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BUILDING BETTER BOARDS: THE ROLE OF CULTURE AND ETHICS

SPEAKERSDAN FRANCIS SENIOR GOVERNANCE CONSULTANT, NCVO

ROSIE CHAPMAN CHAIR, CHARITY GOVERNANCE CODE STEERING GROUP

WHAT ARE THE KEY CULTURAL OR ETHICAL CHALLENGES FACING YOUR BOARD?

HOW DO THESE DEVELOP?

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THE CODE

• 3rd iteration

• Voluntary

• Aspirational standards

• Can be adapted to context

• Developed by steering group

• Independent chair

• Significant consultation

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USING THE CODE

• www.charitygovernancecode.org

• Foundation principle 7 Universal principles, rational and outcomes

• Designed to highlight good practice

• ‘Apply or Explain’

• Larger organisations encouraged to make a statement in their annual report

• A single set of principles but different recommended practice for large and small

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PRINCIPLES OF GOOD GOVERNANCE

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FOUNDATION

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• Committed to the cause• Recognise meeting public benefit is an on-going

requirement• Understand role and legal responsibilities

• But: ‘Charity Commission’s ‘Essential Trustee’ at 12,500 words is only slightly shorter than Macbeth.’

• Commit to good governance

ORGANISATIONAL PURPOSE

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The board is clear about the charity’s aims and ensures that these are being delivered effectively and sustainably.

• Determining organisational purpose and ensure the charity stays relevant and valid

• Achieving the purpose. Clarity about desired outputs, outcomes and impacts.

• Analysing the external environment/planning for sustainability• Degree to which long-term planning takes place?• Benefits and risks of partnerships, mergers etc – post

Kids Co?• Broader responsibilities. Derived from Companies Act,

but suspect little current take-up?

LEADERSHIP

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Every charity is led by an effective board that provides strategic leadership in line with the charity’s aims and values.

• Leading the charity• The chair’s role• Appointments• Rationale, benefits and risks of subsidiaries. Tail wagging the

dog?• Leading by example

• Overly polite -v- welcoming differing views. Healthy tension -v- conflict

• Staff role in providing information, advice and feedback? (Attendance at Board meetings?)

• Commitment• Sufficient time – in between meetings as well as at the

Board?

INTEGRITY

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The board acts with integrity, adopting values and creating a culture which help achieve the organisation’s charitable purposes. The board is aware of the importance of the public’s confidence and trust in charities, and trustees undertake their duties accordingly.

• Maintaining the charity’s reputation• Code of Conduct• Acting in accordance with values

• Identifying, dealing with and recording conflicts of interest/loyalty

DECISION MAKING, RISK AND CONTROL

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The board makes sure that its decision-making processes are informed, rigorous and timely and that effective delegation, control and risk-assessment and management systems are set up and monitored.

• Delegation and control• Delegations and reserved matters documentation• Regularly Reviewing key policies and procedures

• Managing and monitoring organisational performance• Actively managing risks

• Review effectiveness of the approach as least every year• Appointing auditors and audits

• Alleged improprieties, misconduct or wrongdoing

BOARD EFFECTIVENESS

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The board works as an effective team, using the appropriate balance of skills, experience, backgrounds and knowledge to make informed decisions.

• Working as an effective team• Vice chair, or similar• Ability to work together as a team• Constructive challenge• Access to specialist in-house or external governance advice

and support. Access independent professional advice, such as legal or financial

• Reviewing the board’s composition• At least five, no more than 12

BOARD EFFECTIVENESS CONT.

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The board works as an effective team, using the appropriate balance of skills, experience, backgrounds and knowledge to make informed decisions.

• Overseeing appointments• Formal, rigorous and transparent• Good reason if exceed nine years (Should it have been 6

years?)• Elected roles (How to attract candidates who have the right

skills?)• Developing the board

• Appropriately resourced induction• Board annual review (external evaluation every three years)

and explain in annual report

DIVERSITY

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The board’s approach to diversity supports its effectiveness, leadership and decision making.

• Recruiting diverse trustees• No explicit percentages; e.g. for women. Include diversity in

annual board reviews.• Training or reflection on diversity. Do many charities do this?• Positive effort to remove obstacles. Would payment help?• Monitoring and reporting

• Publish an annual description. How easy will charities find this?

OPEN AND ACCOUNTABLE

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The board leads the organisation in being transparent and accountable. The charity is open in its work, unless there is good reason for it not to be.

• Communicating/consulting with stakeholders• Developing a culture of openness within the charity

• A register of interest and agreed approach for how these are communicated publicly (Should it be public?)

• Publish remuneration levels of senior staff (Low base?)• Member engagement

CHARITY GOVERNANCE CODE

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How would the code support you in developing your governance?

In particular how will it help tackle the cultural and ethical issues discussed earlier?

Are there any further tools, resources or templates you would require to support you with this?

EARLY ADOPTERS

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THANK YOUWWW.CHARITYGOVERNANCECODE.ORG

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