Now is the time for a Charity Governance Review

Most charities have had a difficult year due to the pandemic and they have been affected on many levels – including their service delivery and their ability to effectively fundraise.  Many will have adapted in a number of ways to ensure they have been able to continue effectively.  As the lockdown continues to ease, now is a good time for charity trustees and management to carry out a governance review.

External governance reviews should be carried out every 3-5 years and internal reviews every 1-2 years.  Ensuring a charity is prepared to face both internal and external crisis is important and it also allows trustees to refresh their knowledge of best practice.

The following should be considered as a minimum:

• Review all trustees and executives to make sure they are all suitably skilled with the knowledge and experience to ensure there are strong governance measures in place and they can be implemented as intended.
• That there are clear reporting structures in place which enables trustees to be fully informed of all of the charity’s work.
• Have a risk register which is up to date along with the policies to support it.  It is essential that the correct systems are in place which allow the reporting, recording and escalation of serious incidents and for handling all complaints.
• Ensure safeguarding monitoring and reporting structures are in place and are reviewed regularly.
• If there are any agreements or relationships with other charities or subsidiaries, make sure that these are documented correctly and kept up to date so that there are no duplications or gaps in the provision of services.

In July 2020 the Charity Commission published a regulatory alert of 600 large service delivery charities and over the last year there have been a number of inquiry reports published which have also raised a number of governance issues, with some regularly being identified.  These include:

• Unauthorised trustee benefits and conflicts of interest which have not been identified or are not being managed properly.
• Financial control issues and failures.
• Failure to make serious incident reports to the relevant authority

Marianne Webb comments: “We can work with charities and advise on a range of legal issues to ensure they are compliant.  It is often useful for charities to get a professional, outside perspective on their structure and business activities as this helps to identify issues that they might have missed or not thought of.  There is no doubt that this has been a very difficult year for many charities, but it is important now to look ahead to the future and how they will continue to operate for the years to come.”

Marianne Webb can be contacted at m.webb@gullands.com