The Charity Governance Code: we should celebrate and promote it, but a few points deserve further thought.

The Charity Governance Code, launched in July, is an excellent and very useful piece of work that deserves to be widely promoted among charities of all kinds.

1. A large majority of the difficulties into which charities sometimes fall is attributable to flaws in governance. So the Code’s dull title belies its vivid relevance to charities’ effectiveness and good reputation. I agree with all its fundamentals and its balanced coverage. It is usable and useful to real life Trustees. It is good that it has chosen to be stretching, setting the good practice bar high. I shall not go into the detail of all the things I like, as there are so many. The excellent Chair of the Group that produced the report, Rosie Chapman, and her team drawn from umbrella bodies, have done an important job for the sector well.
2. There are nevertheless a few issues that might benefit from further reflection, adjustment or elaboration – either in the next version of the Code itself or in accompanying guidance that might be offered by umbrella bodies.
3. Firstly, is the document sufficiently accessible and evidently relevant to those charities that do not think of themselves as charities with Boards. For example, charities for the advancement of religion (at least one in six of all charities) may often not think of themselves in this way. Is the preamble and the “marketing” of the Code sufficiently geared to overcoming this problem (The Essential Trustee takes more trouble over this)? Has there been careful consultation with networks of churches, mosques and the like to ensure that this Code is perceived to be relevant to them? Because it really is. If such consultation has not yet happened with this and other sub-sectors who are charities but may not think of themselves like that, perhaps it should take place now.
4. Secondly, more than once I felt that the importance of putting the long term interests of beneficiaries first was under-stated. There are lists in the Code where beneficiaries are treated as if (it seemed to me) on a par with donors, the public, and other stakeholders, but they should not be on a par. Donor or public preferences should not be wagging the dog. To take just one example, the Trustees of the Council for National Parks have their work cut out trying to protect and promote the interest of all those who benefit from National Parks in particular as their fundamental priority (not just one “stakeholder” among others). The (valid) case for a wider approach where Trustees are also aware and respectful of donors, take into account public opinion more generally and the wider interests of the charity sector, surely needs to be located more clearly within that framework?
5. Indeed, the Code or supplements to it could also add some guidance on how conflicts between the interests of a charity’s beneficiaries and the interests or views of other stakeholders should be approached? They happen.
6. Thirdly, the Code suggests that Boards should have the possibility of merger as a specific point on their radar, but there is no mention of de-merger, or spinning off subsidiaries or new charities to focus on a particular specialism. Why not? Many excellent developments in the charity sector have resulted from de-merger: witness all the important bodies, now independent, spun off from NCVO over the years – Age Concern, YHA, CABx, BOND, and many others. Preoccupation with merger is one-eyed.
7. Fourthly, I felt there was not enough emphasis on the familiar point that those elected to a Board by a particular constituency must put the collective interest of the charity first, not just the sectional interest which they “represent”. This mistake is the source of so much woe that it may deserve special mention in the Code?
8. Fifthly, so much good material is included about delegation from Trustees to staff in larger charities that it seems churlish to ask for more. But I felt that the problem of Trustees (including but not restricted to Chairs) poking around in detail and getting all “hands on” in areas supposed to be delegated, thereby demoralising both staff and other Trustees, is so widespread that it might deserve a more emphatic mention. This is reinforced by the fact that finger-wagging at Trustees in the wake of the fundraising and other scandals may have unnerved Trustees and tended to encourage excessive interference.
9. Another possible addition is how best to approach problems of interpreting the division of labour (Trustees/staff) in practice when the border lines are genuinely blurred. It is not enough to say that the borderlines should be clear when in practice they sometimes aren’t. For example, the wording of a larger charity’s public messaging, which is virtually continuous, is an operational matter, but it can (if it goes wrong) affect reputation, compromise values or have other impacts in the Trustees’ domain. And fundraising practices that seemed operational turned out to have major impacts for Trustees’ proper concerns. So should the Code or its supplements have more to say about how to cope with this dilemma?
10. Finally, there might be a case for including, in coverage of the Board’s strategic review function, an explicit mention of reviewing the appropriate balance between practical action, service delivery, awareness-raising and advocacy/influencing, as means for securing the best long term results for the cause? (Yes, I know, thereby hangs a tale.)
11. Those are some candidates for possible tweaking or elaboration. But the most important message is: along with the Charity Commission’s The Essential Trustee, this Charity Governance Code really can help charities do their work better. Let’s get behind it, promote and use it.

 

 

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