Feedback from Irish Farmers Journal readers suggests that one of the main tensions on a board is managing the burden of being compliant (with legal and regulatory requirements) v being effective.
This article looks at the supports that boards of charities can avail of and steps to take to ensure that your board’s processes are fit for purpose and that your board is continuously developing.
Assuming that many readers are involved in charities, let us look at the resources available to support their board effectiveness.
The Charities Regulator (www.charitiesregulator.ie) is the national statutory regulatory authority for charitable organisations.
The authority maintains the public register of charitable organisations and ensures their compliance with the Charities Act.
The Charities Governance Code explains the minimum standards you should meet to effectively manage and control your charity.
The governance code provides a framework for putting in place systems and processes to ensure that your charity achieves its charitable objectives with integrity and is managed in an effective, efficient, accountable and transparent way.
The Charities Governance Code explains the minimum standards you should meet to effectively manage and control your charity
Charities that I worked with have found that after the initial shock of measuring how they work, against the code, that using the compliance record form ensures that the board is more disciplined and consistent in its approach and that the process helps keep board members focused.
This recording must be completed annually.
If you are unsure of how to adhere to, or to capture your board’s efforts, there are training supports available on the website.
Other readers will be part of boards that must comply with the state code of practice; code of practice for the governance of state bodies or if on a PLC; the UK Corporate Governance Code. Whichever is relevant to you, will be outlined in your board charter or induction pack.
Aside from what is legislated and regulated for, there are many other important steps and processes that support board effectiveness.
The challenge of writing articles recommending good governance is there are often conflicting priorities.
All boards have to manage the tensions that exist as the “urgent” and the strategic issues compete for attention and resources.
The following five steps, prompted by Finkelstein & Mooney, are a good guide to the five critical process goals for board effectiveness:
So far we have looked at board supports, structures and processes, now to the work of continuous development: I have captured four points from David Nadler’s book Building Better Boards that I think will resonate:
1 Get the right people: boards are only as good as the people who sit on them. As well as the right knowledge and skills, ensure that directors have enough time to serve.
We are all guilty of making poor decisions when rushed.
2 Put a meaningful structure in place: good communications at and between board meetings through sub-committees, and exchange of sub-committee minutes. Terms of office are key to ensuring that board members don’t get burnt out, or that board members don’t get too comfortable with each other, resulting in processes becoming more relaxed and thinking narrowed. Carry out an annual evaluation process for the board, board members and CEO against performance metrics.
3 Set the stage for effective board meetings: avoid over delegating to sub-committees or to the “golden circle” (often made up of the chair, CEO, finance lead and company secretary). In addition, clarify rules of behaviour as part of the code of conduct. Help new directors to assimilate. Ensure that the board pack is pertinent. Ensure that meetings are not over-scheduled.
4 Continuously strive to improve board processes: