John Williams: Why is obeying the law so fraught for charities?

Third Sector Promotion Association of Chairs

It's as much about culture as knowing the letter of the law, writes the vice chair of the Association of Chairs

John Williams
John Williams

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This ought to be simple: the law is the law; black and white; the "must" in Charity Commission guidance; the layers of law guiding every aspect of our work.

Yet, from Oxfam to the General Data Protection Regulation, we are taking a fresh look at our legal obligations and finding them a minefield.

If you listen to legal advice, it can have unforeseen consequences. Equally, you can have an entire statute or directive in front of you and still not know what to do.

So it’s timely that the Association of Chairs has produced a new briefing in its Chair’s Challenge Series: Avoiding Legal Pitfalls.

Because it’s not that easy. The legal juggernaut of GDPR is barrelling towards us, bringing threats of fines of up to £17m while those fines on some household names by the Information Commissioner’s Office are still fresh in our minds. Yet we are still juggling whether consent is always essential (a year ago most thought it was) with the scope to apply "legitimate interest". New guidance is still coming out with just two months to go.

On the other hand, you can take the best legal advice and still get into trouble. One of the most striking early statements by Oxfam about the lessons to be learned from its safeguarding crisis, carried this plaintive comment: as part of its response, Oxfam pledged to "work with the rest of our sector in an attempt to overcome the legal difficulties which have so far prevented us from sharing intelligence among NGOs and other organisations about people who have been found guilty of sexual misconduct".

Is this a case of doing the right thing legally, but, in the eyes of many, not doing the right thing ethically?

This seems to illustrate the dilemma of working with the law. It’s not about merely obeying, but understanding the law as an intellectual maze that needs some careful mapping to steer you through. You can be caught out in a multitude of areas, ranging from failing in your duties to employees or beneficiaries to operating outside the terms of your governing document.

How to avoid the many legal pitfalls

Which is exactly the aim of our briefing on Avoiding Legal Pitfalls. Every chair should be working to ensure that trustees take their legal responsibilities seriously and know what they’re responsible for, not least because of the potential consequences for the charity (and, indeed, for them).

The briefing sets out four key steps to compliance: understanding the charity’s legal responsibilities; having the right policies and procedures in place to comply, including thorough inductions for trustees and regular refreshers, and a system for effective whistleblowing; having the right assurance processes and reporting to the board to test that the systems are working; and ensuring you have a board that can assess the information they receive and asking the right, challenging questions.

Trying to address these questions makes yet another powerful argument for a diverse and well-connected board with enquiring minds that can share a wide experience of legal and be able to come to challenges from different angles.

Of course, the guide also addresses when and how to use specialist legal advice, but this only goes so far. The real challenge is to create a culture that takes the law seriously, follows the agreed processes and procedures with tenacity, faces up to problems and issues, and does not look for the easiest short-term fix.

We must learn from our mistakes; we must avoid sweeping troubles under the carpet; and we must anticipate the next crisis to bite us in the ankles. In particular, boards need to plan ahead. The briefing offers some basic questions to test your systems and resilience.

What are the worst things that can go wrong in the charity? Could they be prevented?

How would we know that they have happened?

Has the charity got the right skills, or access to them, to deal with the problem?

What would we do if such problems occurred?

Perhaps the mistake of addressing the last media firestorm -– over fundraising – was that our response was to try to fix fundraising when we should have been asking about safeguarding. If the development agencies had asked themselves these questions then, would they have been better prepared today? So now we are busy fixing safeguarding, which is right. But the next crisis will be about something else.

So those questions above apply to us all, whatever our sector, all of the time.

Happily, our guide is here – not with all the answers, but with some good questions to ask and guidance to follow. It’s a chair’s challenge, because, as ever, the buck stops with them. To stay within the shifting boundaries of the law, a quick read of Avoiding Legal Pitfalls might be the place to start.

John Williams is vice chair of the Association of Chairs. Download Avoiding Legal Pitfalls for free

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