HANDOUT________________________________________________________________

EFFECTIVE GOVERNANCE FOR BOARDS___________________________________________________________________

By Jane Clarke

CONTENTS1. Governance

2. Companies Act 2014

3. Responsibilities of Board Members

4. Company Secretary

5. Board and CEO

6. Conflicts of Interest

7. Managing Risk

8. Charities Act 2009

9. Regulation of Lobbying Act 2015

10.Health & Safety at Work

11.Data Protection

12.Role as Employer: Staff Sub-Committee & Staff Handbook

13.Board Induction & Board Handbook

14.Roles on the Board

15.SORP

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1. WHAT IS GOVERNANCE?

Governance refers to how an organisation is run, directed and controlled. The

governing body of an organisation is responsible for all the work and actions of that

organisation. The governing body is there to account for what the organisation does

and how it does it; the 'buck stops' with those who govern an organisation. It is

responsible for ensuring that the organisation realises its overall vision and its

specific goals. The governing body should focus on the long-term direction and

development of the organisation, policy development and evaluation. It delegates

responsibility for day to day management and implementation to staff and volunteers

and ensures that effective systems of accountability are in place for all aspects of the

organisation.

Governance is about ensuring the organisation has:

A clear, agreed mission and specific goals and priorities;

An agreed programme of work which is regularly evaluated;

Effective day to day management;

Staff leadership, support and supervision;

Transparent decision-making processes;

Internal systems for financial control and accountability;

Internal systems for compliance with all legal responsibilities;

Internal systems for compliance with the governing document, i.e. the

constitution.

To fulfill its role the board needs to know their job and have the expertise to do it.

This includes:

Working as a team;

Being well informed;

Being well organized;

Regularly assessing its own performance;

Holding its members accountable for their responsibilities;

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Anticipating succession in terms of board members and roles and also the

CEO;

Taking responsibility for recruitment and selection of the CEO;

Regularly assessing the performance of the CEO.

The following five principles of governance are those in the Governance Code for

Voluntary and Community and Charity sector organisations, www.governancecode.ie

It is highly recommended that all voluntary and community organisations comply with

the Governance Code as a way of ensuring and supporting good governance.

1.1 Leading the organisation:

Agreeing vision, purpose and values and making sure that they remain

relevant;

Developing, resourcing, monitoring and evaluating a plan to make sure the

organisation achieves its stated purpose;

Managing, supporting and holding to account staff, volunteers and all who

act on behalf of the organisation.

1.2 Exercising control over the organisation:

Identifying and complying with all relevant legal and regulatory

requirements;

Making sure that there are appropriate internal financial and management

controls;

Identifying major risks for our organisation and deciding ways of managing

the risks.

1.3 Being transparent and accountable:

Identifying those who have a legitimate interest in the work of our

organisation (stakeholders) and making sure that there is regular and

effective communication with them about our organisation;

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Responding to stakeholders' questions or views about the work of our

organisation and how we run it;

Encouraging and enabling the engagement of those who benefit from our

organisation in the planning and decision-making of the organisation.

1.4 Working effectively:

Making sure that our governing body, individual board members,

committees, staff and volunteers understand their: role, legal duties, and

delegated responsibility for decision-making.

Making sure that as a board we exercise our collective responsibility

through board meetings that are efficient and effective.

Making sure that there is suitable board recruitment, development and

retirement processes in place.

 

1.5 Behaving with integrity:

Being honest, fair and independent;

Understanding, declaring and managing conflicts of interest and conflicts

of loyalties;

Protecting and promoting our organisation's reputation.

2. COMPANIES ACT 2014

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The Companies Act 2014 was introduced on 1st June 2015 and it replaced the

Companies Acts 1963-2013. As well as consolidating the previous legislation, it

sought to simplify procedures and introduced changes in practices.

Existing Companies Limited by Guarantee (CLGs) do not need to re-register or go

through a conversion process. However CLGs which do not have an exemption from

having “Limited” in their name should consider seeking an exemption before 30

November because on that date their name will change by law to “Company Limited

by Guarantee” instead of Limited, unless they have got an exemption. Failure to

recognise this and change bank accounts websites, documentation, contracts etc.

can have adverse consequences. It will be an offence to have “Limited” or “LTD” in

your name if you are not an LTD company under the 2014 Act. Directors can be

made personally liable for issuing documents with the wrong name and contract are

not contracts if entered into with a company which uses its wrong name.

The Companies Act will also have an impact on the Constitution (the Memorandum

and Articles of Association – “Memo & Arts”) of CLGs. The Act will require CLGs to

have an objects clause in their Constitution but there will be no “Table C” that applied

to Memo & Arts under previous company law; instead some 87 statutory default

provisions will apply to the company’s internal administration, “save to the extent that

its constitution provides otherwise.” What this means in effect is that unless your

company updates its Constitution (the Memo and Arts) and bring it in to compliance

with the new 2014 Act and excludes the statutory default provisions, they will be

deemed to apply to your company.

The advice is that you should review and update your Constitution (Memo and Arts)

to ensure that it is fit for purpose for your organisation and compliant with the 2014

Act. This can be a time consuming and costly exercise. Fortunately Carmichael

Centre has made a constitution template and guidance booklet available free of

charge to the sector.

3. FIDUCIARY RESPONSIBILITIES OF DIRECTORS

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The Companies Act 2014 includes in statute the fiduciary duties of company

directors, previously recognised only in common law.  Section 228 sets out the

following 8 duties of directors, 6 of which are derived from common law and 2 of

which were previously included in company law:

3.1 To act in good faith in what the director considers to be the interests of the

company;

3.2 To act honestly and responsibly in relation to the conduct of the affairs of

the company  (this duty was previously set out in law under section 150 of the

Companies Act 1990);

3.3 To act in accordance with the company's constitution and exercise his or her

powers only for the purposes allowed by law;

3.4 Not to use the company's property, information or opportunities for his or

her own or anyone else's benefit (unless in specific allowed circumstances);

3.5 Not to agree to a restriction of his/her exercise of independent judgement

(unless in specific allowed circumstances);

3.6 To avoid any conflict of interest between the director’s duties to the

company and his/her own interests (unless in specified allowed

circumstances);

3.7 To exercise the care, skill and diligence which would be exercised in the

same circumstances by a reasonable person;

3.8 To have regard to the interests of the members of the company, in

addition to the duty under section 224 to have regard to the interests of the

company’s employees in general (this duty was previously set out in law

under section 52 of the Companies Act 1990).

4. COMPANY SECRETARY

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4.1 Under the Companies Act 2014, every Irish company must have a company secretary (or joint company secretaries).  It continues to be the

case that the directors appoint (and can remove) the company secretary;

4.2 The company secretary can be an individual or corporate entity but, if an

individual, must be at least 18 years and cannot be an undischarged

bankrupt;

4.3 The company secretary   can be one of the company directors  unless the

company is an LTD with a sole director in which case the company secretary

and sole director must be different;

4.5 A new requirement is that, when consenting to act, a company secretary will

be required to sign a declaration acknowledging his legal duties and

obligations;

4.6 The statutory duties of a company secretary have not changed significantly under the Act and continue to be owed to the company

alone.  They include filing the annual return and annexures and other required

public filings and maintaining the company's statutory books and

registers.  The role also usually involves arranging directors’ and

shareholders’ meetings;

4.7 The Act removes the previous requirement for a company secretary to ensure the company's compliance with company law, thus acknowledging

that the role is essentially advisory and administrative and the company

secretary generally lacks the authority to enforce compliance;

4.8 Instead, a new duty is now imposed on directors of all Irish companies to ensure that the company secretary has the skills and resources necessary to discharge his or her statutory, legal and other duties delegated by the board.   In the case of PLCs, the company secretary

must meet more stringent qualification and experience requirements as set

out in the Act;

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4.9 A company secretary is obliged to exercise due care, skill and diligence in

exercising his or her duties and can be held liable to the company for loss

arising from negligence.

5. BOARD AND CEO / MANAGER / COORDINATOR

The Board – CEO (Manager or Coordinator) relationship is pivotal in nonprofit

organisations. It is important to develop mutual trust within a robust relationship,

which allows for questioning, disagreement and respect for different perspectives.

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The relationship should be a cooperative partnership, while aware of the context that

the board is the CEO’s employer.

This is facilitated by a well articulated and agreed strategic direction, which gives a

common focus and clarity about desired results. The board and staff need to come to

agreement about

Vision;

Priorities;

Financial prospects;

Roles in terms of authority and responsibility;

Evaluation of performance (both board and CEO).

They should jointly determine how best to ensure excellent communication, which

should include listening conversations. They should also jointly determine what

information the board needs and how it will be delivered, e.g. the content and format

of regular board reports.

Information for the board should be

Relevant;

Timely;

Meaningful & Reliable;

Best available & Judicious.

6. CONFLICTS OF INTEREST

A conflict of interest is any situation in which the personal interests of board members seem to conflict with those of the organisation which they govern.

This personal interest can be direct or indirect, and it can include the interests of

parties connected to the board member. A direct interest would arise in the following

example: A voluntary organisation wants to contract for catering services and one of

the members of the governing body owns a catering company. This member gets the

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contract. This is a direct interest as the benefit to the board member is a direct

financial benefit. An indirect interest in the above example would be if the member of

the governing body did not own the company but had shares in it and stood to

benefit indirectly from any profit made.

Under company law a connected person includes the following:

Family members (including spouse or civil partner, anyone with whom the

board member lives as a partner in ‘an enduring family relationship’, children

and step children (both the board member’s own and his/her partner’s) and

the board member’s parents);

Corporate bodies to which the board member is connected; committee

members of a trust of which the board member (or a family member or a body

corporate with which he is connected) is a beneficiary;

A board member’s business partner.

It is unlikely that conflicts of interest can be completely avoided but the conflict

should be managed to avoid any adverse effect on the organisation and to promote

maximum accountability and transparency in the organisation’s affairs. Possible

conflicts or perceived conflicts should be considered as well as actual conflicts as an

organisation’s name and reputation are very important.

7. DEALING WITH CONFLICTS OF INTEREST

7.1 Identify the conflict;

7.2 Manage the conflict. When a conflict of interest is identified, board members

should try to manage the conflict in the following ways:

Declare a conflict;

Once identified, a conflict of interest should be declared at the earliest

opportunity;

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Leave the meeting – the board member who declares a conflict should

leave the meeting and the other board members should decide whether

their absence is appropriate or necessary;

Decide on next steps. This depends on the conflict, if the board decides

that there is no conflict, the individual board member can go into the

meeting. However, if the conflict is of such a low level that it can be

tolerated, then the organisation should determine how to best protect its

interests. The board member may for example absent themselves from

parts of the meeting where the conflicting activity is discussed. On the

other hand, if the conflicts are so frequent or serious that the board

member's usefulness is considerably lessened, they should resign from

their post as board member or cease the conflicting activity;

Record the process. The process above should be clearly minuted and a

register of interests should be held where board members can record their

interests.

8. MANAGING RISK

A risk is a chance that an organisation, (i.e. service users, beneficiaries, staff,

volunteers, property, assets, reputation), will be damaged in some way as a result of

a particular hazard. Risk management is a cyclical process;

Identify risks;

Analyse the risks;

Take action to mitigate the risks identified;

Monitor the risks.

Risk is a situation involving an exposure to danger. You should approach risk

management positively, as part of the day-to-day management of the organisation,

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for it does not just identify threats, it also provides opportunities for improvements.

Most risk can be anticipated and therefore planned for, for example:

Financial, e.g. inadequate reserves;

Human, e.g. departure of key staff;

Operational, e.g. theft of computers;

Technological, e.g. computers dying without sufficient backup;

Physical, e.g. staff member falling off a ladder;

Reputational, e.g. media exposure of bad practice;

Governance and management, e.g. absence of plan to guide the

organisation’s work.

You may wish to consider a risk management or audit subcommittee that

undertakes regular reviews of internal control systems. However you choose to

conduct this process in your organisation you should ensure that the governing body

is actively involved and reviews the risk management strategies annually as it is

ultimately responsible for the risk management in the organisation.You should

conduct an annual written assessment – under the main headings such as the seven

listed above – of the risks facing your organisation (risk identification). Each risk that

you identify should be assessed to examine the consequences to the organisation if

it were to happen (risk assessment).

Each risk then should be matched with a risk management strategy that describes

the procedures that are in place or actions that are underway to manage or minimise

that risk (risk management). Remember that you must put in place clear

communication channels for all workers to report suspected breaches of law,

regulations and other improprieties.

One of the most effective risk management approaches is to have a comprehensive

set of policies and procedures for the organisation. By having written policies and

procedures on, for example, staffing and employment, internet and email usage,

health and safety, etc, you will find that these procedures not only assist you in

implementing your plans for the organisation, but they also act as risk management

strategies for many of the ‘usual’ risks facing your organisation.

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9. CHARITIES ACT 2009

The purpose of the Charities Act 2009 is to ensure greater accountability by charities

and to protect against abuse of charitable status and fraud. It is also expected to

enhance public trust and confidence in charities and to increase transparency in the

sector.

The Charities Act 2009 reformed the law relating to charities and provided for the

creation of a Charities Regulatory Authority and, for the first time in Ireland, a

Register of Charities. The Charities Regulatory Authority was set up in 2014 and has

primary responsibility for regulating charities in Ireland, replacing the Commissioners

for Charitable Donations and Bequests. All organisations that are charities have to

be included in the register of Charities if they want to present themselves before the

public as being charities, or fundraise directly from the public for charitable purposes.

Charities that are currently recognised by the Revenue Commissioners will be

deemed to be charities by the Charity Regulator and automatically included in the

first register. Charities that are companies limited by guarantee will continue to be

bound by all the requirements of company law (including in relation to submitting

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annual audited accounts to Companies Registration Office).There will be no

automatic entitlement to the tax relief schemes operated by the Revenue

Commissioners who will continue to determine eligibility for tax reliefs for charities

that are registered with the Charity Regulator.

Key provisions of the Charities Act 2009

9.1 A statutory definition of “charitable purpose” for the first time;

9.2 A new Charities Regulatory Authority (CRA) established to secure

compliance and encourage the better administration of charities (between 9

and 20 members). It is Ireland's national statutory regulatory agency for

charitable organisations. It is an independent agency of the Department of

Justice and Equality.

The CRA has strong investigative powers, can co-operate with bodies inside

and outside the state and there are serious penalties for offenses under the

legislation. It has the following general functions:

Increase public trust and confidence in the management and

administration of charitable trusts and charitable organisations;

Promote compliance by charity trustees with their duties in the control and

management of charitable trusts and charitable organisations;

Promote the effective use of the property of charitable trusts or charitable

organisations;

Ensure the accountability of charitable organisations to donors and

beneficiaries of charitable gifts, and the public,

Promote understanding of the requirement that charitable purposes confer

a public benefit,

Establish and maintain a register of charitable organisations;

ensure and monitor compliance by charitable organisations with the

Charities Act;

Carry out investigations in accordance with the Charities Act;

Encourage and facilitate the better administration and management of

charitable organisations by the provision of information or advice, including

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in particular by way of issuing (or, as it considers appropriate, approving)

guidelines, codes of conduct, and model constitutional documents;

Carry on such activities or publish such information (including statistical

information) concerning charitable organisations and charitable trusts as it

considers appropriate;

Provide information (including statistical information) or advice, or make

proposals, to the Minister on matters relating to the functions of the

Authority.

9.3 The “Register of Charities” is established by the CRA pursuant to S.39 of the

Charities Act of 2009. All charities operating in the State and regardless of

size must register (this includes charities from outside the State who wish to

operate here).

All organisations that currently hold charitable tax exemption status from the

Revenue Commissioners will automatically be “deemed to be charities” on the

day on which the Charity Register comes into existence unless the Revenue

or CRA have reason to believe they no longer qualify. The Act provides that

the Charity Regulator can exempt smaller charities from some of the more

onerous registration requirements set out in the Act. The Charity Register will

be made available to the public online. It is an offense for an organisation to

hold themselves out to be a charity if they are not on the register. It is also an

offense for an organisation to publish any material describing itself or its

activities in such terms as would cause members of the public to reasonably

believe that it is a charitable organisation.

9.4 Excluded bodies - include political parties, candidates or causes or

organisations that promote purposes that are contrary to public policy - NOT

to be confused with government policy.

9.6 Advocacy – charities are permitted to engage in political advocacy that is

directly related to advancing their charitable purposes.

9.7 The Act sets out the duties and responsibilities of Charity Trustees including

the circumstances in which a person would cease to be qualified to act as a

trustee. Provision is made for allowing the purchase of Trustee Indemnity

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Insurance and the special circumstances in which payment of charity trustees

for NON-trustee work would be acceptable are set out. It also makes it

possible for the courts to protect charity trustees from personal liability in

proceedings taken for breaches of trust where the court is satisfied that the

charity trustee(s) acted honestly and reasonably in all circumstances.

9.8 Annual Returns and Annual Activity Reports are to be made by charities to

the new Authority. Audited accounts will be required for income above a

prescribed threshold of up to a maximum of €500k. Examination of accounts

will be required for income below the prescribed threshold. Charities with total

income/expenditure of less than €10,000 in a given year will not be required to

submit audited or examined accounts but will have to include a summary of

their finances in their Annual Activity Report. The Act provides that the

regulations can vary the level and detail of information to be required from

different classes of charities e.g. smaller charities. This information will be

publicly available except in the case of Private Foundations where no funding

is raised from the public. (They will have to make the returns to the Regulator

but the information won’t have to be made public). In the case of charities

structured as companies that already make Annual Returns to the Companies

Registration Office under company law the CRO will send these returns to the

new CRA to avoid dual reporting. All charities regardless of legal structure will

be required to submit an Annual Activity Report to the CRA.

There is a three-pronged approach to the regulation of fundraising:

Garda Permits are required for all types of fundraising including non-cash

collections.

Requirements are set out for the conduct of both cash and non-cash

collections.

Details of fundraising activity and income are required in the Annual

Activity

9.10 Provision is made for a Charity Appeals Tribunal – a speedy and

inexpensive mechanism for appealing decisions of the Charities Regulatory

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Authority. Charities will still have recourse to the courts if they are not happy

with the rulings of the Appeals Tribunal.

10. LOBBYING

In March 2015, the Regulation of Lobbying Act 2015 was signed into law by the

President. The Regulation of Lobbying Act 2015 (the Act) is designed to provide

information to the public about:

Who is lobbying;

On whose behalf lobbying is being carried out;

The issues involved in the lobbying;

The intended result of the lobbying;

Who is being lobbied.

Lobbying is an essential part of the democratic process. It enables or facilitates

citizens and organisations to make their views on public policy and public services

known to politicians and public servants. The Act does not aim to prevent or inhibit

lobbying. It does aim to make the process more transparent. The Act aims to do this

by providing for:

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The establishment and maintenance of a publicly accessible register of

lobbying;

The Standards in Public Office Commission (The Standards Commission) to

be the regulator of lobbying;

Obligations on lobbyists to register and to provide information regularly about

their lobbying activities, including, in the case of professional lobbyists,

information about their clients;

A code of conduct on the carrying-on of lobbying activities;

The introduction of a “cooling-off” period during which lobbying activity may

not be carried out by some former officials.

If you are involved in lobbying, you may need to:

Register on the Register of Lobbying website which is maintained by

Standards Commission: www.lobbying.ie

Provide information to the Standards Commission about your lobbying

activities three times a year.

There is no cost to register as a lobbyist.  Members of the public can view and

search the register free of charge.

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11. HEALTH AND SAFETY AT WORK

The main legislation providing for the health and safety of people in the workplace is

the Safety,   Health   and Welfare at Work Act 2005 . This Act consolidates and

updates the provisions of the Safety, Health and Welfare Act 1989. It applies to all

employers, employees (including fixed-term and temporary employees) and self-

employed people in their workplaces. The Act sets out the rights and obligations of

both employers and employees and provides for substantial fines and penalties for

breaches of the health and safety legislation.

10.1 (General Application) Regulations 2007: Almost all of the

specific health and safety laws which apply generally to all employments are

contained in the Safety,   Health   and Welfare at Work (General Application) Regulations 2007 . These Regulations replaced the 1993 General

Application Regulations and other secondary legislation in the area

of health and safety at work.

10.2 Employer’s duties: Under Section 8 of the Act the employer has a duty to

ensure the employees’ safety, health and welfare at work as far as is

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reasonably practicable. In order to prevent workplace injuries and ill health the

employer is required, among other things, to:

Provide and maintain a safe workplace which uses safe plant and

equipment

Prevent risks from use of any article or substance and from exposure to

physical agents, noise and vibration

Prevent any improper conduct or behaviour likely to put

the safety, health and welfare of employees at risk

Provide instruction and training to employees on health and safety

Provide protective clothing and equipment to employees

Appointing a competent person as the organisation’s Safety Officer

10.3 Employees’ duties: The duties of employees while at work are set out

in Section 13 of the Act. These include the following:

To take reasonable care to protect the health and safety of themselves

and of other people in the workplace;

Not to engage in improper behaviour that will endanger themselves or

others;

Not to be under the influence of drink or drugs in the workplace;

To undergo any reasonable medical or other assessment if requested to

do so by the employer;

To report any defects in the place of work or equipment which might be a

danger to health and safety.

10.4 Risk assessment and   safety   statement: Under the Safety, Health and

Welfare at Work Act 2005 every employer is required to carry out a risk

assessment for the workplace which should identify any hazards present in

the workplace, assess the risks arising from such hazards and identify the

steps to be taken to deal with any risks.

The employer must also prepare a safety statement which is based on the risk

assessment. The statement should also contain the details of people in the

workforce who are responsible for safety issues. Employees should be given

access to this statement and employers should review it on a regular basis.

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The Health and Safety Authority has published guidelines on risk assessments and   safety   statements.

10.5 Reporting accidents: All accidents in the workplace should be reported to

the employer, who should record the details of the incident. Reporting the

accident will help to safeguard social welfare and other rights which may arise

as a result of an occupational accident. An employer is obliged to report any

accident that results in an employee missing 3 consecutive days at work (not

including the day of the accident) to the Health and Safety Authority.

10.6 Health   and   safety   and young people: An employer should carry out a

separate risk assessment in relation to an employee under 18 years of age.

This risk assessment should be carried out before the young person is

employed. If certain risks are present, including risks that cannot be

recognised or avoided by the young person due to factors like lack of

experience, the young person should not be employed.

10.7 Violence in the workplace: The possibility of violence towards employees

should be addressed in the safety statement. For example, factors like the

isolation of employees and the presence of cash on the premises need to be

taken into account. Proper safeguards should be put into place to eliminate

the risk of violence as far as possible and the employee should be provided

with appropriate means of minimising the remaining risk, for example, security

glass.

10.8 Bullying: One of the employer’s duties is to prevent improper conduct or

behaviour (which includes bullying). An employer should have established

procedures for dealing with complaints of bullying in the workplace and deal

with such complaints immediately. Ignoring complaints of bullying could leave

an employer open to a possible claim for damages by an employee. It is

advisable for an employer to have an established grievance procedure to deal

with complaints of bullying. An employee who feels that he or she is the victim

of bullying can also refer the matter to a Rights Commissioner. The Code of Practice for Employers and Employees on the Prevention and Resolution of Bullying at Work sets out guidance notes for addressing

bullying in the workplace.

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10.9 Harassment: The Employment Equality Acts 1998-2008 place an

obligation on all employers in Ireland to prevent harassment in the workplace. Under this law, you are entitled to bring a claim to the Equality Tribunal and your employer may be obliged to pay you compensation if you

are harassed by reason of your gender, civil status, family status, sexual

orientation, age, disability, race, religious belief or membership of the

Traveller community.

10.10 Victimisation: Under the Safety, Health and Welfare at Work Act 2005 the

employee may not be victimised for exercising his or her rights

under safety and health legislation such as making a complaint. This means

that the employer may not penalise an employee by dismissal or in some

other way, for example, by disciplinary action or by being treated less

favourably than other employees.

11. DATA PROTECTION

Data protection is about the citizen’s fundamental right to privacy. The office of the

Data Protection Commissioner is established under the 1988 Data Protection Act. 

The Data Protection Amendment Act, 2003, updated the legislation, implementing

the provisions of EU Directive 95/46. The Acts set out the general principle that

individuals should be in a position to control how data relating to them is used.

The Data Protection Commissioner is responsible for upholding the rights of

individuals as set out in the Acts, and enforcing the obligations upon data controllers.

The Commissioner is appointed by Government and is independent in the exercise

of his or her functions.  Individuals who feel their rights are being infringed can

complain to the Commissioner, who will investigate the matter, and take whatever

steps may be necessary to resolve it. These following provisions are binding on

every data controller. Any failure to observe them would be a breach of the Act.

Certain data controllers are also required to register with the Data Protection

Commissioner. Organisations must:

Obtain and process the information fairly;

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Keep it only for one or more specified and lawful purposes;

Process it only in ways compatible with the purposes for which it was given to

you initially;

Keep it safe and secure;

Keep it accurate and up-to-date;

Ensure that it is adequate, relevant and not excessive;

Retain it no longer than is necessary for the specified purpose or purposes;

Give a copy of his/her personal data to any individual, on request.

12. ROLE AS EMPLOYER

Employment law has become increasingly complex over the past number of years

and there are over 30 pieces of major employment legislation in Ireland. The need

for organisations to ensure compliance with legislation is greater than ever.

12.1 HR/Staff Sub-Committee

It is the board’s responsibility to fulfill all legal obligations to its employees.

The staff sub-committee or staff liaison committee are a group of people who

are delegated by the board to deal with employment issues on behalf of the

board. The group is responsible for implementing and monitoring the

organisation’s policy and procedures as outlined in the Employee Handbook.

The board retains overall responsibility. Managing employment is a complex

area of work. It is important that the people taking on these responsibilities

have adequate support and training. It is also important to specify the terms of

reference of this group:

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Its role

How it will report to the board

How often it will report to board

Its authority

The number of members

How the membership will change and how often

Where members are drawn from

What experience, skills and knowledge are required within the group.

The role of the staff sub - committee usually involves working closely with

the CEO/Manager/Coordinator to:

Ensure the implementation of the organisation’s employment policies in

accordance with the Employee Handbook;

Ensure the fulfillment of the board’s financial and legal responsibilities to

employees;

Regularly evaluate the terms and conditions of employment within the

organisation and to report to the board about the required changes;

Build and maintain good relations and communications with employees;

Report on employment issues to the board on a quarterly basis or more

frequently if necessary;

Oversee recruitment, selection and induction procedures;

Ensure that employees receive the support, supervision and training

required to help them do their jobs to the best of their ability;

Oversee the handling of disciplinary and grievance matters according to

the agreed procedures;

Oversee the recruitment, selection and induction of the most senior

member of staff, i.e. development manager/coordinator;

Support and supervise the development manager/coordinator, including

the implementation of the PMDS.

12.2 Staff Handbook

Every organisation, regardless of size, needs agreed rules, standards and

procedures for all employees if it is to function effectively and also needs to

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establish policies that support and encourage internal staff development. It is

advisable to produce a staff/employee handbook which sets out these rules

and standards clearly, as they apply to all employees.

An Employee Handbook helps both the board and staff to be clear about roles

and responsibilities, policies, procedures and practices. It tells employees

what the organisation expects of them and also what they can expect from the

organisation. It sets out in general the legal rights of employees and also

clearly defines how the organisation intends to treat employees.

An Employee Handbook ensures that all employees are made aware of what

is expected of them, and the consequences of not achieving and maintaining

the required standards. This clarity can help to reduce significantly the

number of disputes, and where disputes or problems do arise, to provide a

framework for their resolution. It is important even for a small organization,

with as few as one or two staff, to have an Employee Handbook. In a situation

where everyone knows everyone very well and are in close contact, it can be

all the more difficult to deal with the differences, misunderstandings and

conflicts which may emerge.

Having an Employee Handbook should not lessen flexibility and co-operation

but rather enhance it by providing a basis for sorting out difficulties. In fact

while it may not seem necessary to work out these issues when everything is

going fine, this is the very time to do it. It is much more difficult to negotiate

good terms and conditions when a dispute has arisen.

It is recommended that the employer gives each employee two written

statements after recruitment, firstly a written contract of employment outlining

the terms and conditions specific to that employee and secondly a copy of the

organisation’s Employee Handbook as it applies to all staff in the organisation.

The employee should be encouraged to read it carefully, discuss it with other

staff and clarify questions or issues of concern with management.

12.1 Updating - All organisations need to update their Employee Handbook

regularly. A named person or group, e.g. the development manager,

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coordinator or staff sub-committee, should have responsibility for keeping

abreast of developments in employment law and for ensuring that appropriate

changes are made to the organisation’s terms and conditions. At the very

least the Employee Handbook should be reviewed annually.

12.2 Employment Policies - Organisations are advised to have policies on all

appropriate areas of employment so that if and when problems arise they can

be handled in a considered way. All new policies should be developed through

consultation with the employees and their representatives. It is essential that

new policies are introduced fully to all employees explaining the implications

for them. The introduction of new policies should be accompanied by training

if appropriate.

12.3 External Support and Advice - An Employee Handbook cannot and is not

meant to cover every employment issue that may arise. It is a set of

guidelines that will help management and staff to be clear about what they

can expect of each other. Employers and staff should also seek external

support and legal advice when further information or advice is required.

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13. BOARD INDUCTION

It is important to support new members of the board to take on their role with

confidence and clarity. Taking the time to have a good induction process with each

new member is essential.

New members need to understand the governance responsibilities of the board and

how the board works to ensure that it is accountable for the workings of the

organisation. It helps the new members become comfortable in their role if they are

introduced to other members and to the key issues being dealt with by the board

currently. New members should be encouraged to ask questions and to give their

views. It is also important to find out what new members have to offer in terms of

skills, expertise, areas of interest and experience.

The board should delegate responsibility for the induction of new members to the

chairperson and/or other board members. Some boards have a buddy system where

one experienced board member helps a new member to find their feet. It is also

helpful for experienced board members to talk to new members about how they have

benefitted from their membership of the board, e.g. development of skills and

knowledge, networking, knowing they are making a difference, giving back to their

community. New members need to know:

Background information about the organisation, i.e. why, when and how the

organisation was set up, major developments and/or changes, achievements

and current challenges, plans for development;

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Role and responsibilities of the board and how it operates, i.e. dates and

times of meetings, how meetings are structured, sub-committees etc.;

Expectations of board members;

Boards structures for accountability, e.g. development manager report,

treasurer’s report, staff sub-committee report;

Financial situation and funding sources;

Who is who and what are their roles, i.e. board members, development

manager/coordinator, staff, volunteers.

14. BOARD HANDBOOK

It can be helpful to provide a board handbook for all members of the board, e.g. a

ring binder with sections for:

Diagram of organisational structure;

Staff structure, names and roles;

List of board members, officers and contact details;

Board structure with role and terms of reference of sub-committees, working

groups etc. and dates of meetings for the year;

Copy of governing document, e.g. articles and memorandum of association;

Minutes of recent meetings;

Procedures for appointment and selection of board members, including

officers;

Roles of officers;

Copy of latest audited accounts and other relevant financial information;

Mission/Vision Statement;

Copy of current strategic plan and work programme;

Copy of policy documents, i.e. statements of organisational rules to ensure

that it works effectively and within the law;

Code of conduct for board members, including issues such as conflicts of

interest and confidentiality;

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Summary of most relevant legislation, i.e. requirements of the Companies

Registration Office, Health and Safety, Charities Act, Data Protection,

Equality, Employment;

Employee handbook.

The board needs to delegate responsibility for producing and updating this

handbook.

15. ROLES ON THE BOARD

15.1 Chairperson: The role of the chairperson at its most basic is to preside over

meetings of the organisation, but the role is normally much more varied and

takes in a wide range of responsibilities, including to:

Chair meetings;

Plan meetings and develop the agenda in conjunction with the secretary

and/or the most senior member of staff;

Provide leadership and ensure the effective operation of the governing

body;

Ensure that decisions made at meetings are implemented;

Work closely with the organisation’s most senior member of staff;  

Undertake the supervision and appraisal of the most senior member of

staff;

Provide a focus for the governing body of the organisation (please note,

however, that the chairperson has no more authority than any other

committee member unless this is specified in your governing document);

Act as a spokesperson for the organisation and/or the governing body;

Sign and certify the annual accounts for the organisation;

An effective chairperson is one who:

Works well with the most senior member of staff;

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Does not dominate meetings;

Listens;

Encourages and facilitates each member of the board to participate;

Is able to direct the meeting in such a way that all views are heard

without the meeting becoming bogged down on one item;

Is impartial in letting all views be heard;

Is a “big picture” thinker.

15.2 Vice chairperson: The main role of the vice chairperson is to preside over

meetings when the chairperson is absent. The vice chairperson needs all of

the skills that make for an effective chairperson as described above.

Therefore it is important to pay as much attention to the choice of the vice

chairperson as to that of the chairperson. Remember that on occasions, due

to illness, family circumstances, or the like, the vice chairperson may be

asked to fill the role of chairperson on more than a temporary basis.

The responsibilities of the vice chairperson are to:

Stand in for the chairperson if s/he is away;

Assist the chairperson with matters between meetings;

Deal with specific tasks or issues as defined by the governing body (for

example, chairing meetings or dealing with personnel matters).

15.3 Treasurer: The main role of the treasurer is to maintain a financial overview

of the organisation.  You need a person who is good at figures, understands

accounts, and can explain accounts in layperson’s terms. For organisations

with no paid staff you will also need someone who has the required time to

give to the role, as it is likely to entail a fair degree of work between meetings.

The responsibilities include:

Look after the finances;

Oversee, prepare, present and approve budgets, accounts and financial

statements;

Prepare and present understandable financial reports to the committee;

Ensure that the financial resources of the organisation meet its needs;

Ensure that appropriate accounting procedures and controls are in place;

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Liaise with relevant people about financial matters;

Advise on the financial implications of any new projects;

Prepare the annual accounts before being passed to the independent

auditor;

Present the annual accounts at the AGM.

15.4 Secretary: The role of the secretary at its most basic is to keep accurate

minutes of meetings, although its responsibilities are frequently wider and

more substantial. The responsibilities of the secretary are to:

Help the chairperson to plan meetings;

Organise the logistics of meetings;

Take and distribute minutes;

Deal with committee correspondence.

In an organisation with no paid staff the role of secretary is critical, and you need

someone who is efficient, pays attention to detail and has good administrative

skills. In an organisation with paid staff, this role is often taken on by a member of

staff. Keeping accurate minutes is a learned skill; minute takers do not need to

record every word said, yet they need to record more than just the decisions made.

Please note that the role of secretary to the board should not be confused with the

role of company secretary which is a completely separate role.

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16. STATEMENT OF RECOMMENDED PRACTICE / SORP

SORP, the Statement of Recommended Practice, Accounting and Reporting by

Charities (2005) was developed, in accordance with Accounting Standards Board

guidelines, by the Charity Commission for England and Wales, and by the Scottish

Regulator.

16 .1 While Charities SORP has no jurisdiction outside UK, most Irish charities

have voluntarily adopted it in order to follow respected practice in relation to

accounting and reporting, and most particularly to satisfy their stakeholders in

this regard. The Accounting Standards Board is satisfied that the Charities

SORP does not conflict with accounting standards or with current accounting

practices.

16 .2 Adopting Charities SORP voluntarily is prudent, therefore, for Irish NGOs,

because it provides a best practice approach in respect of accounting and

reporting. Development NGOs generally have critical stakeholders who are

expecting this level of accounting and reporting as a prerequisite of remaining

in such a stakeholder relationship.

16 .3 For an Irish NGO, therefore, it is an issue of determining the extent to which it

should comply with the Charities SORP standards. This judgment rests with

the directors as constituting the board, which must determine how much of

Charities SORP is appropriate and warranted in respect of the accounting

approach, and the subsequent annual financial statements and annual report.

16 .4 In general terms Charities SORP requires, inter alia, the following in the

financial statements and annual report:

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The Financial Statements (and particularly the Statement of Financial

Activities) to be presented in a specified layout that distinguishes, for

example, between specific categories of income and specific categories of

expenditureDetails of the objectives, aims, strategy and major activities

undertaken by the entity Reports on achievements and performance in an

informative and meaningful manner, pertinent to the affairs of the specific

NGDO;

A statement of directors’ responsibilities regarding the financial statements,

in compliance with accounting practicesA clear statement and details in

respect of the NGDO’s reserves policyA risk management statement,

outlining what the board has undertaken in respect of identifying and

understanding its risks, what steps have been put in place to quantify and

rank risks, and what initiatives are imbedded at board level to oversee the

most highly ranked risk exposures.

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