A board member at Tesco faces a different set of circumstances requiring a different set of decisions to be made than their Asda counterpart, despite both companies being grocery and general merchandise retailers. The two have a slightly different customer base, differing resource constraints and profitability. Similarly charities have different beneficiaries, funders and mission statements. Therefore, it is essential for the charity trustee to have an in-depth understanding of their organisation that will include an appreciation of where funding comes from and how it is spent. As a result, a trustee must be prepared to invest sufficient time in understanding the charity to provide a platform for making effective decision-making.
Charity governance 2020 is about trustees having an in-depth understanding of the charity to be able to 'provide sufficient oversight but not management interference'.
Good governance indicators
- A financially sustainable strategy that reconciles to the charity’s mission statement.
- A charity that provides sufficient information to prospective trustees and on induction.
- An annual financial budget that is approved in advance of the financial year commencing.
- An annual financial budget that reconciles to the targets in the charity’s reserves policy.
- Consideration as to whether and how beneficiaries or users could be represented within a charity’s governance structure.
- Monitoring the attendance of trustee at meeting and their contribution each year.