Creating an effective charity board
27 February 2024 4 minute read
A recent seminar hosted by NPC, in partnership with The Clothworkers’ Company, looked at how trustees can create effective charity boards in the age of permacrisis. The event was chaired by Sally Bagwell, Associate Director at NPC, and our speakers were Kit Beazley, Chair of the Finance Innovation Lab, Sonal Shenai, Investment Director at Impetus, and Shan Abdullah, trustee at the Thalidomide Trust.
In an era marked by uncertainty and rapid change, the role of charity boards has never been more crucial. To navigate the complex landscape of the social sector, trustees must be able to make informed decisions, possess the agility to adapt, prioritise board diversity, and manage risks effectively.
So, what should trustees keep in mind when trying to create effective charity boards? Here are three key tips from the seminar:
1. Create a rhythm for your board: inside and outside of meetings
Organising meetings in a structured way that includes pre, during, and post meeting activities can facilitate the efficient management and completion of tasks. Setting meeting agendas that cover strategy, risks, and governance subjects can not only lay the groundwork for productive meetings, but also encourage participation. Following board meetings, implementing a feedback-loop system, such as running surveys, is key to ensuring consistent progress and transparent communication.
We would also encourage trustees to explore free resources, such as the Charity Commision’s guidance for setting up and running a charity and the Charity Governance code, which outlines what a charity should and shouldn’t do to maintain its status. However, beyond following these guidelines, assessing board effectiveness also involves encouraging healthy tension and challenge during board meetings. If discussions lack this, trustees may not be probing enough, potentially hindering fruitful governance.
2. Good governance is all about having a mission-focus
According to Sonal Shenai, Investment Director at Impetus, a board’s main responsibility is to ensure that its organisation fulfills its mission, with meaningful outcomes serving as the ultimate measure of its impact. This can be achieved through focusing on the sustainability and direction of the charity, and working closely with the executive team to maximise impact in the lives of the people that they serve. As the guardians of a charity’s mission, boards play an integral role in both maintaining and enacting changes to its course. The trustees’ ownership and understanding of the charity’s mission is also a key element that contributes to them effectively raising funds and establishing the charity’s brand. Some practical ways in which boards can enhance impact and ensure meaningful involvement is by integrating impact-focused planning into annual cycles, conducting regular meetings, and facilitating respectful dialogue.
A diverse blend of skills, backgrounds, opinions, and capabilities when composing a board was also emphasised as an important step when recruiting trustees, as it fosters a holistic view on issues and allows prevailing attitudes to be challenged. It is also important to think about meeting dynamics and taking on the shared responsibility of allowing space for every voice to be heard. Live surveys can be conducted throughout the meetings to gain raw emotions and feedback from participants. All three speakers also spoke about the importance of working closely with beneficiaries—be it by getting up to speed on the organisations work with service users beforehand, inviting a representative of service users to attend the meeting, or observing frontline work prior to board meetings.
3. It’s time to update the traditional risk register
Traditional risk registers are usually comprehensive documents which categorise risks into high, medium, and low impact. However, they often serve more as compliance documents than decision-making tools. An abundance of data may actually overshadow important discussions, as emphasised by Shan Abdullah, trustee at the Thalidomide Trust.
A reimagined risk framework divides risks into persistent (external risks that remain largely unchanged), current, and horizon (future risks) categories, allowing for a more streamlined approach to risk management. From experience, Shan explained that removing most of the persistent risks and grouping them into prevalent themes allowed the board to focus on only the most pressing issues, without getting lost in detail. It enabled the board to reflect on whether their processes were working the way that they would like them to, whether the charity was on plan, and if the metrics used were appropriate for the charity’s objectives, all elements of effective decision-making and impact measurement. Keeping the horizon risks on record but away from trustees was also suggested as a way to create an effective charity board that is aware of the risks involved.
To catch up on this event, visit our YouTube channel to view the full recording. Or if you’d like to explore this topic in more depth, why not read our latest guide for trustees on how to govern in the age of permacrisis.
Our next trusteeship event, in partnership with the Clothworkers Company, will take place on 20 March 2024, where we’ll be looking at what charity trustees need to know about campaigning.
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