Many charities think that they meet this standard but is that strictly true? I was preparing a seminar on the subject of an effective charity and as part of this I wanted to make a comparison between the old Charity Commission standard of the Hallmarks of an Effective Charity with the new Charity Governance Code that has now been in place for several years and has replaced the Hallmarks publication. I must admit to preferring the old hallmarks definitions which were as follows :-
1 it was clear about its purpose and direction
2 he had a strong board
3 it was fit for purpose
4 it was always learning and improving
5 it was financially sound and prudent and finally
6 it was accountable and transparent
However, the newer code of governance has seven different principles which are as follows :-
1 it has organizational purpose and direction
2 it shows leadership
3 it has integrity
4 there is decision-making risk management and control
5 there is board effectiveness
6 it has diversity and finally
7 it displays openness and accountability .
One can see certain similarities between the two particularly the final ones of transparency. I find it somewhat ironic that the new code seems to feel that integrity was a necessary addition given that issues of integrity have continued to plague the sector notwithstanding the new code of governance.
I also found it interesting that the words “fit for purpose” have been excluded from the principles of the new code. One of the most consistent problems I have found in carrying out governance reviews is that so often the one thing the charity is often not is entirely fit for purpose. I use the word “entirely” deliberately as it is not always the objectives which are out of date but those charged with the governance of the charity.
I am not talking here about length of service but the lack of exposure to trustee training and to new ideas by a refresh of the governing body. In my opinion a refresh is necessary on a regular basis for the charity to get the best out of the governing team.
Intriguingly one of the most satisfying governance reviews I have carried out in recent years has been a charity who called me in after they had made significant changes to their operations to ensure that they were going in the right direction and to see if they had missed anything significant.
In practice they had made a very successful start to the process and the biggest issue I faced was explaining that certain changes could not be carried out overnight but needed a certain amount of reflection and discussion. Some changes in structure needed to be made to make the change more effective but there is no doubt my life was made easier by a commitment from all the charities to make changes.
So, in my eyes, the most effective way of achieving an effective charity is to ensure that the board are firstly prepared for change and secondly for them to have robust discussion but ensuring that they speak with one voice.
If you feel the need for an external view of your effectiveness, please give us a call on 0116 478 2871 or email us at info@intheroundavisors.com
