#TRUSTEECONF2014

PM4: What every new trustee should know

Lindsay Driscoll, OnBoardMyles Kunzli, NCVO

What every new trustee should knowby

Lindsay Driscoll – Consultant, Onboard

Trustee Conference 10th November 2014

Governance is…

• The systems and processes concerned with the:– overall direction;

– effectiveness;

– supervision; and

– accountability,

of an organisation.

Trustees’ Responsibilities

• Trustees must accept ultimate responsibility for everything the charity does.

• Duty to act and take decisions collectively:– Responsibility and authority rests with the Board

as a whole.

• All trustees have same legal responsibilities.

• Delegation to others does not absolve trustee of responsibility.

Trustees’ Responsibilities (Cont/1)

• Advance the purposes of the charity for the public benefit.

• Act reasonably and prudently.– duty of care and skill linked to special knowledge

and experience of individual trustee.

• Safeguard assets includes reputation.

Trustees’ Responsibilities (Cont/2)

• Act solely in best interest of charity.

• Avoid or manage conflicts of interest and loyalty.

• Must not receive any benefit from charity in absence of legal authority.

• Exercise independent judgement.

• Comply with constitution, relevant laws and regulators.

Twelve Main Roles of the Board

• Set and maintain vision, mission and values.• Develop strategy.• Monitor performance and impact.• Establish and monitor policies.• Risk management.• Ensure compliance with the governing

document, law and regulation

Twelve Main Roles of the Board (Cont/1)

• Ensure accountability.

• Maintain proper financial oversight.

• Select, support and appraise the chief executive.

• To set the remuneration levels for senior staff.

Twelve Main Roles of the Board (Cont/2)

• Maintain effective Board performance:– recruitment of trustees;

– induction; and

– review of performance.

• Promote the organisation.

Role of Individual Board Members

• Job description / letter of appointment setting out expectations:– time commitment;

– prepare for meetings;

– contribute to decision-making;

– use skills and experience; and

– adhere to Code of Conduct.

Role of Chair

• No greater legal responsibility.• Powers may be delegated to Chair by Board

or in governing document.• 2 key roles:

– provide leadership to Board. Ensure trustees fulfil their duties and responsibilities. Set tone; and

– focal point between Board and management. Support and, where appropriate, challenge the CE and ensure Board as a whole works in partnership with the Executive Team.

Code of Good Governance

• First Edition of Code 2005

• Revised 2010.

• Version for small organisations 2011

• Six high level principles of universal application plus relevant law, why important and examples of good practice

• Website www.governancecode.org

Principles

• An effective board will provide good governance and leadership by– understanding their role– ensuring delivery of organisational purpose– working effectively both as individuals and as

a team– exercising effective control– behaving with integrity; and– being open and accountable

Relationship between Governance and Management

• Strategic/operational.

• Not always clear cut. Fluid .

• Hind “Can set framework for who should make decisions but in practice trustees and senior management have to exercise judgement jointly on big issues as they arise”.

• Dalton: Team at the Top.

Holding Senior Management to Account

• Code “Avoid inappropriate involvement in operational matters but take responsibility for challenging and holding to account senior management”.

• Balance between support and challenge• Constructive challenge. Critical friend.• Importance of mutual trust. Culture of no

surprises.

How to be an Effective Board

• Code of Governance for the Voluntary and Community Sector 2010.

• ACEVO Governance Commission Report 2013:– Limit on terms of office.

• Charity Commission Guidance.

How to be an Effective Board (Cont/1)

• Compass/Cass report 2012.

• Structures/procedures/meetings/behaviours Key Drivers:– good team working:

• size of Board;

• need for diversity but cohesion;

• all feel equally valued.

• equal responsibility; and

• danger of inner group.

Key Drivers for an Effective Board

• High Quality Board meetings:– setting agendas to concentrate on governance

role;– good minutes and table of action points;– papers which draw out governance issues;– boardroom behaviours:

• listening;• respecting views• review at end of meeting; and

– code of conduct or ground rules for meetings.

Key Drivers for an Effective Board (Cont/1)

• Having the right skills and experience.

• Being a diverse group:– role in risk management.

– avoid group think.

• Focus on strategic rather than operational matters.

• Having openness and trust. Within Board and between Board and Executive Team.

Other Drivers

• Good relationship between the chair and chief executive.

• Quality of information provided to the Board.

• Effectiveness of committees.

• Formal performance reviews of governance.

Onboard Governance Development

2-6 Cannon Street

London EC4M 6YH

Tel: 020 7551 7724

Fax: 020 7551 7800

Email: info@on-board.org

Web: www.on-board.org

Contact

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