‘Half of the third sector’s income now comes from the state and it is imperative that the standards of governance in the third sector give confidence that taxpayers’ money is being spent properly. Whilst many third sector bodies have admirable arrangements on governance, many do not.
This is a key message from a report summarising the findings of a survey of Chief Executives of third sector organisations by the Association of Chief Executives of Voluntary Organisations. The report also draws on evidence from Chairs, leading figures in the public sector and experts on governance, and includes detailed case study material from countries around the world.
Responses indicated there was often a lack of top level strategic thinking by boards with deficiencies in defining outcomes and measuring performance. Only 40% of acevo members could agree with the phrase “My board is highly effective in developing and reviewing our strategy”.
Recent initiatives on best practice in governance indicate a step in the right direction. Given its short history, awareness of the code of good governance is very strong with 88% of acevo members’ Boards being aware of the Code. However, there is a significant gap between awareness of best practice and implementation of it, with only 44% of them who are putting it into practice.
The survey revealed that 76% of organisations have no mechanism in place for the appraisal of individual trustees or chairs and 65% have no mechanisms for appraising the performance of the board.
Charities, the report argues, should be free to pursue the governance structures that best suit the needs of their organisation. In some cases this may include payment of trustees for loss of earnings or beyond, or bringing the CEO on to the Board and considering unitary board structures.
The report is available from acevo. www.acevo.org.uk