Time For Trustees To Reflect?
The period of initial shock and emergency change caused by the Pandemic has ended, and now is a good time for trustees to draw breath and reflect on how their charity has coped and how the trustees are going to be able to move the charity forward.
The Charity Commission has itself been looking at the data that it has of activity over the last six months, and reflecting on what lessons can be drawn from that data. This data has shown the following as the key problems that the Commission sees trustees as demonstrating:
- Not knowing their governing document.
- Not following decision making principles
- Not ensuring that controls and procedures works.
- Not filing accounts and annual reports on time
- Not challenging conflicts of interests
- Not challenging dominance.
- Not understanding the finance
- Not asking difficult questions
The Charity Commission has six top tips for action:
- Fit for purpose: Charitable objects- what are they? How far apart are they from the charity’s current activities?
- Modernisation: check the governing document generally – does it need a refresh, e.g. on powers or how to hold AGMs – think about what you will need in the next year or two and do you need consent from the Commission. Try not to go to the Commission last minute. What about policies and procedures generally?
- Risk management: has a clear risk appetite/strategy been set?
- Financial management: what are your short, medium, and long term aspirations of the charity? What do you need to think about in terms of cash flow, investments, insurance, debtors and creditors to/from the charity?
- Record decisions: Whatever you do, the more difficult your decision, the more reason there is to ensure it is carefully and clearly recorded.
- Review: regularly!
The short term changes to legislation such as to the Companies (Insolvency and Governance) Act 2020 and the Charity Commission’s extension of deadlines and flexibility where governing documents are not fit for purpose will not last forever. It is vital for trustees to undertake the reviews recommended by the Charity Commission to ensure that their governing documents are fit for purpose moving forward and allow modern and flexible ways of meeting and working.
If you have any concerns or questions on these issues, our top ranked charity team will be more than happy to assist you and guide you through the changes needed to allow your charity to thrive into the future – whatever that holds.