In this guide:
- Foreword by Dan Corry
- Introduction: Why leadership matters
- Decision making during and beyond the Covid crisis
- How to… Step by step guides on everything from making meetings matter to turning decisions into action
Authors: Angelika Love, Tom Gash, Rohati Chapman, Charlotte Lamb
Charity boards have played a major role in helping their organisations respond and adapt to the Covid-19 crisis. The type and pace of decision making by trustees has had to change—and many of those decisions haven’t been easy. As we enter the recovery phase of this crisis and prepare for the future, charity boards and leadership teams will want to make decisions that allow them to seize opportunities, manage risks and embrace change.
At NPC we are always working to share best practice, discuss, and report on new ideas and policies designed to improve governance across the charity sector and hence to improve the impact the sector can achieve. Resources like Above and beyond trusteeship and our Walking the Talk series have drawn on our experience and the insight of trustees to share ways charity boards can make decisions that will maximise impact. Throughout the Covid-19 crisis, governance has been on our minds, from considering what charity trustees should be thinking about as the crisis hit, to how trustees can build resilience through and beyond the crisis.
We are also always on the lookout to expand the set of tools and knowledge the charity sector can draw on to improve and innovate. What better place to look for ways to strengthen decision making by charity boards than looking to decision science itself?
So, NPC have partnered with decision-science consultancy Leapwise, who work mainly with senior public and private sector leaders to support strategic decision-making and build more effective governance and decision-making approaches across organisations. We are working together to explore how decision making by charity boards has changed during the crisis, and to provide support on how to strengthen this for the next chapter. Leapwise were keen to use their expertise in decision science to have a positive social impact. NPC saw this as a great opportunity to widen the sector’s toolkit at an important time.
I would like to thank many of our colleagues in the sector who have contributed to this research and to Leapwise for offering their expertise. NPC hope this work will support trustees and leadership teams looking to make better decisions as we rebuild a stronger, more resilient charity sector.
Dan Corry, Chief Executive, NPC
Charity leaders are facing the toughest decisions many will have ever had to make
There has rarely been a time so challenging for board members, whether executive or non-executive. As we began 2020, back when Covid was blissfully unknown to most of us, charities were already facing up to complex issues including Brexit, economic uncertainty, a narrowing public focus on fewer social issues, and a struggle to keep pace with accelerating technology and changes to how we work.
Covid-19 has multiplied uncertainty and volatility. Changes already underway have accelerated. For many, demand for services has increased, whilst the nightmare of fundraising in a pandemic has thrown many charities into acute financial dilemmas. Uncertainty about what comes next has left many unsure about their medium- to long-term survival.
And yet, despite such a worrying outlook, our research on board decision-making found that serving on the board of a charity continues to bring many trustees a lot of joy. “Seeing services in action” and “leading and learning from interesting individuals who believe in the values of the organisation they serve” are just two of many reasons trustees give for why they do it.
So, we can be confident that the leaders are there. What matters now is that the right decisions are made for charities and the people they serve.
This is the moment to take risks. If you are not taking risks when you have a social purpose and the whole of your ecosystem has changed – what the hell are you there for?
About this research
To support charities through this time of high-stakes decision-making, NPC partnered with decision-making consultancy Leapwise. Leapwise works with senior leaders to support strategic decision-making and build more effective governance and decision-making approaches across organisations. They wanted to support this work on a pro bono basis to support their social impact. NPC wanted to bring different perspectives and expertise to support the sector.
The Leapwise team interviewed board development experts, chairs and chief executives of medium and large charities in Britain about their approach to decision-making. The team also surveyed 34 executive and non-executive charity Board members on the challenges faced by charity Boards and the effect of the Covid-19 pandemic on charity governance. And they drew on their previous research and experiences around board and senior leadership decision-making. NPC provided detailed input based on their own research and experience, alongside editorial oversight and publication support.
For more on the Leapwise authors of this paper, head to leapwiseadvisory.com/about/our-people/.
Good decision-making and governance have always been vital, especially in a crisis. Research in 2016 on charities in financial trouble suggests many seek help too late. Those charities who survived did so, in part, because their boards practiced good governance. They planned ahead, they engaged more, and they sought professional advice.
The unpredictability of Covid makes effective decision-making harder than ever. Boards face existential decisions that they must make quickly amidst a cloud of uncertainty. To prevent a cash-flow crisis, financial decisions are being treated as more pressing. Our research also found some charities are trialling new services faster than they would have done. In this climate of uncertainty and change, some executive teams and boards are actively reforming their decision-making processes, drafting more precise proposals and assessing them with more careful deliberation than before.
This research identified four main domains where boards were making critical decisions in a crisis:
- Organisational performance
- Operating models
- Decision-making infrastructure
The Covid-19 pandemic is catalysing changes in charities’ leadership.
- Being a chief executive is stressful at the best of times, and many are now expressing fears of burn-out. While reluctant to leave their organisations in a time of uncertainty, this could accelerate people’s decisions to make career changes.
- Some introspective chief executives have come to realise that someone with a different skill set is needed to lead the organisation through its next chapter.
- For many trustees, charity governance is part of a portfolio career. In the current economic climate, some are no longer able to volunteer their time and energy as consistently as before, despite their expertise being most needed. Others are getting more involved in charity work than ever before.
Major changes in charity leadership can make succession planning and recruitment harder. Some boards have halted recruitment altogether. Meanwhile, others are finding that Covid-19 restrictions are contributing to less satisfying onboarding processes, for example, because trustees are unable to join frontline staff to see the charity in action.
2. Organisational performance
Charities have had to pivot fast to deliver their mission through a pandemic.
- As charities move from immediate reaction to a ‘re-set’ stage, boards will be stewarding conversations about what changes should be kept and what needs to be done differently.
- A core responsibility will be to address underperformance, relating to both people and systems, which were previously tolerated while pursuing other goals, but which are now critical.
Never waste a crisis.
3. Organisational operating model
The Covid-19 pandemic is challenging charities to re-think their operating model to better achieve their mission and serve communities and service users.
- CAF reported in April that 23% of charities were refocusing their activities. Such changes may become permanent.
- To continue achieving their mission in a new social and economic environment, some charities will create new services while eliminating others. Some may decide to make online delivery permanent after delivering services virtually during lockdown.
- More fundamental restructuring processes are also on the horizon. During lockdown, 18% of charities surveyed by CAF said they were now collaborating with other organisations. Going forward, charities may be making major decisions on merging and will need more information to do so strategically. NPC’s publication Let’s talk mission and merger argues that mergers are an extension of collective action, and therefore a means of achieving great impact.
Covid-19 should be seen by Boards as an opportunity to create the right kind of organisation for their wider social mission.
4. Decision-making infrastructure
In many charities, coronavirus has revealed weaknesses that have impeded decision-making for a long time but were never critical enough to be a priority. For example, problems around:
- Professional relationships – Including relationships between the board and the executive team; between the chair and the chief executive; and between the chair and other trustees, all of which have a significant bearing on decision-making.
- Information management – Including what information is needed to reach high quality decisions; records of the decisions that have been reached; and progress on implementation.
- Strategic operations – Including an understanding of medium- and long-term strategic objectives; management of reserves and investments; and appetite for risk within the board and the executive.
Coronavirus is a game-changing moment generating ripe opportunities for chairs and chief executives to think about how decision-making can be improved. Nevertheless, some board development experts interviewed for this research worry that, as the crisis progresses and trustees feel they have created some stability for their organisation, some will begin to disengage from proactive governance again.
This would be a missed opportunity. The decisions that will shape the British charity landscape for decades to come are only now appearing on the horizon.
I hope boards will get excited again about the recovery phase.
So how should trustees respond?
Governance and decision-making systems are undoubtedly feeling the pressure, but this isn’t always translating into changes in approach. Capacity is limited, risk-appetite is down, and many boards are already overwhelmed with unfamiliar ways of working.
We therefore focus our advice on small and easy-to-try ‘experiments’ that have potential to improve the effectiveness of board meetings and decision-making.
We encourage chairs to try some of these tools and to adopt a validated learning approach to test what works for their board. Some of the techniques we suggest are provided by the experts and leaders we spoke to. Others are drawn from decision science and the experience of Leapwise, the decision science consultancy, and from NPC’s work with boards and leadership teams across the social sector.
We are all feeling a bit MS Teams fatigued, especially in large meetings. I would like to learn how to make virtual boards more effective.
In this guide we explore the simple yet significant changes you can make to how your board works, so you can make the best decisions for your charity in a time of crisis. We begin with the basics; how to make meetings matter and how to write better board papers. Next, we discuss how to ensure decisions are followed through. Finally, we examine how to stay relevant and how to instil a culture of continuous learning.
By combining insights on effective practice with easy-to-implement tools based on decision-science, our aim is to arm you with strategies to shift from coping with crisis to making the best decisions for a successful recovery beyond the pandemic.
Decision-making is not just about choosing one option over another. It starts with what happens before that choice is put in front of the board.
We are grateful to the chairs, chief executives and board development experts who contributed their experiences and expertise to this guide.
“This is the moment to take risks. If you are not taking risks when you have a social purpose and the whole of your ecosystem has changed – what the hell are you there for? It comes down to risk appetite. In order to achieve your purpose, rather than being protective and thinking about how to manage risk, ask yourself: what level of risk do you need to take? Get clear on risk appetite before you come into the discussion about risk management.”
Penny Lawrence, Chair of Refugee Action
“Focussing on harnessing opportunities as much as managing risk will make for much more impactful organisations. There is more risk to manage now, but UK charities have shown that they are really good at seizing opportunities.”
Charlotte Lamb, Strategy Principal at NPC
“The effectiveness of Board meetings depends a lot on planning the agenda. You need to be clear on what you want out of each item and make sure that all the inputs you are going to need are available. Chairs might have to tee up a couple of Trustees in advance to contribute their perspective to a specific item. They also need to ensure that the right member of staff is there to provide expertise in the room.”
Andrew Hudson, Vice Chair of Volunteering Matters
“Ask yourselves: How can we achieve our vision when so much is changing? Boards that are able to hold space for the volatility, the difficult decisions, while keeping their eye on the mission of their organisation, and on the people linked to it – those are the Boards that will be able to sustain their charities.”
Tesse Akpeki, Board Development Expert at Bates Wells & Braithwaite LLP
“You need to know the starting point of where you are going next. Charities need to go through a full and frank review. Coming out of the crisis, ask yourself: what do we now look like as an organisation? Has the pandemic effected our whole model as a charity?”
Terry Duddy, Chair of Catch22
“Trustees are not only responsible for fulfilling financial and legal duties, but they are fundamentally guardians of their charity’s impact. Boards should always think about how they can serve people and communities in the best possible way. Impact, in addition to finance and legal, should always be a lens through which Boards are making their decisions. One positive about Covid-19 is that some Boards have adapted quickly to meet the changing needs of people and communities. We have seen some of the best of governance in that context.”
Katie Boswell, Associate Director Strategy & Leadership at NPC
“Having a clear vision for the charity, which is shared by Trustees and staff, is essential. So too is a realistic strategy for realising the vision. The investment of time and effort to develop a vision and strategy will ultimately pay dividends.”
Ed Newell, Chief Executive of Cumberland Lodge
“Charities should be about doing the best for the people they want to help. When times are tough, that will make for difficult decisions. But if you keep that as the north star, you are going to be going in the right direction.”
Dan Corry, Chief Executive of NPC
“Chairs, continue to be challenging and supportive, but make sure you communicate clearly and make sure that you work very closely with the B and the senior team in the time of crisis.”
Baroness Usha Prashar, Chair of Cumberland Lodge
“Remember that we are all on the same side, trying to do the same thing. We just have different roles to play.”
Arvinda Gohil, Chief Executive of Central YMCA
“The effectiveness of the relationship between Chair and CEO is all about trust. There is a responsibility on the Executive not to be defensive, to be open towards Trustees, to recognise that people are giving their time freely. Make sure Trustees are properly informed, so they can execute their responsibilities in a considered and fair way. Transparency can be uncomfortable, but you have to be open.”
Chris Wright, Chief Executive of Catch22
“There is a real need to be clear about the questions that need answering and the discussions that need to be had. Focus on the things that will make the biggest difference.”
Lynda Thomas, Chief Executive of Macmillan Cancer Research
“You have to remain absolutely focussed on your core purpose. Make necessary adjustments to keep the show on the road but try to keep your core purpose in mind. Adjust for what Covid-19 may have done to that but try not to let it distract you from the aim of your charity.”
Richard Murley, Chair of Macmillan Cancer Research
Coronavirus is a systemic change that demands a systemic response. We need to plot a more resilient, more equitable, more progressive future for our sector.
This guide draws on the experiences and insights of active, ambitious trustees, as well as NPC’s own knowledge gained over nearly 15 years working with charities and funders. We use these insights to explore how boards can get the most from their organisations and do the best for their beneficiaries.
A charity’s trustees are responsible for identifying, prioritising and managing its risks, as well as opportunities. As this crisis drags on, and a major recession becomes ever more likely, many will need to switch focus to how they deliver their mission over the medium term.
Covid-19 means charities must develop adaptive strategies, but how can we do this well?
The country is in a very deep crisis. At NPC we are working with philanthropists and partners on how they can more effectively fund charities now, and we want to hear your ideas about what more can be done.