If you are a trustee of member of the governing body of your charity, you have clear responsibilities per your constitution and law. It is your collective to make decisions about the charity’s direction and purpose, strategies to pursue your charitable objectives, accountability and compliance. This is governance!
It is important to distinguish between governance and management. Governance is the high-level decision making, whereas management is the implementation of those high-level decisions. Generally, trustees handle governance, whereas staff and volunteers handle management, however, in small charities, trustees can be involved in management as well.
Here are 5 Key Principles of Good Governance that trustees should be concerned with:
– Firstly, an effective governing body needs to understand its role and responsibilities. Your trustees are the most senior level of leadership in your organisation and provide guidance and direction to the charity. The support garnered from the board is strategic and normally doesn’t include operational or ‘day-to-day’ management. Boards are also responsible for accountability and compliance.
– Trustees should also work well individually and as a team. Individual trustees are often sought for their skill sets and areas of expertise. Despite these individual skills, your governing body must be able to work together as a team towards a common goal. Remember, trustees may have to support decisions that are majority agreed.
– Next up, the governing body must ensure that the charity is operating for a valid purpose and that it is for public benefit. This also involves ensuring that there is a long-term strategy in place so that the charity has the vision to continue working towards its objectives and to regularly assess and review the needs that your charity is addressing.
– You must exercise appropriate control over the charitable organisation; after all, the success of a charity is down to trustees. The board should regularly review internal controls and policies and track performance. This is often achieved through several board meetings throughout the year, but involves more than just attending these meetings; trustees might be involved in sub committees or have a responsibility for assessing performance and management information more regularly than a handful of times a year.
– The board should behave with integrity and should be open, responsive and accountable. This means that individual trustees should act according to the highest ethical standards; decision making should be an individual process not affected by external forces and, where necessary, trustees should declare any conflicts or concerns to their colleagues on the board.
Using the Charity Code of Good Governance, the NCVO have created the Governance Wheel. The NCVO uses this tool in its own governance reviews and it’s great for reminding your trustees about their responsibilities and assessing their effectiveness.
Take a look at the CaSE Insurance website for more information.