Pulling together for better governance

Governance is getting a lot of attention recently, and rightly so. One million trustees give their time and energy to the sector—that’s a lot of people to corral into good practice.

NPC has long been promoting good governance. Board matters, our first good governance publication, came out in 2009, and has been followed by about 20 trusteeship seminars, which we have written up, run in partnership with Clothworkers’ Company.

There’s plenty going on elsewhere, with many players in the sector putting their shoulders to the wheel. It’s great to see so much collaboration, and we are delighted to be involved in initiatives such as the Clothworkers’ Company’s Charity Governance Awards—which aim to inspire boards to great practice. Another move to watch is the Cass Centre for Charity Effectiveness, and Cranfield Trust’s initiative to raise awareness of trustee responsibilities—at scale. The Charity Commission is backing such initiatives and has a plan of its own. Funders such as Barrow Cadbury are getting involved, as are several major accounting firms. And the Institute of Directors is at last offering a course for trustees

So it seemed a good moment for NPC to throw our weight behind all these efforts to improve and reform the sector’s governance. Our latest publication, It starts from the top, sets out our position on the issues being debated, and posits recommendations for discussion with others.

In the report, we tried to get under the skin of what might motivate boards to improve themselves. So our recommendations are mainly centred on expanding requirements for charities to report on how they govern themselves—especially larger charities, which should be allocating resources to board evaluations, training and board development. In the current SORP, charities don’t really have to do much about this.

Our argument for more reporting is two-fold:

• Peer pressure: Boards are more likely to prioritise improving their governance if they have to tell people what they are doing, and they see their peers reporting good practice.
• Transparency: Visibility on how charities govern themselves—and not just the basics—is important for rebuilding build public trust.

But we don’t want to be disproportionate on this. Our sights are set on charities with resources—for with resources comes responsibility. We don’t want to put mandatory burdens on small, hard-pressed, volunteer-run groups that might struggle to get everything right. We also make the point that a governance improvement fund could help those with fewer means. We know public money is tight, but if the government contributes to capacity funding for social investment and contracting, why not governance?

More contentious is our suggestion that it should be easier to pay trustees. We addressed this topic in a Clothworkers’ Trusteeship seminars back in 2012. Our expert panel put convincing arguments on both sides. The debate that followed was ferocious and opinions were divided. The briefing paper that followed the debate makes a great read. Those who felt trustees should not be paid are worried about sector reputation and ethos. Those in favour wanted flexibility to recruit people who do not have the resources to do it for free—carers, disabled people, those experiencing severe disadvantage, for example.

Here at NPC, we just about came out in favour—believing we should enable charities to choose what is best for them when trying to attract diverse and representative boards. But we don’t think the practice should become a widespread professionalisation process, and as a trustee myself I’d not expect to be paid.

So NPC would welcome debate on our ideas, and we look forward to an autumn of activity with our partners and colleagues to find practical ways to increase the means and motivation for board improvement.

Download It starts from the top and head to our events page for upcoming trustee events in our ongoing series.