Governance round-up: July 2018

Factors the public associate with trustworthy charities

The Charity Commission has published their research into trust in charities. The report reveals that, as well as transparency, trustees being true to their values and demonstrating efficiency and impact are among the most important ingredients of trustworthiness.

The research finds that public trust in charities has held steady since 2016 and remains at 5.5 out of 10. While this can be viewed as positive given some of the challenges of the last two years, I don’t think we can be complacent. The Commission reminds us that these findings suggest that public trust charities less than they trust the average person in the street.

This report comes at a pivotal time and we cannot simply dismiss these findings. Trustees and those involved in charity governance need to consider how best to address this challenge head-on for the sake of our own charities and the wider sector. The public concern here is real and trust remains lower than its historical benchmark. As a sector we must respond by making the changes the public want to see.

The research identifies the following key drivers of trust in charities:

  • Transparent about where money goes
  • True to their values
  • Efficient in their use of resources
  • Well-governed and well-managed
  • Able to demonstrate making a positive difference

These are areas where most charities can focus our efforts to rebuild public trust. Consider setting aside time at your next board meeting to discuss these findings

In addition to making changes we also need to speak more clearly and consistently about how modern charities are run and how decisions are made. We have published a toolkit focused on helping charities tell a better story which can help you shape your message in a way which supports public trust.

New corporate governance code

The Financial Reporting Council launched a new Corporate Governance Code earlier this month. Listed companies are required to make a statement on how they have applied its principles in their annual report.

Reading this new Code I am struck by some of the similarities with the Charity Governance Code launched last year. In particular, the importance the new corporate code places on board leadership and company purpose which is very similar to the first two principles established in the Charity Code. It is also interesting the cross over in what makes an effective board in terms of succession planning and evaluation.

I am also interested in the emphasis on avoiding ‘boilerplate’ reporting on the use of the code and instead making a meaningful statement on how the principles have been applied. Something which we have been thinking about in terms of reporting on the Charity Governance Code. If you have examples of your how you are explaining your use of the Charity Governance Code in your annual return then we are keen to collect some examples so please get in touch.

In August, NCVO is hosting a round table discussion to explore the cross-sector challenges in governance and I will report back on the themes and findings in next month’s blog.

Dealing with dysfunctional boards

Neal Green from the Charity Commission has written in Civil Society about how the Commission’s Taken on Trust report suggests that board dynamics are far more important to regulatory compliance and charity effectiveness than people might assume. Neal warns against dysfunction in all its forms and reminds us that a functional board is not necessarily one which always gets on.

Neal also introduces a model he calls the ‘governance triangle’ which illustrates the relationship between skills and experience, policies and procedure, and culture. All of which play a key drivers of an effective board. At our Trustee Conference in November we will be running a session on boards behaving badly.

In the news

‘The sector needs more disabled leaders’

Third sector has reported on Neil Heslop, CEO of Leonard Cheshire’s plans to transform the charity. The article explores the importance of lived experience in leadership roles. Leonard Cheshire carried out a governance review and changed its rules so that 50% of its trustees must have personal experience of disability. It’s not the whole answer, says Heslop, but ‘a contribution’.

‘It’s vital for the credibility and effectiveness of disability charities that their senior leaders are powerful and authoritative advocates for the disabled people they serve,’ he says. ‘Having lived experience of disability is not the only way to guarantee this, but it does provide an important perspective and moral authority.’

From the Commission

Annual return 2018

The charity commission has published information on its new tailored annual return which it will introduce later this summer.

It includes a request for disclosure of staff salaries across income bands, and the amount of total employee benefits for the highest paid member of staff. But the information on the highest paid member of staff will not be published on the public register. The recent inquiry into senior staff pay went further disclosing public declaration on this in the interests of transparency.

Other questions focus on trading subsidiaries, trustees taking employment with the charity, overseas payments and income from outside the UK.

Forum to discuss cross-sector governance

NCVO’s Governance Forum meets twice a year with the purpose of providing peer support, learning and the sharing of good practice for individuals who work in charity governance from organisations across civil society. The next Governance Forum takes place on the morning of 17 September at Clothworkers Hall – register here.

The next forum will provide an opportunity to explore NCVO’s Almanac data and what this means for trustees, and we will receive an update from the Charity Commission on their areas of focus and priorities.

We will also discuss the #R29 campaign which has emerged from a recent RSA report into school governance titled Who Governs Our Schools? The report recommends a cross-sector commission on governance. Using the recommendations as a starting point, we will explore the extent to which those involved in governance across all sectors, particularly as non-executives, learn from each other. Finally, the session will allow us the opportunity to reflect on recent governance challenges facing the sector and to decide which topics we would like to focus on in the next year.

Training and events

NCVO/BWB Trustee conference

Registration is open, so join us on 5 November at the leading annual event for voluntary sector trustees and anyone who works with them. Through expert led workshops and plenaries we will explore the key principles of good governance and how to embed them across your organisation.

Training

Dan Francis is NCVO’s senior governance consultant. For more regular updates follow @mynameisdanfran or @NCVO on Twitter.

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Dan Francis Dan is responsible for NCVO’s governance consultancy offer, focusing on governance reviews, board performance and trustee training. He joined NCVO from the National Union of Students (NUS) where, as a long standing consultant, he supported the organisational development of local students’ unions as charities.

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