At the centre of every charity scandal is a trustee board that has somehow failed in its duty. And with every failing board, the signs are often evident years before the crisis comes to bear. But what are the signs of a failing board and how do you tackle them before the very future of the charity is jeopardised?
Ros Oakley, executive director of the Association of Chairs, says the level of challenge from trustees is an issue for many struggling boards.
"There can be too much or too little," she says. A sometimes "dysfunctional politeness" exists, says Oakley, so trustees fail to properly scrutinise decisions or to express opposition to others’ opinions.
Equally, a board can be too fractious and allow interpersonal conflict to overshadow genuine debate about ideas and direction.
There is also the issue of which subjects are raised at board meetings and whether the focus is on past mistakes, not future opportunities.
"A board that is going wrong often gets very insular, looking backwards about what has happened and sometimes with too much recrimination," says Oakley. "You need to do a certain amount of looking back to learn and to assess performance, but a healthy board is spending quite a lot of time looking forwards and outwards."
Dysfunctional board types
Louise Thomson, head of policy for not-for-profit at the governance institute the ICSA, says that there are a number of types of dysfunctional board, including the "rubber-stampers" that simply allow executive decisions to pass through unchallenged.
Another type are the "fire-fighters" who lurch from crisis to crisis, which ultimately prevents effective long-term planning and can lead to bigger problems in future, Thomson says. Others focus too much on minutiae, rather than on strategy and planning, while others can go too far in the opposite direction and not focus enough on compliance and regulation.
Thomson says there has to be balance between these two disciplines for a board to be effective.
"Sometimes trustees want the exciting stuff to look at – they want to see the strategy, they want to look at shaping the future of the charity," she says. "So you need to have the right blend of exciting stuff for the trustees as well as the compliance and regulatory parts and historical data."
The problems can sometimes be isolated to individual trustees, which means a private meeting with the chair might be necessary to discuss any issues with the board member’s performance.
This can include factors such as board members who fail to read board papers, who don’t carry out their legal duty to scrutinise policy effectively and those who want to focus only on a particular specialism of theirs and not on other important parts of the board’s work.
The charity governance code is an important reference point for boards, highlighting some of the more worrying aspects of boards’ behaviour that can lead to problems. Rosie Chapman, author of the code, says that good boards typically have "emotional maturity" and are focused on the health of the charity, as well as taking the time to review its performance.
But how can charities address problems in the board? Oakley says a lot of issues can come down to personalities, and having greater diversity and turnover of trustees can prevent a board from becoming stale or ineffective. Inductions for trustees, as well as regular reminders of their responsibilities, can ensure that they focus on the charity’s priorities and the contribution trustees make to them.
"You can have a board full of individual stars, but it is looking for the constellations between them that is really critical," Oakley says.
Chapman says that term limits – which the code says should be nine years for trustees – are a good way of keeping a board fresh and preventing staleness and complacency from creeping in.
"I’ve seen boards that silt up, where you get either a chair or trustees who just won’t leave – they stay in the role for too long," she says. "This means the people on the fringes get less and less engaged, particularly if the chair has been around for a long time. You end up with this tiny pool of people who won’t shift, don’t get new ideas and then wonder why they can’t attract new people to the board."
Thomson says that interviews with trustees as they apply to join the board are a good way to gauge whether they are the right fit for the organisation. But perhaps the best way of ensuring that a board is effective is the easiest to implement: socialising together.
Thomson says that simply having a meal together before a trustee meeting or taking opportunities to get to know people outside the boardroom can be key to a functional and effective board.
She adds that chairs should ultimately take the lead in ensuring that trustees meet the standards required, even if that means asking them to depart.
"Governance isn’t just about the policies and procedures – it is the people as well," she says. "We have to grasp that nettle sometimes. It’s not pleasant, but if it is harming the charity then someone has probably got to have that conversation."