Dangerous assumptions

It’s often the smallest things that can come back to haunt you. Do you have an induction pack for trustees and managers? They often lack a vital component: The Procedures Manual. This is a full digest of all procedures, duties, compliance requirements, checks and balances that your organisation has in place to ensure that it is being managed legally, efficiently and effectively. It should state who does what and when, and be shared with not just the board, but with management as well. Trustees often labour with an issue that need never have arisen if only they had taken the trouble to satisfy themselves that their organisation had preventative checks and balances in place.
I’m not advocating scrutinising every line of a health and safety audit, or your theatre or alcohol licence every year, but the document needs to ensure that everybody knows who has to do what and when to maintain effective management practice. Trustees and organisations are at risk if they don’t ensure that there are proper systems in place and those responsible can produce evidence when required. Do you have a policy for the signing of cheques that requires at least one signature to be that of a trustee? You probably do. However, there are instances where trustees are convinced that this safeguard exists, but it doesn’t. This allows management to sign cheques themselves when it proves difficult to find a trustee signatory at short notice. As long as managers are honest and prudently managing the money, this is fine. But, if abuse is allowed to occur then, if malpractice is eventually uncovered, hours and hours are wasted in explanations to funders, disciplinary proceedings, resignations, recruitment and worse. And all because trustees assumed, but failed to ensure a simple, vital system was in place.
Serious questions
If your organisation owns or leases a building, do you have it surveyed every five years or so? How long does it take to raise funds for a major capital project? Five to ten years? You need to know how much you need in time to raise it, or at least have plenty of time to adapt programmes to embrace potential periods of closure. Do you have an annual agenda item when Trustees are presented with health and safety and the other compliance documents that have to be completed annually? You really should. If there’s an accident and it transpires that no Health and Safety audit or Portable Appliance Test (PAT) has been carried out which might have identified the risk, then trustees could be held personally liable. Ignorance is no defence in company law.
Of course, good management practice is not just about legal compliance and protecting your back. It’s about making sure your organisation is run with as little time as possible invested in correcting errors and oversights, thereby maximising the time available to spend on the productive agenda items. Ensure that everybody is clear about policies such as who speaks to the media (and who doesn’t!), and that you have measures for monitoring the effectiveness of your operations. Agreement on such issues means that trustees spend less time chasing managers for irrelevant information. Go back through your diary, a year’s worth of board minutes or emails, and note just how much time you and your colleagues have spent dealing with a negative issue. Then consider what it might have been useful to have had in place or known that would have stopped the problem from occurring. Imagine what else you could have done with that time instead. Be prepared to be amazed.
 

Tick the boxes
I have developed a checklist designed to discover what systems are in place and, as importantly, who knows about them, which is available to download from the AP website.
The checklist covers: governance, board organisation, policy, effectiveness, property, financial control, accounts, fundraising, trustee interests, legal and compliance. It is designed to help trustees fulfil their responsibilities in ensuring that an organisation is being legally and effectively managed, without having them breathing down the management’s collective necks all the time. Give a copy to each trustee and/or manager. Ask respondents to tick one box in response to each question. Respondents must do this individually to give an honest response. Then collate the results. It’s good to mark management and trustee papers separately to see where differences in understanding lie. These might relate to issues that have caused past tension between board and management. Having highlighted differences in understanding, it’s a simple matter to resolve them. See where there are gaps which need to be addressed, by ensuring a simple system is in place, e.g. an organisation chart specifying lines of reporting.
Some questions will trigger debate. If your answer to any of them is “no”, it may be that the question is irrelevant, or that you can agree what to do. If the knowledge required is beyond the internal ability of the organisation to answer, you may need to seek professional advice. Trustees who act responsibly in the interests of the charity will generally escape censure. But those unable to demonstrate that they have done something to prevent an identified risk from occurring or a compliance task from being overlooked could make themselves personally liable to make good any resulting loss to the charity. Some answers are subjective and likely to generate some interesting and useful debate. This list is still evolving, and suggested additions will be most welcome. So head for the AP website and download the checklist, to discover how to make your working life less precarious.