Motorway Madness: when charity governance goes wrong

If you listen to some accounts of trusteeship and governance in the charity sector, you’d be forgiven for thinking that the most important thing is adherence to the law.

Imagine if you will that a charity is like a family driving in their car, perhaps off on holiday or a day trip. And imagine the parents are the trustee board – the ultimate decision-makers on this journey (as well, in this case, the implementers of those decisions).

The legal approach to trusteeship and governance sees the main responsibility of the parents, especially the driver of the car, as being avoiding breaking the law.  If the driver stays within the speed limits, stops at traffic lights, and goes the right way around roundabouts, we should be all right. Essentially the main task is to drive legally.

But if this was our only focus, the end result would be motorway madness. We’d be circling round and round the M25, travelling legally but ultimately getting nowhere. And we’d be wasting time and resources.

Most charity governance experts don’t just exhort charities to keep going nowhere as long as they obey the law.  They stress that charities should stay focused on their objects.  The trouble is, the objects for most charities are so broad that they simply set the parameters of what it can and can’t do in principle – they don’t allow for a focus on what the charity should do.

The primary purpose of the car, it’s object if you like, is to transport people – but that doesn’t tell us where we should actually be going on a particular trip.  The parents have to decide where, of all the possibilities, they are actually heading on their day trip or holiday.

So as well as sticking to the law, the parents need to think about the destination, the strategy. Out of the total possibilities covered by the objects, the strategy determines which specific areas of impact are to be achieved by the charity over the next stage of the journey, for instance the next four year strategy period.

The parents also need to keep their children happy for the journey – whether that’s a book, some music or a long and increasingly random game of eye-spy. They need to check how they’re doing – navigate, check the milestones (literally), and make any corrections by taking a different route or speeding up or slowing down.  They need to refuel, both the car and the family themselves to ensure they have enough to get them to the destination.  They need to consider and react to risks to their safety. Arguably they should also think about how they are treating other road users. And if there are consistently too many cars going the same way as them, creating jams, they may even need to consider whether the car is the best form of transport. Should they give up their car and join up with other families on a coach cruising faster in the bus lane?

So trustees have loads to think about:

• Setting a clear needs-led, impact-focused strategy as the destination for the current trip
• Planning the journey, at a high level
• Ensuring beneficiaries, users, staff, volunteers and themselves enjoying the journey as well as reaching the destination itself (see Full Value)
• Reviewing progress and ensuring corrections are made when needed
• Checking there are enough resources
• Spotting and dealing with risks
• Acting as good corporate citizens
• Actively considering mergers and collaborations –other better vehicles to reaching the destination
• And yes, definitely, keeping to the law and working within their objects

Come along to our Trustee Conference to debate this and more.