Charity boards: learning to embrace risk

All too often it’s easy to see the board’s role in relation to risk management as conservative; eliminating it as much as possible. But at the same time, there is a desire to be a creative, responsive or an entrepreneurial organisation to achieve our missions – in short, riskier.

I’d contend that good governance and leadership around risk requires responsible trade-offs – between compliance and performance.

Compliance to the various rules and regulations that charities are bound by is of course essential. Sometimes though, boards may forget to pay an equal amount of attention to taking the charity forward – to improving performance and exploring more effective ways the charity’s mission can be achieved. The understandable fear of falling foul of regulations needs to be balanced with the drive to bring about the change the charity was created to pursue.

Devoting too much time to the statutory side of the role leads to boards which fixate on the ‘hygiene’ factors like structure, process and stability and ignore factors that actually promote growth, enterprise or innovation. Many trustees see it as their job to minimise risk for their charity but nurturing the creative, entrepreneurial spirit of trustees and staff means embracing some risk.

Of course a core factor for the board in getting the right collective balance of risk is the people: a diversity of trustee backgrounds, attitudes and skills that can come together to challenge and create before settling on a new and better direction for the charity.

It’s important to be clear about what sort of organisation you want to be and then seek the right mix people to get there. The trustees as a board team set the tone for the whole charity and create an environment for the staff, structures and processes to either survive or thrive.

So, how can a board change its cautious DNA? What sort of board structure is best suited for a balanced attitude to risk? And how to go about identifying and recruiting the right people?

Join us at Evolve 2014

On 16 June, join Nigel Kippax, NCVO’s Head of Consulting and Training and Ian Joseph, Director of Trustees Unlimited at Evolve 2014, the annual event for the voluntary sector, as they explore attitudes to risk in a workshop.

This is just one of four workshops looking at governance issues at Evolve 2014.

We also look at:

No matter what your role is with, or within, the voluntary sector, there is something at Evolve 2014 that is relevant to you and your organisation. It will help you look to the future, whatever the size, shape and mission of your organisation.

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Nige was head of consulting and training at NCVO.

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