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Good governance encompasses effective and ethical management and administration of your charity. It includes a range of issues including: transparent decision-making, accountability, responsible use of resources, adherence to your charitable objects, and compliance with relevant Charity Law.As a trustee you have overall responsibility for making sure your charity is heading in the right direction, achieving the goals it sets itself, writing and implementing policies to ensure efficiency, operating within the law and in a responsible manner,
• Conflicts of interest• Late or inaccurate filing• Trustee receiving unauthorised benefits• Poor financial controls• Fundraising abuse• Failure to comply with Commission orders and action plans
Risk management involves identifying and mitigating potential risks that could affect the charity's operations or reputation. This includes financial risks, reputational risks, operational risks, and safeguarding risks. Effective risk management ensures the charity's sustainability and protects its beneficiaries.
The frequency should be determined by the charity's size, activities, and governing document, but regular meetings are essential. For many charities, quarterly meetings are a minimum, but more frequent meetings may be required for larger or more complex organizations, or during times of crisis. These meetings should be well documented with minutes.
Trustees must ensure partnerships align with the charity's purposes and conduct due diligence on potential partners. This includes assessing the partner's financial stability, reputation, and compatibility with the charity's values. A formal partnership agreement should be created to define the terms of the agreement.
Charities must comply with data protection laws when collecting, storing, and using personal data. This includes obtaining consent for data processing, ensuring data security, and respecting individuals' rights regarding their data. Non-compliance can result in significant fines and reputational damage.
Trading activities must be in furtherance of the charity’s aims, and may be subject to tax. If the trading activity is not directly related to the charity's purposes, it may be subject to corporation tax. Charities should seek professional advice to ensure compliance with tax regulations.
Charities must comply with employment law regarding contracts, wages, and working conditions. This includes providing fair and equal treatment to employees, complying with health and safety regulations, and ensuring that all employment practices are legally sound. Charities should have up to date employment contracts and policies.
Charities must follow legal procedures when managing legacies and bequests. This includes ensuring that the testator's wishes are followed, complying with probate regulations, and maintaining accurate records. Charities should have a policy regarding legacy administration.
Charities must remain politically neutral, but can campaign on issues that directly relate to their charitable purpose. This includes avoiding partisan political activity, but advocating for policy changes that support the charity's mission. Charities should have clear policies about campaigning activity.
A governing document is a legally binding document which sets out what the charity is for, (its charitable purposes/objects) what the charity is, and isn’t allowed to do (its powers) and how the charity is to be run. Charity law is quite specific – a charity can only do things which are:(a) consistent with its charitable purposes; (b) within it power to do; and (c) are for the Public Benefit. And the primary responsibility of the Trustees is to ensure that their charity adheres to that.
• Safeguarding incidents • Financial crimes such as fraud, theft, and money laundering; • Large donations from an unknown source • Significant financial loss or damage to charity assets; • Links to terrorism or extremism• Negative publicity which has an adverse effect on the charity’s reputation
By conducting regular risk assessments, reviewing policies and procedures, and seeking professional advice when necessary. Risk assessments should consider both internal and external factors, and should be documented. Regular reviews ensure that risk management remains effective and responsive to changing circumstances.e.
Governance sets the strategic direction, while management handles day-to-day operations. Trustees focus on governance. Governance involves oversight, accountability, and ensuring the charity's mission is achieved, while management focuses on implementing the strategies and operational plans set by the board.
By establishing a clear complaints procedure and ensuring complaints are handled fairly and promptly. This procedure should be communicated to all stakeholders, and should provide for impartial investigation and resolution. Prompt and fair complaint handling improves trust and promotes a transparent organisation.
Fundraising must be legal, ethical, and comply with relevant codes of practice. This includes ensuring transparency about how donations will be used, avoiding misleading or aggressive fundraising tactics, and complying with fundraising regulations. Charities should also be aware of the fundraising regulators codes of practice.
When dealing with complex legal or financial matters, or when facing significant risks. This includes issues related to contracts, property, employment law, and major financial transactions. Seeking professional advice can help prevent costly mistakes and ensure compliance.
Trustees must follow ethical investment principles and act prudently when investing charity funds. This includes diversifying investments to minimize risk, considering the charity's ethical values, and seeking professional investment advice. The boards investment policy should be reviewed regularly.
Charities must comply with advertising and fundraising regulations when using online platforms. This includes ensuring that online fundraising appeals are transparent and accurate, complying with advertising standards, and respecting privacy regulations. Charities should have social media policies in place.
Charities must follow specific legal procedures when closing, including distributing assets and submitting final accounts. This includes notifying the relevant regulatory body, paying off outstanding debts, and ensuring that any remaining assets are distributed in accordance with the charity's governing document. Charities should seek legal advice when going through this process.
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