Charity governance is still a hot topic in the third sector, with failings of trustees, founders and key employees regularly making the news.
The consequences of fraud and theft are often financial devastation for the charity itself, as well as betrayal of public confidence; both effects that can take years of hard work to reverse and for some, lead to the organisation’s demise.
Updated Charity Governance Code
Good governance – which boils down to robust systems and processes – is critical to a charities ability to achieve its objectives, be accountable, earn trust, mitigate risk and, ultimately, be successful in the long-term.
The Charity Governance Code, whilst not a regulatory requirement, sets the principles and recommendations for best practice when it comes to governing.
Last year, following a period of consultation, the Code steering group updated the two of the seven principles; specifically, by researching and refining the ‘Integrity’ principle and the ‘Equality, diversity and inclusion’ principle.
The responsibility to respect this Code and to govern effectively lies firmly with the board of trustees. However, there are other parties upon whom trustees rely to ensure that this is possible.
As chartered accountants and advisers to charities, we are one such party. We can help trustees to understand and fulfil their legal and moral duties, and to influence the way an organisation is being run.
Risk mitigation and objective advisory input
Sound governance continues to be crucial in the sector.
Where these robust practices don’t exist organisations are leaving themselves vulnerable to both financial and reputational damage.
While adhering to the principles of the Code does not guarantee that there will not be challenges along the way, it is an invaluable tool for those tasked with running a charitable organisation.
In order to be qualified to audit or independently examine charity accounts, we carry out regular training and professional development. We also have a natural desire for order and risk mitigation. We will be witnessing governance in action, so are in a good position to identify potential weaknesses and advise objectively.
As the Code is updated and refined, trustees, founders and directors should familiarise themselves with the changes. Often, changes can turn up new and important considerations; considerations that reflect the evolution of wider society.
Good governance should aid compliance with legislation and regulation, first and foremost. That being said, it can also serve to promote a culture where fulfilment of the organisation’s vision is a priority.
How can George Hay help?
We know that managing a charity or social enterprise in the current economic climate can be challenging. That is why we have a specialist team on hand to support the not-for-profit sector; providing audit, independent examination reports, accounting, taxation and advisory services to charities, academies, clubs and social enterprises of all sizes.
Whether you need help with appraising governance procedures, setting accounting policies or tax planning, or you need advice about diversification of income streams, we are here for you.
To speak to one of our experts about how we can help, contact us today by calling 01480 426500.
