The Charity Governance Code and the world of small charities
Good Governance requires more than an ability to follow the rules, it requires the will and resources to invest in your organisation. For many small charities that is a luxury they can ill afford. Instead many ignore the governing document seeing it as cumbersome backdrop to their day to day delivery of services to beneficiaries.
Interestingly at least 1 in 4 queries to the Small Charities Coalition free helpdesk is from trustees and founders concerned about how they should interpret and implement good governance. Yet such questions are not framed as being about Governance. Just a sample of recent questions to the helpdesk illustrates the point:
1. What do I need to consider if I am opening a branch overseas?
2. Can we remove provisions for proxy voting?
3. One of our trustees is being very troublesome, is there anything we can do?
The route to addressing each of these very often starts with the organisation’s governing document. Too often small charities look at the Governing Document as something to get them through the registration process and a requirement from funders, very few actually sit down and read it, can tell you what their quorum for meetings is, or even the type of governing document they have adopted.
There is a small version of the Code for charities with less than 1 million pounds a year income and last year NCVO published a tool to support micro charities, with no staff in using the code.
For small charities there is considerable merit in using the Charity Governance Code’s diagnostic tool as an aid to becoming better acquainted with your Governing document. The code allows trustees and staff to create opportunities and lead discussions about a broad aspect of the organisation’s work — organisational purpose, leadership, integrity, decision making and risk management, board effectiveness, diversity and accountability. Taken together or one by one, each section is really helpful in assisting Board norming, forming and storming.
Yet so many small charities don’t engage, the current charity Governance code consultation has seen an absence of responses from small charities. Why?
There could be several reasons, some are very obvious, a lack of time, competing priorities, a lack of people to lead discussions. There are several other not so obvious reasons. Governance has become an extremely professionalised aspect of running a charity, the perception is that you need to either be a legal professional or full time governance specialist to be able to action good governance. There is also a distinct lack of understanding of the relevance of Governing documents post registration. We see it especially with Sports clubs. Many have very clearly written rules for the clubs that all those involved with an organisation could recite blindfolded. Yet the same groups panic when it comes to developing or understanding their governing document — what else is governance if not a set of rules and ideas by which to develop your organisation by!
The Charity Governance Code is currently out to consultation, we would encourage all small charities to take a look and contribute to the debate about the future of the code. The consultation runs until the 28th February 2020
