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‘Wilfully blind’ or in Need of Better Training?

Posted: 1st March 2016

Alastair Keatinge, Charity Law Partner at Lindsays discusses how improving charity governance means encouraging and empowering trustee boards, he believes that better governance would be most welcome, but it is important that media attention does not drive away charity trustees.

Over 180,000 charity trustees in Scotland currently provide their time, expertise and energy to a huge range of good causes, benefiting people (and animals) across the world. Therefore, the negative press directed towards trustees recently, has shocked many. Particularly scathing was the House of Commons Public Administration and Constitutional Affairs Committee’s report on charity fundraising, whose Chair Bernard Jenkin MP referred to charity trustees as being “either not competent, or wilfully blind to what was being done in their names”.

Various issues have brought on this disapproval, including fundraising practices; events at Kids Company; and criticisms of executive pay in the sector. Most of these issues relate to charities registered in England and Wales, rather than Scotland, which has a different charity regulator and system of regulation. Nevertheless, Scottish charities have no room for complacency since the spotlight is firmly angled on charity governance and slip-ups.

The Office of the Scottish Charities Regulator (OSCR) is already ahead of its English and Welsh counterpart (the Charity Commission) in this. Celebrating its 10th year in 2016, OSCR has said it is moving towards a new approach of ‘targeted regulation’. This includes promoting transparency, collecting different information, and focusing more closely on governance and risk in individual charities.

With practices and expectations constantly evolving, governance has become a critical issue for charity professionals, trustees and advisers. It’s a sign of just how far governance has risen up the agenda that ‘Governance Perspectives’ is the theme of this year’s WS Charities Conference 2016. One key aspect which will be much discussed at the conference is just what ‘governance’ entails. For all the talk about governance in the media, charities and trustees are often slightly hazy, and also nervous, about this. It’s a wide-ranging term, which brings with it wide-ranging responsibilities, among them: financial responsibilities, relationships with staff and volunteers; board composition, including optimum numbers of trustees and the required balance of skills and experience; board evaluation and setting KPIs; embedding good collective decision-making processes; and fund-raising strategies and practices.

What’s clear from this list is that charity trustees should go beyond the purely legal considerations of their role to look at all issues relating to the governance and sustainability of their charity.

Dorothy Dalton, founding editor of Governance magazine commented: “We need to work in partnership to encourage and empower trustee boards on their journey towards more effective governance. By working together, trustees, chairs, CEOs, regulators and advisers can do much to raise the quality of governance generally and within individual charities.”

There will undoubtedly be good outcomes from turning the spotlight on the governance of charities and the responsibilities of trustees – greater transparency, better management, reputation recovery and a review of fundraising approaches. The possible flipside is that large numbers of trustees, daunted by the media flak, will stand down from their roles; and that many potential trustees decide not to do it. Therefore, charity lawyers and other charity advisers need to help trustees understand good governance and their role in delivering it. Society needs us to do that.

Business Comment

Business Comment is the Edinburgh Chamber of Commerce’s bi-monthly magazine. It provides insight on Edinburgh’s vibrant business community, with features on the city’s key sectors, interviews with leading figures and news on new business developments in the capital.
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