Alastair Keatinge, Charity Law Partner believes that better charity governance would be most welcome, but it is important that media attention does not drive away charity trustees.
Charity trustees are customarily viewed with approval, and rightly so. Over 180,000 charity trustees in Scotland currently provide their time, expertise and energy to a huge range of good causes, and people (and animals) across the world benefit from it.
Therefore, the negative press directed towards trustees in recent weeks in the UK has been a shock to many people. 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 charities regulator and system of regulation. Nevertheless, Scottish charities have no room for complacency since the media and public 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 tenth 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.
David Robb, CEO of OSCR, wrote in Governance magazine in January 2016: “We are seeking to raise governance standards of the charity sector overall. By looking at problems at the start… the idea is that we will support charities to deal with problems before they become more significant and threaten the life of the charity and, ultimately, the trust and confidence the public has in charities.”
The first change for many charities in Scotland will happen from April this year, when they will see changes in the information they have to submit to OSCR.
With practices and expectations constantly evolving, governance has become a critical issue for charity professionals, trustees and advisers. And 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, an event which Alastair Keatinge is chairing. It’s going to be an interesting conference, especially since the keynote speaker Dorothy Dalton, leading expert in governance and founding editor of Governance magazine, will bring an overview of the governance landscape in England and Wales as well as Scotland.
One key aspect of governance 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. Certainly, 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. That can be quite a task.
Dorothy Dalton commented: "We need to work in partnership to encourage and empower trustee boards on their journey towards more effective governance. Delivering effective governance isn't easy. Those of us who serve on boards need affordable training, and practical support in lots of different ways. 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, a recovery in their reputations, and a review of fundraising approaches.
But there’s also a possible flipside: 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.
This article was featured in Friends of The Scotsman on 08/2/2016
