Charity governance: perils of the accountability trap

We recently completed a Fiveways Charity Stress Test with a major UK-wide health charity looking at their Governance. Once again, I’m left thinking that the way British charities are run is a mess.

In this instance our test raised only one immediately significant ‘stress’ – relating to the length of tenure of trustees. The charity appears to have made some significant positive shifts in this area in the last couple of years, and our conclusion was that the organisation is not particularly vulnerable to media criticism relating to its Governance.

What was particularly interesting was the way that senior staff wanted to use any weakness that we identified to make the case for further changes to their own Board of Trustees – the governed leading the governors in governance.

In most charities I’ve worked with – including those where I’ve been a Trustee – the people with the most time and the best understanding of how the organisation works (the staff) are not accountable for anything: that’s left to people with minimal time and often very specialist knowledge or experience (although sometimes neither) to manage, in a 3-hour meeting four times a year.

Whilst elements of the British Press may still be prioritising poor practice in fundraising as the topic most likely to shift a few papers (and shut down a few agencies – see Neet Feet), the real story still lies in how badly charities – large and small – are governed.

The generally accepted separation of duties between strategic and operational is, and always has been, fundamentally flawed by the accountability trap. For example, the chief exec may be responsible, via a director of services, for ensuring safeguarding practice is excellent, but they are not accountable if something goes wrong – the ‘fault’ lies entirely and equally with all of the Trustees (including that one who hasn’t been to a meeting since last year and always makes the same largely irrelevant point when they do turn up).

Paying trustees for a few hours a year (a solution already preferred by a number of the largest UK charities) does little to resolve this; neither will having a different governance structure for the ‘super-major’ organisations. The issues are the same for any organisation which employs several staff – as a ‘governor’ your employees know more and do more than you, but if they cock something up, it’s your fault.

A re-think of charity governance is well overdue, and increasingly the only sensible solution I can see is for senior staff also to be Trustees, giving the governing body a mixture of Executive and Non-Executive roles. It’s not a radical step in running an organisation (see most major businesses), but would allow day to day accountability alongside additional ‘external’ oversight.

Judging by the speed of response from those described as sector leaders, the unpredictability of the views of the Charity Commission, and the other priorities of Government, nothing relating to charity governance will change soon. In the meantime, therefore, charities which are keen to be governed effectively may want to put together a team of trustees who: have plenty of time; have a good all-round knowledge of the work the charity is doing and the field it is in; are experts in charity governance; have an understanding of charity and company law; hold an accountancy qualification; understand the Mem and Arts; work well as a team; read everything that they are sent, and ask for more; keep records of everything; are nosy; visit the office(s); meet with staff without a chief executive present; find the SORP interesting; read up about developments in the world of non-profit organisations; are willing to speak with confidence about their role publically; are motivated primarily by achieving the mission of the organisation; can use MS Excel; know how to fundraise from a range of channels; and have a temperament that can deal expediently with emergencies and slowly with spreadsheets.

Good luck with finding that.

Whilst we await the revolution in charity Governance, do get in touch if you would like more information about the Fiveways Charity Stress Test.