Follow the trail
This brings together various issues around 'governance' - How authority and responsibility is shared between senior staff and the management committee/board/trustees.
- Checklist for Board members.
- Types of governing body.
- The recent picture - the 'typical' board.
- Further Resources, including on founders syndrome.
The subject interacts with just about every other under the Briefings heading in some way, but in particular see:
- Our page on Trustee Resources, including governance.
- Organisation Management.
- Legal issues.
- Issues on why and how to register as a company or charity.
- Working relations - the different interested parties.
Governance – the systems and processes concerned with ensuring the overall direction, effectiveness, supervision and accountability of an organisation. from Cornforth via ChangeUp (2004)
NB We will use 'The Board' to equate with Management Committee, Board of Trustees or Directors or any other title the governing body is called.
Governance is very much a live issue in the charity world at present. Both via SORP (accounting standards) and greater monitoring, the Charity Commission is out to ensure The Board are clear on their legal responsibilities and how these are carried through by the activities of staff or volunteers. With increased contracting of care and other services to the voluntary sector, rather than the commercial or public, journalists, politicians and commentators are recognising the management weaknesses which have previously been ignored because of the 'good cause' perspective.
The Board, however composed or called, has ultimate legal responsibility for the organisation. Much may be delegated, but there must be clear lines of authority - key is defining responsibility reporting, to ensure that information of the right type and detail for the organisation's size and complexity gets to Board members in a reasonable timescale. Boards should meet frequently enough to handle the resulting workload, although sub-committees and officers can play a part.
Strategy, policy matters and monitoring of efficiency and effectiveness are often quoted as the function of the Board. Operational details should be left to staff and volunteers. However, particularly in smaller organisations, it is not easy to be so clear cut. Board members may be closely involved in the work and will often comment on their experience at the 'front line'. Here they should try to recognise that they are really wearing a different hat, as a volunteer or ordinary member, and not confuse it with their essential Board role.
Functions can be classified under five headings, according to Margaret Harris (Professor of Vol Sector Organisation at Aston University Business School, quoted in Voluntary Organisations and Social Policy):
- being the employer
- formulating and monitoring adherence to agency goals
- securing and safeguarding resources
- being the point of final accountability
- providing a link or buffer between the agency on the one hand and its external stakeholders and environment on the other.
- Is it a Limited Company? If yes:
- You are therefore a company director, subject to company law.
- Check the Companies House web site. Essential information and downloadable forms are available here. If your organisation is registered under Industrial and Provident/Friendly Society legislation - ignore the next two points.
- Newly appointed? Form 288a must be filled in and returned (dont forget the date of birth box!). The timetable for this is very tight but in practice just get it in a.s.a.p.
- Companies House has been in recent years sending out info on director responsibilities to newcomers - check with your organisation if nothing arrives after filling in the form.
- Who is the Company Secretary? This is not an optional post. Often the most senior staff member carries out this role (they can even in a charity as they are not automatically a director).
- Is it required to hold AGMs?
- If not a limited company, has this been considered? See our Registration
- Is it a registered Charity? If yes:
- You are therefore a trustee, subject to charity law.
- In England or Wales, see the Charity Commission web site. They have an introductory leaflet for new trustees, downloadable.
- Has the charity made it annual return, on time or at all? This used to be a non-event, but the Charity Commission are now will be pursuing defaulters much more vigorously.
- See our page on various Trustee resources.
- Are you an Officer - Chair, Treasurer, Secretary? If yes:
- Is there a job description for the post? If not, find a model
or at worst draw up your own, listing the areas you believe are
your responsibility, who you need to work with etc. (Try ICSA Guidance
notes.) Then circulate it for comment, and possibly
- Is there a job description for the post? If not, find a model or at worst draw up your own, listing the areas you believe are your responsibility, who you need to work with etc. (Try ICSA Guidance notes.) Then circulate it for comment, and possibly approval.
- Do you know how the following duties are carried out within the organisation?
- Have you seen ....
- The most recent annual accounts? Are they audited? If not, why is this?
- The 'Mem and Arts' if a limited company, or other constitution.
- Procedures for conducting Board and other meetings? May be in constitution or separate 'standing orders'.
- A list of approved policies and procedures, and know how to get copies?
Five 'types' of governing body have been identified. This approach can be used to examine how it relates to the rest of the organisation, and management consequences. (Research by Vic Murray and Pat Bradshaw-Camball as reproduced in Open University Business School course B789.)
- Approving. Well established, serviced by a professional manager who makes recommendations on all major issues, with sub-committees and few votes.
- Leaders. Honorary officers or the whole group are strongly committed and zealous in their pursuit of the organisations goals, with staff there to implement. Communication is often personal, and an expectation placed upon senior staff to have unquestioning loyalty.
- Representative. All stakeholders (see Working Relations) well represented on the governing body, with multiple and potentially conflicting goals, objectives, and values. There will be power contests and staff and governors are seen more in terms of their commitments than their formal roles. The senior manager will have to be politically astute!
- Consensual. Rejects the traditional roles and structures, and only acknowledges them on paper where legally necessary. Rotating offices, sharing experience and responsibility etc are characteristic.The senior manager will need to provide appropriate support to committees and consensus. Tensions are likely to arise over employment rights, and some will gain considerably from opportunities made available.
- Involved. Lacks clear direction, leadership or agreed purpose. Loads of energy and commitment, but lacking in co-ordination. Achievements will be uneven and the senior manager may be expected to both provide support and be closely controlled by the governing body. This scenario is frequent in early days of a voluntary organisation.
From research done by Chris Cornforth at Open University Business School,
using postal questionnaires sent to 2797 charities, with a 26% response
- Only about 35% of charities provide job descriptions for board members.
- Only 23% provide some sort of initial training or induction for new board members.
- These percentages are somewhat higher for the larger charities (the range goes from 20% for the smallest to 77% for the largest!).
- Average frequency of board meetings was between 5 and 7 a year.
- The size of board in small to medium charities is increasing, but decreasing in larger charities.
- The average size of boards increases with organisation size, going from under 9 in the smallest charities, up to almost 21 for the largest.
The full results from this research are in 'Recent Trends in Charity Governance and Trusteeship' published May 01 by National Council for Voluntary Organisations, ISBN 07199 15910, £12.50.
On the Web
Governance pages is from research body ARVAC " information on governance and management committees for community groups and small voluntary organisations".
Kingston Smith have a Toolkit for Good Governance.
Governance in the Jewish voluntary sector Report for Jewish Policy Research, 2001.
Founder Syndrome. Seemingly an international issue, we recognise the picture given in a piece on Help4Nonprofits. We would add to the problems associated with founders carrying on running an organisation for too long: carrying a sense of history and mindset which may make it difficult to recognise how things have changed; thinking that nobody else can do what they do (possibly true but this perception is often wrong) when there are other ways that the organisation can (and perhaps should) work.