What can trustees learn from Kids Company?
30 October 2015
Kids Company has been all over the news. This week we had the report into the charity from the National Audit Office, and before that the Public Administration Select Committee interrogated its colourful CEO and famous chair. In the build-up to that session, extracts of a private paper about Kids Company produced by NPC in 2006 emerged in the press, and its warnings were described as ‘depressingly prescient’ by an unnamed Cabinet Office source. The report was shared at the time with Kids Company trustees and the CEO.
It is nice to be called prescient, and indeed to see that the analysis NPC did way back was absolutely on the button—even if NPC never intended the report to be public.
Much of this whole issue boils down to the way that trustees play their role. It is not easy to do a first-rate job on the board of a charity—and too many people join thinking it is. It is unpaid and can be very time-consuming, particularly when things go wrong. But the Kids Company example highlights the need for engaged trustees who can steer charities through the lean times as well as the more comfortable times. Lessons include:
- Trustees are responsible for the actions of a charity. If anything goes wrong operationally, either in relation to safeguarding, health and safety, or finances, the buck stops with you. Trustees aren’t there to micromanage. They need to be confident that management are up to scratch, and are following good processes and practice.
- The Board is responsible for appointing and retaining the CEO. Not the other way around. Don’t be distracted by celebrity-style leadership. Do ask difficult questions about leadership style, professional boundaries, and genuine impact. Have a formal supervision process, so that the board has the power to change leadership if it goes off track. Charities need different leadership styles at different times; a start-up entrepreneur, for example, with all their verve and big ideas, may not be the best leader for a phase of consolidation.
- The stability and quality of the entire management team is vital to success, and is a useful bellwether if things going wrong. A revolving door should give trustees reason to ponder. Are the departures linked to the approach taken by the Chief Exec? Do staff know something the Board doesn’t?
- Understanding your impact is crucial. Trustees are the charity’s guardians of purpose and are ultimately responsible for ensuring impact. You must be happy with the evidence of your impact. Claims about how many people are reached and to what extent lives are changed must be tested robustly. Be confident that the team is collecting reliable data (and not, for example, confusing visits with numbers of individuals), and is assessing dispassionately whether beneficiaries benefit. Over-claiming helps no one. Ignoring adverse effects causes harm. Learn lessons from the data—a brave board will admit that some activities work and others don’t, and will reallocate resources accordingly.
- It’s important to listen to criticism with good grace and to learn from it. No one likes to be criticised, but if you engage with criticism and listen then you are likely to learn lessons that will benefit your beneficiaries. And you will be respected for listening.
- Funds must be set aside for emergencies, especially if you are dealing with vulnerable people who would be especially affected by sudden abandonment. At the very least, you should have stable reserves in case the charity hits any trouble—three to twelve months expenditure is a good benchmark.
When a high-profile charity collapses, this not only puts beneficiaries at risk—as well as staff and volunteers—it can also compromise the credibility of the sector. It doesn’t have to happen. With proper leadership, this sort of situation need never arise.