Focus: Finance and Governance - Outlook - What happened to common sense?

Stephen Brooker is a consultant specialising in governance and financial strategy.

On reading the 2 November issue of Third Sector, I was struck by how often the subject of excessive bureaucracy came up in articles, features and editorials.

There is no doubt that the burden of reporting has increased significantly in the past ten years, and the item about Colchester Carers Centre had great personal resonance.

Perhaps the voluntary sector is partly to blame for allowing the situation to develop as it has. We all support greater professionalism and transparency, so we are prone to accede to requests for more information. In fact, it has become a matter of pride for most of us to have systems in place to provide adequate monitoring data that can satisfy anyone.

However, we run the danger of not speaking up for common sense and allowing ourselves to get sucked in to a nonsensical spiral of provision of more and more detailed data that does not, in fact, contribute to the overall assessment of outcomes.

My criticism (and it's a self-criticism as well as a warning shot at others) is that, whether as executives or trustees, we do not often enough challenge the comfortably conventional view as to what information is necessary to make proper judgements.

It is easy to challenge a conclusion and ask for more information. But it's much more difficult to sit back and take a broader view - to ask if what we are doing is really benefiting our clients or just a waste of resources, time and effort.

I admire the courage of Colchester Carers Centre in backing off from the over-onerous requirements of the Essex County Council Children's Fund, but could they not somehow have got to that point without wasting time on the original application? Were there not others at the fund who should have seen that what they were asking for was disproportionate and counter-productive?

The obligations imposed upon directors by the Company Law Reform Bill - to have regard for the longer-term interests of employees, suppliers, consumers and the environment - do nothing to comfort me in this regard.

They will make it even harder to apply a straightforward common sense test to ensure our efforts are best directed to achieving our charitable objectives.

The Bill seems another example of well-intentioned reform that may inadvertently lead charities into a needless minefield of governance provisions that are inappropriate.

For many, it may again raise the question of whether incorporation as a limited company is appropriate in the charity sector. If that leads to a greater interest in the alternatives, then perhaps some good may yet result.


- The burden of reporting has increased significantly in the past ten years

- This is partly because of the sector's willingness to accede to requests for data in the quest for greater transparency

- Charities must speak up for a more common sense approach to reporting.

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