, as persistent late filing can prompt regulators to scrutinise the organisation more closely.
Additionally, ensuring that lines of accountability are both effective and properly documented is crucial, with trustees ultimately being responsible.
You should recruit trustees objectively, focusing on their skills. You must manage conflicts of interest and be cautious of any trustee becoming too dominant within the organisation.
Keep accurate minutes
Keep full accurate and timely minutes when conducting trustee meetings, as these serve as evidence of considered decisions and appropriate actions.
Document conflicts of interests and how they were managed in the meeting, refer to and keep supporting evidence with the minutes, and ensure that the minutes are approved at the next meeting, signed and retained.
This same principle can be applied when retaining other records. For example, terms of reference for sub-committees and when they are reviewed, policies and procedures and how trustees ensure they are up-to-date and implemented, and serious incident reports filed with the Charity Commission.
All trustees are responsible
Lastly, it is vital that the whole board, and trustees individually, are aware that they are collectively responsible for the charity.
While you can delegate a task to one trustee, a committee, or an executive manager, all trustees are responsible for ensuring that the task has been carried out effectively.
As a trustee of small charities, you play a vital role in ensuring effective governance and the long-term success of the charitable organisation. While the challenges may seem daunting, you avoid charity governance pitfalls with the right knowledge and commitment to best practices.
Ensure your governance keeps pace with the life cycle of the charity
Governance isn’t a one-time consideration; it needs to evolve as your charity progresses and moves through its lifecycle. The focus of the trustees may change from the initial set up phase when compared to a growth or expansion phase. Making sure good governance is considered throughout and focus is diverted as appropriate is vital to the longevity of a charity.
Get in touch with Charlotte Willmore and the Charities Team if you wish to discuss your charity obligations and any charity governance matters.
