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What a way to run a railroad! Governance in the Third Sector

What a way to run a railroad!  Governance in the Third Sector

by Dr Roger Courtney, Courtney Consulting

Governance in the third sector is a most peculiar beast. The people with complete legal and financial responsibility for the organisation are a group of part-time volunteers, while the people who do the work of the organisation are usually experienced full-time professionals.

Making this relationship work effectively is a major challenge in the sector. Far too often, the quality of governance is poor. New trustees often receive little in the way of induction and there is frequently little in the way of descriptions of the role of the board, or the role of individual board members, let alone that of office-bearers and sub-committees.

Too often trustees stay far too long and fail to bring in new trustees with the governance skills and links to other sectors, the organisation needs.

The level of external compliance required by third sector organisations is now very substantial, whether it concerns charity or company law, health & safety, GDPR, employment law, avoiding insolvency, or the quality of services. Nor is going for minimum legal compliance good enough anymore. Boards are expected to be aiming for ‘excellence’, for ‘continuous improvement’. Its far cry from the amateur approach to governance of twenty years ago.

As well as these challenges, there are also positive developments. The Charity Commission, despite being under-resourced, has played an important role in providing a framework for ensuring that charities actually operate charitably, and for concerns to be effectively investigated and addressed. The Governance Code has also helped provide a better understanding of what governance is.

The CO3 Guide to Great Governance now provides more detailed guidance for those tasked with the governance of third sector organisations and chief officers who support them, including: getting the internal governance function right; complying with charity and company law; setting and monitoring strategic direction; ensuring the quality of services; finance; fundraising; being a good employer; managing the chief officer; the ambassadorial function; communications and data protection.

Hopefully, governance is now just a little less daunting!

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