This article is written for the boards of community or voluntary organisations that employ a senior member of staff to manage the organisation. The term CEO is being used here to describe that member of staff although they may have a different job title, for example, manager or co-ordinator. In the Governance Code for Community, Voluntary and Charitable organistions, such an organisation would be defined as Type C.
More and more boards want to improve the governance of their organisations. The Governance Code for Community, Voluntary and Charitable Organisations, for example, provides an excellent health check for the governance of any not for profit organisation. However, tackling governance can be a daunting task. In small organisations it is difficult to devote the time to developing the necessary policies and procedures. Or in an organisation dealing with internal conflict or a crisis of some sort it is hard to prioritise the development of good governance practice, even if better governance is the long-term solution.
The following suggestions may help such organisations to get started. They are based on the concept of our ‘vital signs’ – the indicators that tell a paramedic whether or not someone is in imminent danger. Ticking these boxes will not guarantee you good health, but will hopefully take you off the danger list and enable you to get moving in the right direction. My ‘vital signs’ for good governance would be:
- Clarifying roles
- Agreeing the plan
- Managing the CEO
- Setting the board agenda
- Reporting to the board
- Agreeing a code of conduct
1. Clarifying roles
Where there is lack of clarity about roles the organisation will be ineffective, work will be dupicated, time and possibly money will be wasted and it is likely that conflict will ensue. To avoid this it is necessary that:
- The role of the board itself and the roles of its officers and all individual members are understood and documented.
- The job description of the CEO is agreed by the board, reviewed annually and any necessary amendments are agreed with the CEO.
- The division of responsibilities between the Chair and the CEO are documented, including the level of authoritiy that is delegated to the CEO.
2. Agreeing the plan
If there is no mutually agreed plan for the organisation people are likely to have differing expectations, pull in different directions and get bogged down in conflict. To avoid this it is necessary that:
- The board and the CEO agree a plan for the organisation after appropriate consultation.
- The plan contains meaningful targets that progress can be reported against.
3. Managing the CEO
Where there is no system in place for the management of the CEO, tensions between the CEO and the board will build up over time. There may be issues of poor performance which damage the work or reputation of the organisation. It is not unusual for these tensions to be brushed under the carpet for some time, resulting in a crisis or conflict that may even lead to legal action. To avoid this it is necessary that:
- The board designates a board member (probably the chair) to act as line manager for the CEO.
- The regularity and format of line management meetings are mutually agreed between the CEO and line manager.
- Line management meetings take place regularly to discuss the work, provide support to the CEO and to agree ongoing priorities.
- Any individual board members who have issues with the CEO address these through the line manager.
4. Setting the board agenda
The board exercises its collective authority at board meetings. If board members do not receive a clear and informative agenda before the meeting they may struggle to make decisions and the meeting is likely to be ineffective. To avoid this it is necessary that:
- The chair and CEO agree the agenda for board meetings.
- The chair and CEO identify items requiring a board decision and clearly indicate this on the agenda.
- The agenda is sent out in advance of the meeting with any other papers that might need to be read before the meeting.
5. Reporting to the board
The report of the CEO to the board is an essential method of giving the board the information that they need to exercise proper oversight over the organisation. In many cases, however, this report goes into too much detail and focuses too much on what has already happened. The board can only too easily get drawn into operational matters and the more strategic decisions get lost in the detail. To avoid this it is necessary that:
- The CEO reports to the board against the targets set out in the plan.
- The board and the CEO agree the level of detail and method of reporting.
6. Agreeing a code of conduct
It is not unknown for conflict to arise at board level or for individual board members to act inappropriately. Board members may not realise that they have acted inappropriately or in some cases they may not care. Without some previously agreed boundaries and possible sanctions it is very difficult to deal with these problems successfully and the board may become completely dysfunctional. To avoid this it is necessary that:
- A code of conduct is agreed by the board.
- The code addresses issues such as board confidentiality and conflict of interests.
- The code identifies the sanctions that may apply if a board member is found to be in breach of the code of conduct, in line with the governing documents of the organisation.
Attending to these ‘vital signs’ will not necessarily guarantee the health of the organisation but ignoring them will almost certainly cause significant problems. More positively, putting these things in place will give your organisation a good start on the road to compliance with the Governance Code.