Charity Commission Issues Warning on ‘Weaknesses in Governance’


The Charity Commission is warning that weaknesses in governance are frequently the root cause of many things that can go wrong in charities. Responding to the launch of TrusteeWorks, Neal Green, Senior Policy Adviser at the Commission, says the Commission shares Reach’s desire to see charities benefiting from having skilled and experienced trustees. And, in an article specially written for Reach, he points out that being a trustee has its benefits.

Regulator will signpost TrusteeWorks

The Charity Commission is keen to work with a range of partners to encourage volunteering, particularly volunteering as charity trustees. Once our new and improved website is launched, it will signpost TrusteeWorks and similar resources to help those interested in trusteeship and charities in need of trustees, to find each other. And, to help would-be trustees, I’m particularly encouraged that TrusteeWorks signposts so much of the Commission’s guidance for charities, alongside other useful documents.

Some might expect the charity regulator to take little interest in the make-up of trustee boards. Surely our role is limited to ensuring boards are spending charity money in accordance with the charity’s objects and not pocketing any themselves?  But experience has taught us that, in order to be an effective and proportionate regulator, prevention is always far better than cure.  Getting the right skills and experience onto a board in the first place is crucial.

More recently, we’ve been told that the Commission is only interested in fraudulent fundraisers or ‘bent’ accountants.  Yet looking back at the lessons learned from our Compliance work, Charities Back on Track, of over 180 cases in 2008-9, only 24 involved concerns about charity fundraisers and none involved ‘bent’ accountants (which would, in any case, be something for the police or accountancy bodies to investigate, not us).  We are more concerned about poor governance, internal financial mismanagement, failure to protect vulnerable beneficiaries, and crossing the line when it comes to supporting political campaigning.  And of course, although it’s often the most high profile, our compliance role is only one aspect of our work.

Time after time, weaknesses in governance are the root cause of so many things that can go wrong in some charities. Difficulties such as disputes that paralyse charities, loss of focus leading to mission drift, or poor controls and procedures that lead to financial mismanagement or create opportunities for fraud or theft.  A few charities somehow limp along despite having such problems, but they are unable to fulfil their potential and use their resources as effectively as they could.  This is why good governance is such a focus within our guidance, from The Essential Trustee to Hallmarks of an Effective Charity and The Big Board Talk (15 questions trustees need to ask).  Getting governance right both helps to prevent the kinds of problems I’ve mentioned, and underpins compliance with the letter of the law.

So where does good governance start?  I am more and more convinced that it is with trustees properly understanding their role. You really need to understand the purpose of your organisation; your powers, duties and responsibilities. Also, your role in terms of overseeing the work of the organisation, managing and supporting staff and volunteers, and championing the organisation’s vision and values. Such understanding will mean that you have the information and the motivation you need to ensure that the charity works effectively.  This is the first principle in the ‘refreshed’ code of governance for the voluntary and community sector, which the Commission fully supports.

We know that most trustees do a good job and want to do a better one.  As regulator, we have to maintain the balance of focusing on all the responsibilities (for the few who need to be reminded) without taking too much focus away from all the benefits of trusteeship.  Not only do trustees benefit society by the work they do, but they can also benefit by developing new skills, insights and friendships through carrying out their role.  Some even find it fun.

Neal Green
Senior Policy Adviser
The Charity Commission

Guest contributors are invited by Reach to give their own take on issues related to skilled volunteering and trusteeship. We hope you enjoy their articles.

Opinions expressed are those of the writer and may not reflect those of Reach.

January 15th, 2010 by