We have carried out numerous board evaluations of organisations in many different sectors, including, commercial organisations, hospitals, membership bodies, statutory organisations and regulatory bodies to name but a few.
One of the common threads across all sectors is the lack of investment in board development and senior leadership in the organisation. The same applies to charities.
Charities are by their nature frugal with expenditure that does not contribute directly to their mission and that is understandable.
However, investment in the development of a charity’s board and leadership should be viewed as a necessary investment rather than a cost and one which increases an organisation’s effectiveness by strengthening its skills, capacity and knowledge base.
The Australian Charities and Not-for Profits Commission (ACNC) supports charities’ efforts to invest the appropriate time and resources in the development of their boards and leaders. The ACNC also sets out to ‘support and sustain a robust, vibrant, independent and innovative not-for profit sector’.
The Italians say that a fish rots from the head, so if the investment is not made in the board, how can one expect the organisation not to be affected by a poor board and leadership
Undertaking meaningful investment in a charity’s board and leadership is a vital component of sound charity governance that helps to improve skills and foster trust and confidence in the sector.
There is drive towards creating the conditions to develop charities of scale, which should enable them to be more sustainable. To facilitate this, prudent investment by charity’s is required in the development of its board and leaders. In my view this is not an optional extra but should be an ongoing activity to increase the ability of the organisation to govern and lead.
This is a defendable cost, which many charity boards may be reluctant to commit to for perhaps fear over adverse public reaction that often accompanies these types of investments.
A charity that does not meaningfully invest in the development of its boards and leaders is unlikely to be particularly robust, sustainable or innovative. The foundation of public confidence in charities is based on evidence of sound values, a credible purpose, good internal processes and skilled staff and board members.
The governance training carried out by The Carmichael Centre, Charities Institute Ireland and The Wheel is commendable. But more investment is required by the sector to ensure all charities, their boards and leadership can avail of ongoing and meaningful development.
Lack of investment in boards and the leadership will eventually lead to dysfunctional organisations and possible extinction.
Charites need to be able to provide the evidence to the public at large, donors and funders that they are investing in governance and not merely engaging in a box ticking exercise.
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David W Duffy – is the author of “A Practical Guide for Company Directors” published by Chartered Accountants Ireland