Regulator warns charity leaders to guard against mismanagement

After discovering serious failings at the RNIB, the Charity Commission has written to leaders of hundreds of charities, reminding them to be aware of the grave consequences of governance failures

The Charity Commission has urged the leaders of hundreds of the UK’s largest charities to ensure their organisations are not responsible for management or governance failures that could further damage public trust in the sector. 

The regulator today concluded that serious mismanagement at the RNIB exposed vulnerable children in the sight-loss charity’s care to harm and undue risk. 

Helen Stephenson, chief executive of the regulator, said the case was “one of the worst examples we have uncovered of poor governance and oversight having a direct impact on vulnerable people”. 

In a letter to the leaders of 600 major charities in England and Wales, Stephenson today reminds the organisations to be aware of the risks that can result from governance or management failures. 

The letter says that in recent years there have been “grave governance failings” in some household-name charities, which have put people at risk of harm and exposed the charities in question to financial and reputational damage. 

“We cannot ignore the potential impact of these failings on public trust and on the support on which charity relies,” it says, 

“I am, therefore, writing to you as leader of a large charity involved in service delivery to consider the issues set out in the regulatory alert and to ensure you understand and implement adequate and clear lines of accountability in the governance of your charity.

“I know that this is a very difficult time, both for the country and for the sector, and I am mindful of the significant demands being placed on those running charities. 

“But irrespective of the current context, the matters raised through our inquiries are extremely important, and need to be raised with you now.”

The commission has issued an accompanying regulatory alert setting out recommendations from the commission about how charities can reduce the risk of falling foul of a major management or governance failure. 

It says the charity’s executives should feel confident that they can identify failures to protect people from harm, learn lessons from these incidents, and fully and frankly disclose them to trustees, regulators and/or agencies. 

It also says a charity’s executive should report regularly to its board on any significant incidents occurring within the charity's operations, consider how they provide assurance to the charity’s trustees on the safety of the organisation’s activities, and regularly review arrangements with third-party suppliers.

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