Effective leadership and governance

As this week is Trustees’ Week (12-16 November), I felt it perfect timing to highlight again two maxims to keep in mind when considering taking on the charity trustee role or, indeed, are an existing trustee. Yes, you may need to be a bit more hands on if your charity is smaller but, in general, I’ve always found these maxims helpful, no matter the size of the charity.

1. Govern, don’t manage
Effective trustees find the right balance between constructively challenging and providing support to the executive leadership team. They’re clear about the culture and values of their charity and ensure that these fully align with the charity’s strategy – asking for regular updates from the leadership team and holding them to account. Culture and strategy are closely aligned and you cannot do either in isolation – culture is the key to the success of the charity and will always prevail over strategy. The Financial Reporting Council’s report ‘Corporate Culture and the Role of Boards  Report of Observations’ is well worth a read on this topic – it provides an interesting overview from the commercial world.

Effective trustees also oversee the stewardship of their charity – they probe and monitor compliance with the established policy framework and ask balanced questions about the internal and external risk landscape and how these affect the charity’s underlying business model and operations.  They have oversight over stakeholder communications and clearly understand that the responsibility of the trustees’ annual report in the financial statements lies collectively with them, so despite who creates the first draft, they ensure they input and sign it off.

Further, the needs of their beneficiaries are kept at the centre of everything they do – constantly assessing the impact the charity is having in meeting these needs.

Most importantly, the most effective trustees don’t get involved in the day to day management, understanding the fine balance between governing and managing.

2. Delegate, don’t abdicate
Effective trustees also understand their collective roles and responsibilities as a board. They‘re aware of the need for delegation to the executive leadership team, but they don’t abdicate responsibility when they do so – they’re aware that the ultimate responsibility rests with them. They ensure a framework is in place for the executive leadership team to report back to the board, whether that be directly or through a sub-committee (for example, the audit or finance committee).

They also don’t abdicate responsibility within the trustee board itself. For example, even if a particular board member has more legal, accounting or fundraising skills than others owing to their current day job or previous experience, all trustees must take collective responsibility for the decisions made. Effective trustees recognise that responsibility doesn’t rest with one individual, nor does it stop with the chair or the treasurer, and don’t rely purely on their say. If they don’t understand something fully, they’ll keep asking questions until they do.

Become a trustee
I hope this overview is helpful to those thinking about becoming a charity trustee or sitting on a charity sub-committee, and acts as a refresher for those already doing so. As an audit committee member myself, and with years of experience working with trustees, I know it’s well worth the time and commitment – yes, challenging at times maybe, but always rewarding. If you’d like to understand more about becoming a trustee or want training or advisory support, get in touch or contact your usual Moore Stephens adviser.

Emerging issues seminar
Want to keep updated with the emerging issues in your sector? On 29 November, we’ll be highlighting the governance, tax and accounting matters that you’ll want to have on your radar for next year at our latest seminar aimed at charity trustees and leadership teams, as well as those responsible for finance. For more information and to register for your free place, click here.
 

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