We continue our look at the top tips for good governance as provided by Dorothy Dalton, editor of Civil Society’s Governance magazine.
So far, we have looked at the first 3 tips:
“Understand the role, responsibilities and liabilities of board members and understand what governance is all about”
“Work hard to get the relationship between Trustee and Executive (staff) right i.e. partnership built on mutual respect, trust and confidence”
“Work hard to get the Board to stick to their governance role by careful planning and high quality Board papers”
Our next tip is:
“Get the tone at the top right”
The organisation will have certain values that they have chosen to be the values of the organisation. They must be seen in the way that those at the top of the organisation behave. The people at the top will be followed by those lower down the organisation – if the tone at the top is not right, then you cannot expect others to be concerned at adhering to those values.
“Understand the finances and get the money right, especially in such economically difficult times”
Many Board members knew that their organisation would fail 50 months before it happened but would do nothing to prevent it. 47% of UK Board members never discussed issues deemed “too sensitive”. 70% of Board members did not know how to raise difficult issues. All shocking statistics!
We are in a challenging financial climate – and likely to be for at least another 5 years. Charities are being faced with varying issues – reducing income, pension fund deficits, increasing legal demands (e.g. pension auto-enrolment), insufficient understanding of finance etc. There are also varying actions that we can take – reduce costs by cuts, reduce costs by sharing resources, work differently, partnerships, takeover/merger, commercial ventures.
As Board members you must have those difficult conversations. You must discuss the financial situation in detail – what are the problems? Is income keeping up? Do we need to reduce costs? Where? Shall we look to work together with another organisation? Should we close? Have the discussions, make decisions, monitor and take regular action.
“Recognise that change isn’t easy”
Whilst change is now a way of life, people still find change difficult – and the bigger the change, the more difficult to adapt. There will be bumps on the road. The change management cycle recognises that things will get worse before they get better.
We must prepare for change – and prepare our people for change. We must choose the change that we will make carefully and plan it well to take our people, and our organisation, with us.
So that brings us up to 6 top tips from Dorothy – the last 2 will be in the next blog!