What are the broader lessons of the collapse of Kids Company?
Thu 11 Feb 2016
A great deal has been said and written about the failure of Kids Company, including a very negative documentary on prime-time television. What can we learn about the failing of a vibrant and passionate organisation, working with young people in the most challenging and vulnerable circumstances?
The Charity Commission has opened a statutory inquiry into the charity’s affairs. The influential House of Commons Public Administration and Constitutional Affairs Committee (PACAC) has published a critical report of the charity’s failings, see the link below. The report is critical of trustees, auditors, inspectors, regulators and government. The heaviest criticism is of the performance of the trustees.
Not surprisingly, the PACAC report calls for greater regulation of charities, with increased powers and resources for the Charity Commission, as the regulator of the sector in England and Wales. The report also calls for statutory regulation of charities which have safeguarding responsibilities for children and vulnerable adults.
The report recognises that greater regulation is not the full answer and also calls for improved governance of charities.
But what does better governance look like?
A high-performing board must ask itself, and answer, some tough questions in order to lead and support a high-achieving, sustainable and accountable charity.
Thinking about the culture and values of the organisation is a good starting point. How do the trustees perform both individually and as a team and in their oversight of, and engagement with, the senior management team? Have the trustees relevant knowledge and experience of the activities undertaken by the charity and how do they know this? How do the trustees balance the values of the charity with the need to deliver financial value for the short and long term?
How do the trustees and senior management team set the charity’s vision and mission, in consultation with stakeholders? How is the strategy and business plan developed to deliver the mission? Is the business plan sustainable and how is it monitored? Is the charity innovative in delivering its work? How are risks identified, managed and reported, including reputational risk to the charity and to public trust and confidence in the charity sector generally? Does the organisation understand and communicate its outputs, outcomes and impact and its benefit for those it works with and for wider society?
For me, the key focus post the Kids Company collapse should be on better governance of charities, alongside greater regulation. To paraphrase Peter Drucker, governance eats regulation for breakfast.
The link to the PACAC report is: http://www.publications.parliament.uk/pa/cm201516/cmselect/cmpubadm/433/433.pdf
Any thoughts that we were moving away from a period of high risk and uncertainty in UK business vanished once it became clear that the snap election had delivered the UK a hung parliament. The existing uncertainty around Brexit and the economy in general has undoubtedly increased. Furthermore, the current causes of high risk and […]
Business is going through a period of huge change and uncertainty. As advances in technology remove barriers to entry on a previously unseen scale, business models are disrupted and ‘old’ sources of competitive advantage displaced, many feel that we are still in the fairly early stages of ‘The Fourth Industrial Revolution’. In addition, global warming […]
In April 2016, the Guardian Voluntary Sector Network published an article which argued that the chief executive of a charity, if not all the members of the senior management team, should also be members of the trustee board. I could not disagree more strongly.
Tax Governance is now becoming even more important with the increasing disclosure and transparency requirements. A recent workshop that looked at DAC6 and Corporate Criminal Offence (CCO) revealed some surprises for attendees and it’s important to keep be aware of these upcoming requirements. DAC6 – What is it? The new EU Mandatory reporting directive for cross-border […]
Whether a business achieves sustainable success for the benefit of its stakeholders and wider society is critically influenced both by the board’s decisions and, also very importantly, by how board members act in the boardroom. Boardroom behaviour has a crucial impact on corporate culture since how the executive and non-executive directors treat each other reverberates […]
Corporate culture has been high on the boardroom agenda in the UK in the past year at least partly due to the FRC’s well-received report on ‘Corporate Culture and the Role of Boards’. Healthy culture essential for sustainable success Providing a concise definition of corporate culture, however, seems elusive, not surprising given its all-pervasive nature. […]
A modern company needs a modern board—one that mirrors its workforce and customer base. Companies still fall short of this ideal but their stakeholders, including investors, will increasingly expect to see a shift. Progress towards greater gender diversity on boards is happening but change has been slow. My colleague, Marianne Sandén Ljungberg, is the CEO […]
Two cheers for the Government’s Green Paper on Corporate Governance Reform published last week. The first is for indicating that ‘we need to support strong businesses that focus on long-term value creation and command public confidence and respect’.The second is for focusing on strengthening the employee, customer and wider stakeholder voice in a relatively broad […]
During April, I was honoured to be invited by the Lithuanian Ministry of Justice to address an audience of Lithuanian private sector companies in relation to the new International Standard in Bribery Risk Management – ISO 37001. In the 26 years since independence the country has come a long way and is a full member […]
I’ve been asked several times recently what the forthcoming EU referendum means for charities and whether charities can campaign about the outcome? The second question is easier than the first, so I’ll deal with that one first.
A lot is being said and written about social investment. In March 2016, Rob Wilson, Minister for Civil Society rightly said ‘Social investment is growing. It will play an increasing role in how the sector will be funded and there is a role for all of us in achieving this. Social investment can accelerate the […]
In February, BBC Radio 4’s The Moral Maze covered charity in the UK. The panel members were Michael Portillo, Anne McEvoy, Giles Fraser and Matthew Taylor, chaired by Michael Buerk. Not surprisingly, the conversation covered charity and its relationship with government and whether charity should be able to use part of its funding from government […]
The Moral Maze programme on Radio 4 in February 2016 discussed charity in the UK. The panel members were Michael Portillo, Anne McEvoy, Giles Fraser and Matthew Taylor, chaired by Michael Buerk. Not surprisingly, the conversation covered charity and its relationship with government and whether, in turn, charity should be able to use part of […]
In the blog, “Culture is King”, I introduced the concept of an “Engaged Board” where a healthy board culture contributes to high level of both challenge and support in the boardroom. Achieving an appropriate blend of formal structures and processes that will contribute to a healthy board culture is perhaps the area most frequently discussed […]
The 2015 Corruption Perceptions Index (CPI) that ranks countries by the perceived level of public sector corruption, was published by Transparency International on 27 January 2016. The CPI has many detractors but is, nonetheless, read attentively by governments, companies and interested individuals around the world. One of the interesting facts about this year’s results is […]
When corporates fail, it’s not generally because they have no governance structure, procedures or internal controls. What’s often lacking is the right culture – a culture of challenge, accountability, independence and openness. Culture is King. It always has been but the recent global downturn and the string of high profile corporate blunders mean that organisational […]
This website uses cookies.
Some of these cookies are necessary, while others help us analyse our traffic, serve advertising and deliver customised experiences for you.
This website cannot function properly without these cookies.
Analytical cookies help us enhance our website by collecting information on its usage.
We use marketing cookies to increase the relevancy of our advertising campaigns.