Good governance in practice

Charity governance is often subject to criticism, but what really goes on behind boardroom doors remains a mystery to many. Trustees are in short supply, and a better understanding of the way things work can only be a good thing for increasing the supply of top-notch charity governors. To sharpen the skills of existing trustees—and lift the veil for new recruits—NPC and the Clothworkers’ Company held a seminar (fully summarised in our briefing) to discuss what it takes.

The Code of Good Governance, developed by a number of leading charity sector organisations, outlines six key principles of effective board governance. Here is a summary of the principles, and insights our seminar participants contributed to each:

1. Understand your role: First and foremost you should understand the legal and technical aspects of what trusteeship means. More than this, though, you should understand your particular role in your organisation.  Familiarise yourself with your organisation’s governing document, and understand what you bring to the board as an individual. Perhaps talk to your chair about why you were taken on.
2. Ensure the delivery of organisational purpose: The charity’s objects are at the heart of a trustee’s role; always keep in mind the need for a sound strategy that continually works towards improving the lives of your beneficiaries.
3. Work  effectively as an individual and as part of a team: Good governance requires group decision making, but make sure you also bring your own views and expertise to the table—that’s why you’re there after all. It’s worth having in place some method of appraisal, so trustees can talk about their own performance and that of the board as a whole. The chair should get the most out of trustees, and make sure they’re always adding value.
4. Exercise effective control: The level of involvement of trustees in day-to-day operations will vary from organisation to organisation, particularly in relation to its size and resources. But ‘being in control’ doesn’t—and usually shouldn’t—mean micro-management. It’s important that trustees are able to maintain a broad oversight of the organisation and remain objective. When delegating, though, putting in place strong and robust checks and balances is vital.
5. Behave with integrity: Be aware of the rules and regulations surrounding conflicts of interest, and ensure any transactions you initiate are within your powers as an organisation, and authorised by your governing document. Any action that might be of personal benefit should comply with Charity Commission regulations on self-dealing. Keep in mind that conflicts of interest can be emotional, as well as financial, so be sure that all decisions are made with the charity’s best interests at heart.
6. Be open and accountable: Good internal and external communication is central to achieving visible and accountable governance. As well as statutory duties relating to annual reports and accounts, you need to make sure the information you put out is accessible to all your stakeholders. Internally, an ongoing dialogue between the board and CEO is key—but remember, you should keep in mind the need to interact with the management team, and with staff, volunteers and beneficiaries too.