The charity sector needs to improve governance measures if it is to avoid more of its charitable organisations falling into crisis, reports company secretarial services firm London Registrars (http://www.london-registrars.co.uk/). The membership body for charity chief executives, Acevo, warns that failure to develop better governance arrangements could cause the public to lose trust in the charity sector.
Acevo recently revealed that it was supporting 23 charity chief executives which were in crisis directly caused by poor governance, a massive jump from the usual one or two crisis cases being managed at any one time. Acevo Chief Executive Stephen Bubb, speaking to Third Sector, the publication for the not-for-profit sector, described the situation as “totally unprecedented” and “a worrying trend”. According to Bubb, the number of poor charity trustee boards currently far outweighs the number of excellent ones. He explains, “The last three calls have all been about a breakdown in the relationship between the board and the executive team.”
Bubb linked this charity governance issue with the recent scandals in corporate governance: “Bob Diamond, the former Chief Executive of Barclays bank, said that culture is what you do when no one’s looking. Chairs and Chief Executives have a duty to build a strong culture. There’s currently great trust in charities, but we can lose that in the same way as banks, doctors, journalists and politicians. We can’t afford too many scandals. It’s time we paid more attention to good governance.”
When it comes to finding solutions to this worsening problem, Bubb believes that the Charity Commission needs to provide the sector with more freedom to change current governance structures: “We need more freedom to pay trustees and to have unitary boards, made up of both executives and non-executives,” he said.
Company secretary services provider London Registrars advises on governance best practice in both the private and charitable sector. For further information on its services, visit the website at