Trustees’ Week 2020

This year’s Trustees’ Week runs from 2-6 November 2020.

Each year, Trustees’ Week highlights the work that trustees do for their charities; and shares and promotes the role that trustees play. If you are thinking of becoming a trustee, find our more here.

Read more here: http://trusteesweek.org/

Follow on Twitter here: https://twitter.com/trusteesweek

Chiene + Tait publishes lots of guidance for Trustees – see some below, and watch out for more posts throughout the week.

See also The Informed Trustee: an online course for current and prospective trustees to help promote best-practice and equip people with the skills it takes to govern a charity. Euan Morrison, our Head of Charities, contributed to the course.

 

How to Find Financial Expertise for Your Charity

Most people on charity boards would agree that it is useful to have someone with financial expertise also on the board, so that they can deal with the ‘finance stuff’. However, charities often struggle to recruit people with any financial know-how and charities can survive without this skill set, so does it really matter? In short, yes –  but let me explain why.

It saves money

Charities operate in a highly regulated environment, with very complex tax and accounting rules; having someone on the board who can help you navigate these will help avoid any accidental non-compliance, or unforeseen tax charges, which can save a lot of money.

Individuals with financial expertise will also be well placed to assist with the development of strategic aims of the charity, especially in relation to resources, as well as ensuring the effectiveness and robustness of the charity’s internal policies and procedures. Smaller charities in particular would benefit from this expertise as, often, they are too small to support a discrete finance function within the organisation.

In these smaller organisations the day-to-day bookkeeping is often be undertaken by an office administrator with little to no finance knowledge or training. In these circumstances, it would be especially important to plug this knowledge gap through financial expertise on the board. Ultimately the board is responsible for the charity’s finances, and it will always benefit the charity if there is someone on the board who will be able to identify potential financial risks, and ways of mitigating these risks.

Add financial expertise to your board

So, how do you find financial expertise for your charity board? A good place to start is to increase the financial literacy of the current board. Now, I don’t mean the board needs to start taking accountancy exams and become financial experts, but there are lots of excellent training sessions run throughout the year run by professional organisations: and most of these training sessions are free.

I would encourage all board members to learn more about finance matters generally. Not only will it increase the financial expertise of the board, but it will also ensure that board members are more able (and confident) to understand, scrutinise and question the charity financials, which makes for better governance and better decision making.

How to find an expert

If you want someone who is professionally qualified on your board, there are a number of options. You can ask your contacts and see if they know anyone. Professional accountancy bodies such as ICAS will have web pages dedicated for their members to find volunteering opportunities with charities, and it may be worthwhile contacting these organisations to get your job advert posted. And don’t forget your own accountants or independent examiners. They will be able to provide advice on charity matters, and they will also be able to use their networks to recommend someone outside your usual channels.

What research should you do before saying yes to a charity trustee role?

Following a report recently published in Third Force News highlighting that a survey of almost 700 smaller organisations has revealed that only 47% are confident that they will be financially sustainable in in 2023, it’s never been a more important time to recruit good charity trustees.

However, before you take the leap into trustee-dom, what research should you do to make sure you are in the best position to accept a role? There are a number of practical steps you can take to ensure you enter into a trustee role with your eyes wide open, these include:

  • Supportive structure – Does the charity offer trustee training or on boarding/ mentoring? Can you see previous minutes of meetings to get a feeling about the charity/ style of board meetings/ if opposing views and thoughts are welcome. Some charities arrange for prospective trustees to sit in on meetings as observers before taking the plunge. This would assist you to make the most of your time as a trustee of the charity.
  • Personality mix – What are the other trustees like? How long have they sat on the board? What are the relationships like between the trustees? Are there any tensions or disagreements you should be aware of? How well do the trustees work with the Chief Executive and senior management team? This will allow you to assess what a role within the board will be able to deliver.
  • Regulatory compliance – Is the charity up to date with its OSCR filings? This will indicate if there are any financial or other issues the charity is currently having. Are they on top of other, relevant requirements e.g. the Care Inspectorate? What is the strategic plan for the organisation? You can also see if the charity is in good financial health and has a plan to continue operating successfully.
  • Expectation management – Does the charity expect you to attend board meetings only or do they also want you to attend fundraising events/ introduce donors/ commit to fundraising on behalf of the charity? Knowing in advance what you are required to do will manage your and others expectations, and no two charities operate in exactly the same way.
  • Trustee structure – Does the charity have any sub-committees that would be good to get involved with e.g. fundraising, financial or HR? These specialist areas will help you to provide practical input and support using your own experience.
  • View from the street – Check out the charity online. Are there any news articles or stories that include the charity or information on its activities that you want to read about before committing to a position?
  • Think of the practicalities – From a practical point of view, how often do the trustees meet? When, where, timings etc. Check if this suits your lifestyle and current commitments before you agree to join.

Don’t forget that trustees are ultimately responsible for the charity and therefore you would take equal share in this responsibility. You must act in the interests of the charity, including ensuring it works to achieve its purposes; in addition, you must look after the charity’s affairs as carefully as you would someone else’s and any conflicts of interest should be carefully managed. The Charity Commission in England and Wales has recently created a new welcome pack for charity trustees that focuses on the main duties of the role (further information https://www.gov.uk/government/publications/charity-trustee-welcome-pack).

It provides essential information to help you understand governance basics, financial filing requirements and how the Charity Commission can offer support. It also suggests practical steps that can be taken to carry out trustee duties effectively. All new trustees who register their email address with Charity Commission will receive a copy.

“As a trustee, you will be able to use your skills and experience and have a direct influence over a cause you care about. It is a rewarding role, but there are responsibilities meaning you will need to give up enough time to help your charity succeed. You should use your first six months to really get to understand your role and responsibilities. We have prepared this short guide to help you do that. It tells you what to expect in your first year and where you can get more detailed advice.

Charities have a special place in our society because they are committed to helping others. This creates a level of trust from the public that we must protect. You will need to help run an effective charity that shows how it operates for the good of others, while we will provide guidance and services to support you in that.”

Helen Stephenson – Chief Executive – Charity Commission

 

Who’d be a charity trustee?

Rory Kennedy, our Rural Estates Partner, has been a charity trustee for three different charities therefore has a wealth of charity experience, and has worked with plenty more. Here he offers his thoughts on the benefits – and drawbacks – of being a trustee.

I’ve had various roles (including trustee, chair, vice chair, and member of audit committee) of three different not-for-profit organisations over the past decade. I’ve also worked with plenty more in my professional capacity, from small local charities through to big national organisations. Each of these has given me a good insight into the benefits and drawbacks of being a trustee.

 

The pros of being a charity trustee

Personal development: Charitable work is very rewarding, and you’ll find that you have far more influence on strategy than in your day job. This can develop skills and experience that cross-pollinates and will help you develop in your career role (treasury, marketing, HR, legal issues etc). If you perform well on boards you are also likely to be working with high achievers who have influence and can be great people to learn from.

Motivation: Helping an organisation is personally fulfilling, and there are plenty of charities that need and value help. Change can be extremely painful, incremental and involves a lot of committee work and politicking to get anywhere, so I think it helps to have an emotional tie or clear career goal out of the trusteeship. Without this motivation you might run out of steam, and you could be taking up a board slot for someone else who might be better able to roll up their sleeves and get things done.

Board experience: Trusteeship offers great experience and a boost to your CV. The experience is wide-ranging and involves senior-level responsibility, so definitely offers good skills and learning that will challenge your skillsets. Voluntary positions can be good preparation for senior roles and other Board positions which may need leadership experience.

 

The cons – or what to look out for

Emotions: In the professional sphere, it’s very easy to understand people’s motivations – career advancement and paying the mortgage! It makes dealing with colleagues and staff fairly transparent. In the not-for-profit world, there are far more complex motivations at play – people can be passionate, but this passion can bring complications that are often negative or irrational (ego, control, etc). This can also apply to charity staff who are in this sector because they care, and it motivates them; charities rely heavily on staff goodwill. Any new trustee should keep in mind that charity professionals are often highly skilled in their field. Dealing with people requires a balance of emotional intelligence and professional scepticism.

Time: Being a trustee can be very time-consuming and decision-making can be slower than the private sector, requiring a consensual committee approach. The more dynamic businessperson or professional may find this frustrating and something of a cultural clash. Some of my roles have been the equivalent of a day a week, which is a lot on top of a demanding professional role.

Risk: Particularly relevant for me as a Chartered Accountant. A lot of charities aren’t best-practice in financial operations and seek a CA for the Board to guide. Beware of what you are getting involved with and do your due diligence before being flattered into the role. Being a named trustee of a failed charity can harm your professional reputation.

 

In summary

Trusteeship can be challenging, but if you do a good job of it then it’s very rewarding both personally and professionally. You’re there to help and that should be mutual: you’ll get out as much as you put in. Just be careful, don’t freeload, and make sure you pick the right charity for you.

Euan Morrison in Third Force News: Charities encouraged to consider greater board diversity

Chiene + Tait’s Head of Charities, Euan Morrison, appears in Third Force News advising charities to consider having a greater diversity on their board of trustees, ‘Third sector organisations need to adopt new ways of thinking if they are serious about addressing this imbalance. More young people might be attracted to a trustee role if meetings were held at weekends and not during the week, for example. With 18-24s often keen to build their CVs, marketing a trustee role as an alternative way of volunteering could also prove attractive. I’m not suggesting that currently there is an intended desire amongst trustees to deter youth and diversity, but there is a feeling that they are, quite unsurprisingly, inclined to look within their own peer groups when recruiting new people to their boards. Charities must, however, look at ways to overcome this situation or they will risk losing relevance to the people they are in post to support. Diversity across a board of trustees is an important part of good governance where people from a variety of backgrounds and ages are usually better placed to make well-rounded decisions.’

To read the article in full click here.