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7 rules of governance

26 May 2016 Candidate Blogs

7 'common sense' rules of governance from Morgan Hunt’s round table discussion

Morgan Hunt played host to charity CEO’s to discuss how charity boards can become a more effective and informed Trustee body.

Lead speaker Suzanne McCarthy outlined her 7 ‘common sense’ rules and led discussions on what is about to change that will affect how charities operate for good.


Change is in the air. A new code from the Independent Fundraiser Regulator will be published in July. And that’s not all. Down the line new legislation in data privacy will change the dynamics of fundraisers’ relationships with donors.   

In Morgan Hunt’s breakfast roundtable we heard that the donor’s voice got lost under the strong fortissimo of fundraisers’ orchestral needs but how that must change with consent up front.

Suzanne McCarthy, Chair of Depaul UK led an inclusive discussion with our charity CEO’s; we listened to her down to earth advice on the importance of priorities and Trustees responsibilities; why relationships matter, how boards need to ensure that they work as an effective and informed body, where charity boards need skills to function properly, and why empathy alone is sometimes not enough.

The seven rules of governance will become even more important as charities get set to overhaul their operations in line with the new code of practice and new regulation to follow:


Governance fit for purpose

The first of the seven rules is grounded in a common problem that all charities face, working with volunteer Trustees.

Difficulties arise from working with a board consisting of volunteer Trustees which is much harder than working with boards made up of paid employees. Charity boards may only meet up to 6 times a year for a few hours at a time, with Trustees removed from the day to day operations of the organisation.

Beneficiary Trustees may have great passion for the cause, but might not possess the functional skills and experience for the task. Yet a charity board must ensure that adequate governance is in place and that their Trustees are fully conversant with their wider responsibilities.

Furthermore Trustees need to realise that everything done in fundraising is now done in their name and that good practise in Governance also demands constant review.

The function of the Chair

The Chair’s main function is to set the Board’s tone and direction to ensure Trustees clearly understand their function. The success or failure of a Trustee can depend on this.

A key point made was everything that a charity organisation does must be tied to value. It’s not about the money but about value, and Trustees must have a feeling and a kinship for those values.

This is not the mission statement but about what a charitable organisation is there for. We heard that if this cannot be articulated clearly then the charity will have difficulties with Trustees focusing on what they are supposed to do.

Value driven Trustees are supposed to act in the interest of the charity and their beneficiaries; to protect and safeguard the charity’s assets, and act with reasonable care and skill. They need to understand what the charity is there to do; the charity’s purpose, what the charity does and what it wants to achieve.


Trustees – not just for Christmas

It was made clear that being a charity board Trustee is not a half-hearted occupation. We heard that it’s not something that you can pick up and leave, like a puppy. It’s not just for Christmas, but a very serious responsibility that requires long term commitment.

The appropriate mix of expertise to have on board depends on the skills required to function and does not need to be a client beneficiary, unless it is written into the constitution, but you do need their voice.

“We want Trustee boards to genuinely understand the challenges that beneficiaries face. But we also need to move to more professional boards - the two things have to go hand in hand” said McCarthy.

Participating charities discussed ways in which to get understanding. We heard that sending Trustees out in the field or on a beneficiary project so they could understand the values and see what it is they are delivering was a great way in which to build this understanding. Trustees can get the chance to bond together and meet with staff. So it’s possible to get professional boards closer and engaged with beneficiaries.

Common to a lot of charities is the difficulty in recruiting Trustees and often the reason why charities only have beneficiaries on boards of whom may not have the necessary skills required. We heard ideas of non-remunerating ways of engaging people and keeping in touch, indeed with younger members, a chance to acquire skills and experience that they could take with them to new employers.


Size matters

Charity boards of the right size matter, particularly when boards have a number of different committees. Trustees must appreciate the requirements of confidentiality, collective responsibility and behavioural standards even outside of meetings.

But it was emphasised that if it is a committee that is covering the issue the Trustee cannot think ‘oh that’s already done’, committees do not let Trustees off the hook.  They still have responsibility for what is going on.


Trustee appraisals

Described by one delegate as a weak link many Trustees are still not appraised. We heard about the benefits that an appraisal system has in directing and in relationship building.

Yet a number of our participating charities already had appraisals in place. They were holding reviews and appraising Trustee performance with annual objectives for each member of the board, reviewed at the end of each year. Some participants were positive about how it was helping to professionalise chairs and boards. Others talked about the brick wall that they faced in trying to formalise their Trustee arrangements.

Rule number five is that Trustees should be regularly audited and appraised as individuals and as a collective – ideally on an annual basis.


It’s all about Priorities

Since Charity boards do not meet that often a meeting agenda needs to be focused on priorities.

The point was made that work is not done in committee meetings but afterwards. Charities were advised to work on getting decisions made at meetings. Important issues should be given sufficient time and space, commensurate with the level of decision taking required. For example large scale investment decisions should not be trumped by low level irritations.

And as not every Trustee will read every word of the agenda paper an Executive Summary has to be good enough to communicate the priorities. And that Executives and team members should be able to present their agenda to the board in a clear and concise manner.

The first hour of a charity board meeting is the most important. Board papers should be written in clear English, be accurate and contain good and timely performance management data. The requirement for the Trustee should be explained clearly from the beginning of the paper.

Finally always appraise meetings. Sit back and ask whether it went well. Question whether you covered everything that you intended to.

The partnership - Chair and CEO

The last of the seven rules was about the relationship between the Chair and the CEO. This must be a partnership and it requires trust, respect and openness. Chemistry counts and the relationship is crucial to get right.

The Chair and CEO must have a robust relationship and trust each other; working together towards strategic goals as a collective, effective and informed Trustee body.

For more information email our Senior Appointments team.


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