This policy paper outlines how we can improve charity governance and, by extension, the impact of the sector as a whole. In it, we address some key governance issues, and make recommendations to a number of key players in the sector and beyond.
It starts from the top: Improving governance, improving impact
2015 and 2016 have been a difficult time for charities. From Kids Company’s collapse to fundraising scandals, problems in the voluntary sector have been highlighted, charities have been scrutinised, and serious failures of governance exposed—reminding us all that the quality of its board can make or break a charity.
This paper looks at the steps needed to improve charity governance, drawing on NPC’s work with hundreds of charities and their trustee boards over more than a decade. In it, we offer recommendations to several bodies—from charity boards themselves, through to the Charity Commission. These recommendations include:
- Annual reporting by large charities to the Charity Commission (via the Statement of Recommended Practice) should focus on a charity’s impact as well as its financial standing.
- The same annual reporting should include details on training and evaluation undertaken by the board to develop its own work and remain effective.
- The Charity Commission should amend guidance on paying trustees and on allowing senior staff to sit on boards, to avoid disincentivising charities from exploring this where they have a reasonable case. This will be especially important to attracting more diverse board membership.
We think that these recommendations would help improve governance and, by extension, the impact of the sector.