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The rollercoaster debate of governance seemingly has no endpoint. The recent High Court case of the Kids Co cited the CEO as a de-facto director. Although dismissed, the case raised an interesting point about the ‘leadership and management’ wrapper around governance. This relationship has been highlighted during the pandemic with a new modus operandi and tempo for interaction between the board and senior leadership team.
What might this mean for the future?
The CEO and senior team manage the day-to-day business of the charity and have much to contribute to the charity’s success. Yet, the liability for the charity sits with the board of trustees. Is this structure the most effective model to deliver good governance? At present, there is seemingly little prospect for change to the model of a charity unitary board that is volunteer-led. While this is the case, how does the charity deal with the growing complexity of governance and demands for more openness and accountability?
In practice, the board looks to the CEO to advise on the implications of agendas such as financial and risk management, equality, diversity and Inclusion, safeguarding and GDPR. This means that effective governance needs the CEO and senior team to translate the board’s intent and lead the implementation.
Yet the challenge remains. How do you get to good governance? How do the board and senior team agree on what the ‘brilliant basics’ of governance are? What is ‘essential and what is ‘desirable’? Until this is understood and agreed it is like a boat without a rudder.
There is a tendency to think of governance as complex and strategic rather than what you put into everyday practice. Now the board and senior team can find common ground on the ‘brilliant basics’ of the charity’s governance. This is enabled by putting technology to work to simplify the complexity.
ACEVO can help with this through its partnership with Digi-Board. Digi-Board’s innovative approach uses advanced digital tools to dismiss the outdated view that a governance review is an administrative burden that is carried out every three or five years, if at all! Using digital tools eases the complexity and the challenges by enabling the board to know about the effectiveness of its governance at a given point in time.
Why is this important for the CEO?
If things go wrong it is likely the CEO and senior team will be the first to know. You are the eyes and ears of the board. The car spluttered but carried on – so does it need a service or is it a one-off problem? This is the crux of good governance. The CEO’s eyes and ears are invaluable in getting to the practices of good governance. The CEO’s role in governance while not formalised (as in the case of Kids Co) is absolutely vital.
Most charities have policies and procedures which often gather dust on shelves. What if the ‘brilliant basics’ of governance were always visible? For example, something out of the ordinary happened, and importantly, what is the impact on delivering services to those who rely on the charity?
So, what does that playbook look like? Simply put, every aspect of the charity’s governance is open to view and public scrutiny. We can’t Ignore what happened today as it has a potential impact on governance essentials.
Your view may be that governance is an administrative burden operating under light regulation with no obvious practical benefit. As a CEO you will know that your board has ultimate responsibility for governance. What is changing is that CEOs and their leadership teams play an important and active role in a charity’s effectiveness. The shared playbook is the glue where good governance comes together.
This relationship between the board, CEO and the senior team is crucial to achieving good governance. Ignoring the importance of this can often lead to tension at the top which saps the collective team’s energy and may even mean that focus is diverted. Like any relationship, it needs to be constantly nurtured to keep it strong.